Happy Friday! Brian Manning here with the weekly update. Let's get right to it. So, Monday this week was a relatively quiet news day. Not a lot to talk about there. Although we did continue to dissect the jobs report, the BLS report that we got last week on Friday, which we thought was... Something smells a little fishy there. So, if we look at that, it's interesting. You know, if you look at the prior jobs... or if you look at that jobs report for the prior every month's employment or losses, there was actually 2.5 million jobs lost across the United States. Of that, 417,000 alone were in the service sector. But they added in this seasonal adjustment and that's how they came up with their number of over half million jobs created.

What's interesting is, you know, we talked about this population control last week and that was one of the factors in the job support as well. And the BLS came out and gave little bit more clarity on that. And they said, well, we look at the population control and if we have immigrants moving into the United States, we count them as an assumption that they all have a full-time job as well. So... It's still interesting to go from 2.5 million job losses to 500,000 plus jobs gained, but there we are to this.

We've got a relatively quiet news day. We had a Fed meeting that was going through and everyone was really waiting for the Fed meeting and Jerome Powell's speech to take place on Wednesday. So, Wednesday, before we get to Jerome Powell, we had CoreLogic. So, CoreLogic gives us data on home appreciation. For the year of 2022, across the country, home appreciation was up 6.99%. We totally understand that there's a little bit of a deceleration appreciation, but what's interesting to look at is that we've had 121 months of straight appreciation across the United States. So, down from our peak. Yes, we're down 3% from the peak. This is hardly a housing crash.

CoreLogic also says that their anticipation and value for the year of 2023 is that home values will go up 3%. Again, definitely not a housing crash. Certainly, seeing some calming. That's no problem at all. It doesn't bother us, but very different than how the media would portray it. So, you have to be very careful there.

Then, at the end of Wednesday, we had Jerome Powell's speech kind of getting dissected. The big takeaways from Jerome Powell are two. One was that he said they're finally starting to see deflationary pressure, so they're seeing costs come down, which is really good, and they're starting to see deflationary pressure in the shelter side. So, they're looking at rents, they're looking at cost of housing. And that's all very impactful because... for the CPI report, shelter makes up 39% of the reading. So, it's good to see that they're finally acknowledging that. I don't think we're going to see really meaningful progress on inflation until May, June, July, August, September. But we are seeing it start to happen, which is great to see.

Thursday this week, we have the economic conference board. There's a survey of 142 CEOs across the country. 93% of them said they're bracing for a recession. There's something I want to show you here. Just let me do a screen share here really quick. There's always a lot of fear on recessions. I just want to show something here really quick. So... If you look at unemployment and recessions, what's interesting is a lot of people think, oh, well, you know, when we're at peak low unemployment, we could never go into recession. It's actually quite opposite to that. Recessions start when you go from peak low unemployment... So, I guess that'd be the valley of low unemployment, and you start to see an uptick in employment. It doesn't happen when you're at the lowest levels of unemployment ever, or when you're working way into that, and actually when you're at the top of the highest amount of unemployment, and then you start to see economic gains. That's when you're out of a recession and you're starting to see economic expansion.

So, we go back into the fifties and we look at this every single time you see a low of unemployment. So, the bottom, this chart here tracks unemployment. Every time you see a low, then you hit a recession. And then at that point in time, you see a peak in unemployment and it comes down. Again, low of unemployment, recession. It peaks. Every single time from the 40s through now, we always see a recession start when we're at our lowest numbers of unemployment ever. It started going into Covid, and then Covid changed everything. But here we are right now, probably what we would say would be the lowest unemployment numbers possible.

And as that starts to change and you start to hear media of companies laying off employees, that's really when you start to see the recession become impactful. The reason why we're not worried about as much in housing is because every single time, if you go back to the 70s, whenever you go into recession, it's always friendly for mortgage rates.

Right, so, you look in the 80s, we went into a recession, mortgage rates plummeted. Mid-80s again went into recession, mortgage rates plummeted. 90s, mortgage rates came down. Two thousands, mortgage rates came down. So, it's very predictable. Over and over and over, when the US economy goes into recession, inflation comes down, and mortgage rates come down as well. So, looking at this, if you're a home buyer or thinking about buying a home, you just have to know, as inflation cools, as the economy slowly enters into recession, whatever level might be at, mortgage rates will continue to come down, and housing always does really well in this.

Friday, today, this week, we got some information from the Japanese Central bank. So, their version of the Federal Reserve, they call it a Fed president there, just like we have Jerome Powell here is changing over. And there were really two options. There is Amaya and Ueda. So, Amaya was probably the one that most people were hoping for and really more dovish in their tone and their thoughts on hiking rates. And then you have Ueda, who's going to be more hawkish.

So, you're seeing some impact in the bond markets right now. You're seeing some impact in mortgage rates because... bonds are really globally connected around the world. And when you have, you know, more hawkish, we'll call it Fed presidents around the world, it makes economies nervous. So, I think this will wear off. This is kind of a reaction that we're seeing right now. Over time, you're going to see this wear off little bit, but it is having a slight impact on bond markets and mortgage rates today. I'm around all weekend. If you have any questions, let me know. If you want to go through our strategic buyer consultation, give me a call. If you want to go through our precommitment process, set yourself up to close in ten days. We'd love to help you. Happy Friday. Have a great day.

-Brian

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