Robert Brusca

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Contraction is not what China has been seeking 
China's manufacturing gauge last showed a contraction 2.5 years ago. And apart from one observation in February 2016, the headline PMI was last lower than its current reading in August 2012, about 6.5 years ago.

Changing momentum also tells a story 
The momentum changes confirm that there has been an extended slowdown for manufacturing in China that has culminated in the overall contraction. Orders and output are slowing while inventories are piling up. The headline PMI in manufacturing has showed declining momentum over 12 months and from 12-months to six-months as well as from six-months to three-months. This sort of progressive deterioration is present in all but two of the PMI components. The exceptions are delivery lags and inventories. Meanwhile, the build-up in inventories is not a good sign but tends to reinforce that a slowdown is in effect as 'stuff' is being made that is not being sold or exported.

China's manufacturing is impacted 
Since 2005, China's manufacturing PMI has been this weak or weaker only about 7% of the time. Orders have been this weak or weaker about 8.3% of the time. Output has been this weak or weaker about 5.1% of the time. Is there a pattern here? Delivery speeds are a contrary signal and they are approximately normal at a 58th percentile standing in their queue of historic data. Inventories have been higher only about 23% of the time so stock levels have been built up and appear to be really built up and out of line compared to output and order trends.

Trump tactics have impact in China 
U.S. trade countermeasures against China are having an impact. But China in a new communication has said that it is ready to work with the U.S., a statement that suggests progress is being made. Earlier President Trump had tweeted that 'Big Progress' was being made in the U.S.-China trade talks after he and the Chinese Premier Xi Jinping had spoken on the phone.

U.S.-China Trade...Deal? 
The U.S.-China trade conflict has been front and center in everyone's mind for some time now. The U.S. and China had agreed at the G-20 summit in December in Buenos Aires to put any trade actions on hold for 90 days while they worked to formulate a solution. As 2018 draws to a close, we have some hopeful noises being made by both sides about the progress in these talks. And that is certainly good news.

Happy New Year! But remember that reality bites 
However, as we cheer prospects for a trade deal with China, we must be mindful that any deal we get must be good for us and must preserve the rights of U.S. firms to trade freely and to not have their corporate secrets and technology subject to theft of confiscation by China or its minions. We need a deal that is enforceable and verifiable. We need to remember just who we are dealing with. As China makes nice overtures to the U.S., it is also busy persecuting Canadians in China because Canada is holding a high level Chinese citizen whose company broke U.S. law and who is being sought under a Canada-U.S. extradition treaty. China has managed to arrest two Canadians and apparently is pressing ahead with drug changes against one of the seized persons to put pressure on Canada to not honor its extradition treaty with the U.S. What you deal with China this is what you deal with. So let's keep that in mind.

By the Sea, by the Sea, by the South China Sea... 
China did also grab the South China Sea and flouted a world court ruling that their seizure had no standing in international law. China is now tied up in a new fight with Vietnam over China's claiming of the South China Sea. In dealing with China, we are dealing with a country that persistently flouts international law and bends or sets rules in its own favor. Not only am I wary of cutting any deal with China, I am very suspicious about what it will want in return for what it will claim to give us. And yet I worry about how China's behavior will change in the future. It is easy to agree with someone and to compromise if you never intend to uphold your end of the bargain. And right now the U.S. has China in a place that is hurting it as we can see from its manufacturing PMI. The U.S. needs to press this advantage. China needs trade. It needs to expand and needs more trade expansion than the U.S. can give it or afford. China needs to grow and to spread development. But the world isn't big enough or affluent enough to absorb the goods China would need to make and export to create that development. A real Free Trade deal with China should not make the U.S. market more penetrable by China. But that seems to be what China thinks that it will get. So for me, the hint of progress from trade talks with China is the sound of one-hand clapping.

Happy New Year...I Hope. 


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Contraction is not what China has been seeking China's manufacturing gauge last showed a contraction 2.5 years ago. And apart from one observation in February 2016, the headline PMI was last lower than its current reading in August [...]

China Manufacturing Gauge Reads 'Contraction' for First Time in 2.5 Years

Carol Stone, CBE

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The National Association of Realtors (NAR) reported that pending home sales fell 0.7% in November the second consecutive decline and the seventh in the eleven months so far this year. These sales are thus off 7.7% y/y, and at 101.4 in November (2001=100), the index is 10.3% below the peak in April 2016. It is also the lowest since 101.3 in June 2014.

The November decline in pending home sales nationwide included a mix by region. Sales in the West recovered 2.8% after their October drop of 8.9% and were off 12.2% from a year ago. Those in the Northeast grew 2.7% in November after a slim 0.3% rise in October; they were down 3.5% from November 2017. The South and the Midwest both had month-on-month declines in November, the South by 2.7% (-7.4% y/y) and the Midwest, 2.3% (-7.0% y/y)

The pending home sales index measures sales at the time the
contract for an existing home is signed, analogous to the Census Bureau's new
home sales data. In contrast, the National Association of Realtors' existing
home sales data are recorded when the sale is closed. In developing the pending
home sales index, the NAR found that the level of monthly sales contract activity
parallels the level of closed existing home sales in the following two months.
The series dates back to 2001, and the data are available in Haver's PREALTOR database.

<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >Pending Home Sales (SA,
 2001=100)</th>
 <th scope="col" >Nov</th>
 <th scope="col" >Oct</th>
 <th scope="col" >Sep</th>
 <th scope="col" >Nov Y/Y %</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 <th scope="col" >2015</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Total</td>
 <td >101.4</td>
 <td >102.1</td>
 <td >104.8</td>
 <td >-7.7</td>
 <td >109.0</td>
 <td >109.8</td>
 <td >108.8</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Northeast</td>
 <td >95.1</td>
 <td >92.6</td>
 <td >92.3</td>
 <td >-3.5</td>
 <td >97.2</td>
 <td >96.4</td>
 <td >90.8</td>
 </tr>
 <tr>
 <td class="firstcol" >Midwest</td>
 <td >98.1</td>
 <td >100.4</td>
 <td >102.2</td>
 <td >-7.0</td>
 <td >104.8</td>
 <td >107.4</td>
 <td >107.1</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >South</td>
 <td >115.7</td>
 <td >118.9</td>
 <td >120.2</td>
 <td >-7.4</td>
 <td >123.8</td>
 <td >122.9</td>
 <td >123.1</td>
 </tr>
 <tr>
 <td class="firstcol" >West</td>
 <td >87.2</td>
 <td >84.8</td>
 <td >93.1</td>
 <td >-12.2</td>
 <td >99.6</td>
 <td >102.4</td>
 <td >102.2</td>
 </tr>
 </tbody>
 </table>
 
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The National Association of Realtors (NAR) reported that pending home sales fell 0.7% in November the second consecutive decline and the seventh in the eleven months so far this year. These sales are thus off 7.7% y/y, and at 101.4 in [...]

U.S. Pending Home Sales Decline Again, Reaching Lowest since Mid-2014

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	 But Rest Assured: There Is More Hullabaloo to Come...Just Not over Inflation
 
 
 
 

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Germany's HICP fell by 0.3% in December. In Spain, the HICP fell by 0.5%. German ex-energy inflation rose by only 0.1% in December after a 0.1% decline in November.

Where's the beef? 
The ECB has been under a steady drumbeat of pressure to dismantle its stimulative programs and has been criticized for letting inflation rise too much. Now in Germany, the strongest economy in the EMU with the most overheated labor market, the price level is falling in December and the year-on-year rate of inflation has dropped back to a very comfortable very stable under target 1.7% - a pace that even the Bundesbank could love. The pace in traditionally more inflation-prone Spain is only 1.1% over 12 months. And German inflation excluding energy is a paltry 1.4%.

Inflation is ending 2018 much better behaved than almost anyone expected. Fancy that!

Much of this owes to OPEC and its ongoing disorientation along with a special mention, of course, to fracking in the U.S. to say nothing of Iran continuing to be able to export oil even with U.S. sanctions (and some exemptions) in place. The oil market is a wily creature. For now the fickle finger of fate points lower for oil, but one can never be sure of when that finger will invert, develop a crook and beckon prices higher. Still, it does seem that the oil market and concerns about global growth are going to keep petrol prices pouting for some time.

Compared to December of one year ago German inflation is 'up to' a 1.7% pace compared to 1.6%. The German ex-energy pace is down to 1.4% from 1.7% a year ago. Inflation in Spain is lower at 1.1% compared to a 1.2% over 12 months ended in December 2017. Deck the halls with inflation-fear folly!

If we assess inflation trends over the intra-year period from 12-months to six-months to three-months, we find the annualized rate of inflation is progressively falling for all the measures in the table. On Dasher on Dancer, on Donder and Draghi, inflation is lower and sill looking soggy!


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Financial markets and prospects 
Financial markets are in a tizzy. The U.S. stock market had a horrific sell off then the DJIA jumped out of the blue by over 1,000 points in a day, a gain of over 5% (remember when a 500-point drop was a 20% decline?). Trump minions are now saying that Powell is safe based on viewing the video-tape replay after Trump had called him 'out' at the plate initially. It's hard to know if we should be reassured by any of this, given the mercurial nature of the CEO in Chief and his penchant for holding a grudge. Maybe he will find a new angle on the video-tape replay at some point in the future and revert to his original call? Maybe Powell really is safe until Trump calls him a 'Democrat?' That was the signal that ended it all for Mattis, anyway.

Clearly, U.S. policy is based on some factors that are hard to pin down and harder still to depend on. Market valuations depend on Fed policy and on the Fed being independent. But the President was hired (Oops, I mean elected) to be a disruptor and in his world that does not mean that disruption faces any boundaries. Except when it does and even then a few histrionics can be used to great effect.

As the year draws to a close, the Fed has managed to raise Fed funds steadily even though that was never its stated policy (nothing up my sleeve!). I wonder why the Fed felt it could not tell us that that was its true agenda.

The U.K. is still mucking around with Brexit scenarios. Italy has been given a new longer leash on life by the EU Commission that has accepted an only slightly pared budget position and a promise of a smaller deficit next year. China seems to be offering all sorts of changes to try and settle the U.S. trade dispute but not really getting to the nub of what the U.S. wants.

What do we want? FAIR TRADE! When do we want it? NOW!

Good luck with that. Instead, China has offered to drop tariffs to zero on all sorts of things that the U.S. could never export to it on its best of days.

While Trump remains a highly controversial and much criticized figure, it is interesting to note how his trade attacks have paved the way for many more criticisms from mainstreamers about China and about China's unfair trade practices. There is no more saying, 'Well, it's close enough to Free trade for me...' And no more 'Well, they get IOUS and we get goods!' Thank God Trump's shaking things up has brought some to their senses.

Here is hope that in 2019 Mr. Trump knows when to stop shaking and when to start compromising and deal-making. Here is hoping he does not have a fit of jealousy over the 'Wall' that Mr. Putin just successfully completed around Crimea.

There is still a U.S.-EU trade deal to be struck. And there are plenty of places for things to go wrong…or to surprise the critics and to go 'right.' Markets are in disarray wondering what will happen, worried one day and ebullient the next. Unfortunately market schizophrenia is unbecoming. Investors like their markets better behaved. Will that happen in 2019?

From this vantage point, it is hard to tell. But at least the inflation scare is off. And in the U.S., the central bank can at least be happy that it has been able to get Fed funds above 2% without creating a recession (so far…). And the dogs have called Trump off the Fed (or vice versa). The ECB has stoppered its stimulus program. The BOJ is still running its stimulus flat out. And the BOE is waiting on a Brexit clarification. But China is on a hot seat and conditions there are deteriorating.

Note that since the U.S. demand for Canada to extradite a Huawei officer, that request has stirred up all sorts of animosities in China that has begun to incarcerate and charge Canadians in China in ways that make no sense. As 2018 draws to a close, China has revealed its true self to the world. Its belt and Road program is a bait and switch program of influence, entrapment and planned domination. Even economists that did not used to say bad things about China are having second thoughts. You know…it's way overdue. It's time for Baby Huey to change its own diaper.
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Germany's HICP fell by 0.3% in December. In Spain, the HICP fell by 0.5%. German ex-energy inflation rose by only 0.1% in December after a 0.1% decline in November. Where's the beef? The ECB has been under a steady drumbeat of [...]

German Inflation Calms After a Year of Hullabaloo

Peter D'Antonio

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The Chicago Purchasing Managers Business Barometer remained at an elevated level of 65.4 in December after surging to 66.4 in November. Chicago Business Survey readings in the mid-60s are unusual and reflect a strong business climate. The Action Economics Forecast Survey expected a reading of 62.2. The Chicago Purchasing Managers figures are diffusion indexes where readings above 50 indicate growth.

Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with similar methodology as the ISM Composite Index. This index slipped to 61.3, but remained at a healthy level. The Chicago index has a 75% correlation with the national ISM Manufacturing Index, which is scheduled for release Thursday, January 3.

A surge in the production component of the Chicago index offset lost ground (from high levels) in delivery times. Last month, the supplier deliveries index had surged, suggesting the slowest delivery times in over a decade. Today's reading erased that positive signal. In addition, the order backlog and inventory readings rose, while new orders declined.

The employment index declined in December to 52.1. While the employment diffusion index can be volatile and often bears no correlation with the employment report, the details of the report were worrisome. The proportion of survey respondents that indicated employment was higher in the month fell by 15 percentage points to 13 percent. That was the lowest figure in two years and the largest month-to-month decline since 2014.

The index of prices paid weakened for the fifth consecutive month. The NSA reading of 63.5 was the lowest since August 2017 and down from July's 81.0. A greatly reduced 33% of respondents reported higher prices, while a slightly increased 6% reported lower prices. The percentage figures are NSA.

The MNI Chicago Report is produced by MNI in partnership with ISM-Chicago.
The survey covers a sample of over 200 purchasing professionals in the Chicago area with a monthly
response rate of about 50%. Summary data are contained in Haver's USECON database, with
detail including the ISM-style index in the SURVEYS database. The Action Economics Forecast Survey
is available in AS1REPNA.

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<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" >Chicago Purchasing Managers Index (%,
 SA)</th>
 <th scope="col" >Dec</th>
 <th scope="col" >Nov</th>
 <th scope="col" >Oct</th>
 <th scope="col" >Dec '17</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 <th scope="col" >2015</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >General Business Barometer</td>
 <td >65.4</td>
 <td >66.4</td>
 <td >58.4</td>
 <td >67.8</td>
 <td >60.8</td>
 <td >53.1</td>
 <td >50.3</td>
 </tr>
 <tr>
 <td class="firstcol" >ISM-Adjusted General Business Barometer</td>
 <td >61.3</td>
 <td >63.1</td>
 <td >59.7</td>
 <td >65.6</td>
 <td >59.0</td>
 <td >52.0</td>
 <td >51.6</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp;Production</td>
 <td >71.0</td>
 <td >65.2</td>
 <td >59.8</td>
 <td >76.9</td>
 <td >64.3</td>
 <td >54.7</td>
 <td >52.5</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp;New Orders</td>
 <td >67.9</td>
 <td >72.5</td>
 <td >57.9</td>
 <td >72.2</td>
 <td >63.5</td>
 <td >55.7</td>
 <td >50.4</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp;Order Backlogs</td>
 <td >64.6</td>
 <td >62.9</td>
 <td >51.2</td>
 <td >59.6</td>
 <td >55.2</td>
 <td >47.2</td>
 <td >44.4</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp;Inventories</td>
 <td >55.4</td>
 <td >53.7</td>
 <td >60.2</td>
 <td >63.9</td>
 <td >54.9</td>
 <td >47.2</td>
 <td >52.1</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp;Employment</td>
 <td >52.1</td>
 <td >55.4</td>
 <td >52.5</td>
 <td >55.3</td>
 <td >52.9</td>
 <td >49.4</td>
 <td >50.3</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp;Supplier Deliveries</td>
 <td >59.9</td>
 <td >68.7</td>
 <td >68.3</td>
 <td >59.6</td>
 <td >59.4</td>
 <td >52.8</td>
 <td >52.6</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp;Prices Paid</td>
 <td >65.6</td>
 <td >73.2</td>
 <td >75.1</td>
 <td >67.2</td>
 <td >64.0</td>
 <td >53.2</td>
 <td >46.8</td>
 </tr>
 </tbody>
 </table>
 
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The Chicago Purchasing Managers Business Barometer remained at an elevated level of 65.4 in December after surging to 66.4 in November. Chicago Business Survey readings in the mid-60s are unusual and reflect a strong business climate. [...]

U.S. Chicago Business Barometer Remains Robust

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The National Association of Realtors (NAR) reported that pending home sales fell 0.7% in November, the second consecutive decline and the seventh in the eleven months so far this year. These sales are thus off 7.7% y/y, and at 101.4 in November (2001=100), the index is 10.3% below the peak in April 2016. It is also the lowest since 101.3 in June 2014.

The November decline in pending home sales nationwide included a mix by region. Sales in the West recovered 2.8% after their October drop of 8.9% and were off 12.2% from a year ago. Those in the Northeast grew 2.7% in November after a slim 0.3% rise in October; they were down 3.5% from November 2017. The South and the Midwest both had month-on-month declines in November, the South by 2.7% (-7.4% y/y) and the Midwest, 2.3% (-7.0% y/y)

The pending home sales index measures sales at the time the
contract for an existing home is signed, analogous to the Census Bureau's new
home sales data. In contrast, the National Association of Realtors' existing
home sales data are recorded when the sale is closed. In developing the pending
home sales index, the NAR found that the level of monthly sales contract activity
parallels the level of closed existing home sales in the following two months.
The series dates back to 2001, and the data are available in Haver's PREALTOR database.

<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >Pending Home Sales (SA,
 2001=100)</th>
 <th scope="col" >Nov</th>
 <th scope="col" >Oct</th>
 <th scope="col" >Sep</th>
 <th scope="col" >Nov Y/Y %</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 <th scope="col" >2015</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Total</td>
 <td >101.4</td>
 <td >102.1</td>
 <td >104.8</td>
 <td >-7.7</td>
 <td >109.0</td>
 <td >109.8</td>
 <td >108.8</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Northeast</td>
 <td >95.1</td>
 <td >92.6</td>
 <td >92.3</td>
 <td >-3.5</td>
 <td >97.2</td>
 <td >96.4</td>
 <td >90.8</td>
 </tr>
 <tr>
 <td class="firstcol" >Midwest</td>
 <td >98.1</td>
 <td >100.4</td>
 <td >102.2</td>
 <td >-7.0</td>
 <td >104.8</td>
 <td >107.4</td>
 <td >107.1</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >South</td>
 <td >115.7</td>
 <td >118.9</td>
 <td >120.2</td>
 <td >-7.4</td>
 <td >123.8</td>
 <td >122.9</td>
 <td >123.1</td>
 </tr>
 <tr>
 <td class="firstcol" >West</td>
 <td >87.2</td>
 <td >84.8</td>
 <td >93.1</td>
 <td >-12.2</td>
 <td >99.6</td>
 <td >102.4</td>
 <td >102.2</td>
 </tr>
 </tbody>
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The National Association of Realtors (NAR) reported that pending home sales fell 0.7% in November, the second consecutive decline and the seventh in the eleven months so far this year. These sales are thus off 7.7% y/y, and at 101.4 [...]

Sandy Batten

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New single-family home sales fell 8.9% (-12.0% y/y) in October to 544,000 (SAAR).



The data in this report are available in Haver's USECON database.
The consensus expectation figure from Action Economics is available in the AS1REPNA database.

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	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >U.S. New Single-Family
 Home Sales (SAAR, 000s)</th>
 <th scope="col" >Nov</th>
 <th scope="col" >Oct</th>
 <th scope="col" >Sep</th>
 <th scope="col" >Nov Y/Y %</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 <th scope="col" >2015</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Total</td>
 <td >???</td>
 <td >544</td>
 <td >597</td>
 <td >-12.0</td>
 <td >616</td>
 <td >560</td>
 <td >502</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Northeast</td>
 <td >???</td>
 <td >22</td>
 <td >27</td>
 <td >-46.3</td>
 <td >40</td>
 <td >32</td>
 <td >25</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Midwest</td>
 <td >???</td>
 <td >60</td>
 <td >77</td>
 <td >-16.7</td>
 <td >72</td>
 <td >69</td>
 <td >61</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; South</td>
 <td >???</td>
 <td >313</td>
 <td >339</td>
 <td >-11.6</td>
 <td >341</td>
 <td >317</td>
 <td >286</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; West&nbsp;</td>
 <td >???</td>
 <td >149</td>
 <td >154</td>
 <td >-1.3</td>
 <td >164</td>
 <td >142</td>
 <td >130</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Median Price (NSA, $) </td>
 <td >???</td>
 <td >309,700</td>
 <td >321,300</td>
 <td >-3.1</td>
 <td >321,633</td>
 <td >306,500</td>
 <td >293,733</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

New single-family home sales fell 8.9% (-12.0% y/y) in October to 544,000 (SAAR). The data in this report are available in Haver's USECON database. The consensus expectation figure from Action Economics is available in the AS1REPNA [...]

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The Federal Housing Finance Agency (FHFA) Price Index for house purchases rose 0.3% (5.7% y/y) during October following a 0.2% September rise. Home price appreciation has eased noticeably this year. Over the past six months, the index increased at a 4.4% annual rate, down from a 6.9% annual rate of increase six months earlier.

Most regions experienced a step-down in price gains this year, but the most pronounced decelerations were in the Middle Atlantic, South Atlantic and West South Central regions. In fact, in October, prices actually fell 0.2% in the Middle Atlantic region (+6.0% y/y) and 0.6% the South Atlantic region (-0.6%, +5.8% y/y), while prices were nearly stagnant in the West South Central region (+3.9% y/y).

Prices in the Pacific region rebounded 1.4% in October (+6.7% y/y) after a surprising 0.8% decline in September, while the Mountain region added to previous strong gains (8.5% y/y). The East North Central region posted a firm 0.7% increase (6.6% y/y), and West North Central home prices bounced back 1.1% (6.2% y/y). East South Central prices increased 0.6% (4.3% y/y). In New England, home prices gained 0.3% (4.6% y/y).

The FHFA house price index is a weighted purchase-only index that measures
average price changes in repeat sales of the same property. An associated quarterly index includes
refinancings on the same kinds of properties. The indexes are based on transactions involving
conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac.
Only mortgage transactions on single-family properties are included. The FHFA data are available
in Haver's USECON database.

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<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" >FHFA U.S. House Price Index, 
 Purchase Only (SA %)</th>
 <th scope="col" >Oct</th>
 <th scope="col" >Sep</th>
 <th scope="col" >Aug</th>
 <th scope="col" >Oct Y/Y</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 <th scope="col" >2015</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Total</td>
 <td >0.3</td>
 <td >0.2</td>
 <td >0.4</td>
 <td >5.7</td>
 <td >6.7</td>
 <td >6.0</td>
 <td >5.4</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; New England</td>
 <td >0.3</td>
 <td >0.5</td>
 <td >0.6</td>
 <td >4.6</td>
 <td >5.8</td>
 <td >4.1</td>
 <td >3.3</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Middle Atlantic</td>
 <td >-0.2</td>
 <td >0.3</td>
 <td >-0.4</td>
 <td >3.3</td>
 <td >4.9</td>
 <td >3.7</td>
 <td >2.5</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; East North Central</td>
 <td >0.7</td>
 <td >0.7</td>
 <td >0.4</td>
 <td >6.6</td>
 <td >6.1</td>
 <td >5.3</td>
 <td >4.3</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; West North Central</td>
 <td >1.1</td>
 <td >-0.2</td>
 <td >0.3</td>
 <td >6.2</td>
 <td >5.4</td>
 <td >5.6</td>
 <td >4.0</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; South Atlantic</td>
 <td >-0.6</td>
 <td >0.5</td>
 <td >0.5</td>
 <td >5.8</td>
 <td >6.9</td>
 <td >6.9</td>
 <td >6.1</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; East South Central</td>
 <td >0.6</td>
 <td >0.0</td>
 <td >0.4</td>
 <td >4.3</td>
 <td >5.8</td>
 <td >5.1</td>
 <td >4.5</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; West South Central</td>
 <td >0.1</td>
 <td >0.1</td>
 <td >0.4</td>
 <td >3.9</td>
 <td >6.5</td>
 <td >5.7</td>
 <td >6.1</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Mountain</td>
 <td >0.2</td>
 <td >1.2</td>
 <td >0.6</td>
 <td >8.5</td>
 <td >8.7</td>
 <td >7.8</td>
 <td >7.6</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Pacific</td>
 <td >1.4</td>
 <td >-0.8</td>
 <td >0.7</td>
 <td >6.7</td>
 <td >8.7</td>
 <td >8.0</td>
 <td >7.7</td>
 </tr>
 </tbody>
</table>
&nbsp;

 
 
 
 
 New England: Maine, New Hampshire, Vermont,
 Massachusetts, Rhode Island and Connecticut. 
 Middle Atlantic: New York, New Jersey and Pennsylvania. 
 East North Central: Michigan, Wisconsin, Illinois, Indiana and Ohio. 
 West North Central: North Dakota, South Dakota, Minnesota, Nebraska,
 Iowa, Kansas and Missouri. 
 South Atlantic: Delaware, Maryland, D.C., Virginia, West Virginia,
 North Carolina, South Carolina, Georgia and Florida. 
 East South Central: Kentucky, Tennessee, Mississippi and Alabama. 
 West South Central: Oklahoma, Arkansas, Texas and Louisiana. 
 Mountain: Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona and
 New Mexico. 
 Pacific: Alaska, California, Hawaii, Oregon, Washington.
 
 
 
 
</html>

The Federal Housing Finance Agency (FHFA) Price Index for house purchases rose 0.3% (5.7% y/y) during October following a 0.2% September rise. Home price appreciation has eased noticeably this year. Over the past six months, the index [...]

U.S. FHFA House Price Increases

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Consumer confidence in Finland has been steadily slipping. It remains relatively strong, but momentum has definitely soured. The levels for confidence across the various categories are quite mixed. Confidence values are ranked on observations back to January 1996. On that timeline,* the components in the table have standings ranging from their 99th percentile to their 22nd percentile (* The exception is the line-item ‘personal threat of unemployment now.’ That question only emerged in March 2004 so that response is ranked on a shorter timeline than the other components).

Still, the overall reading for confidence as well as for the macro indicators has slipped steadily. For both series, confidence is lower over the most recent 12 months than it was over the previous 12 months. Confidence is lower over six months than over 12 months and confidence is lower over three months than over six months. After all this slippage, the queue or rank standings have the overall indicator at its 68.5 rank percentile and the macro index just above its median at its 54th percentile.

In contrast, the micro reading has continued to improve and has a standing in its 98.2 percentile. So survey respondents are seeing their individual fortunes improve, but there has come to be a creeping degradation in the perception for economy as a whole.

Finland’s economy now has a ranking in its 65.6 percentile, reasonably firm but by no means a strong reading. But in contrast, the outlook for 12 months ahead has a rank standing in its 22.8 percentile. It has been weaker only somewhere between one-quarter and one fifth of the time. That is a strikingly negative result.

Inflation assessment has crept up over more recent readings, but it has only done just that, ‘crept.’ The current inflation assessment ranking is in its 59th percentile, only 9 percentile points above the median reading. Unemployment prospects have a 64th percentile standing, but people seem to feel a higher personal threat with an 82nd percentile standing. The personal threat statistic, however, is exaggerated. It is based on data back to March 2004 when this question was first introduced. And if we evaluate the overall unemployment metric on the same timeline as the personal one, the ranking is elevated to the 79.2 percentile level, putting the two readings on more or less the same footing. So the personal reading is actually not any (or not much) worse off that the overall macro view when the two are evaluated on the same basis.

The environment shows as extremely high standing for the household financial situation (99.3%) as well as for the possibilities for the household to save over the next 12 months (94.9%). The current evaluation for saving is at its 89.1 percentile, also a strong reading. However, it is not a propitious time to purchase durable goods as that rank standing is in its 34th percentile, near the lower one third of its historic band. Nor is it considered to be a favorable time to raise a loan balance with that standing also in its 34th percentile. In fact, both of these two environmental responses with the low rankings have been seeing deterioration fairly consistently over the past two years and in recent sub periods.

Not surprisingly, Finland as an EMU member feels some of the risk that we see exhibited in the overall EMU area’s sector assessments from Markit. The EMU is also feeling strains from exchange rate gyrations, an ongoing and as yet unsolved set of Brexit negotiations and from both existing and pending trade war tensions. The current and individual assessments remain in the solid to strong camp. But assessments of future prospects are less positive and more guarded. The simple outlook for the year ahead is depressingly weak. The personal threat to unemployment is still not as elevated as the slowing may seem to imply. But there is still some significant deterioration in train that should have an eye kept on it.


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Consumer confidence in Finland has been steadily slipping. It remains relatively strong, but momentum has definitely soured. The levels for confidence across the various categories are quite mixed. Confidence values are ranked on [...]

Confidence in Finland Begins to Show Some Unevenness

Blue Chip forecasters expect US to lead aggressive policy rate cuts over coming year—apart from Japan

Ratio of job openings to the number unemployed in the US now below pre-pandemic level

U.S. layoffs not showing as much cooling in labor markets as unemployment rate

While goods prices have moderated, service price inflation remains elevated and sticky

Since Jan 2023, BCEI US outlook has improved, worsened for Japan and the euro area

Persistent negative US economic surprises leading to big rate-cut expectations

Germany is Euro area weakling

Flash PMIs show good start to Q3 in US; loss of momentum in the euro area

Chinese economy on downtrend could threaten global economy

Working age population labor force participation near all-time high as retirements increase

Blue Chip forecasters look for widespread policy rate cuts just ahead

Flash June PMIs point to a widespread slowdown apart from the US

Announcement of snap French election is causing concern across Europe

The UK economy’s post-pandemic under-performance relative to its pre-pandemic trend

US Beveridge Curve back to near pre-pandemic levels

Negative economic surprises in the US but positive in Europe, especially the UK

Latest PMIs show US losing momentum while RoW is gaining momentum

Sticky services prices behind sticky overall PCE inflation

Flash April PMIs point to slower growth in the US but a pickup in Europe and Japan

Outlook strengthens for US while it weakens for other major economies

Crude petroleum prices are having a big impact on inflation expectations

Inflation surprising to upside in the US; by contrast to the downside in the euro area

 Gross Domestic Income is catching up with GDP

FOMC expects GDP growth above trend over the next three years

US core CPI inflation has begun to reaccelerate

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Tom Moeller

240916J20.jpg

240916K20.jpg

The General Business Conditions Index from the Federal Reserve Bank of New York jumped to 11.5 in September from -4.7 in August. It as the first positive number since November 2023. A reading of -4.5 had been expected in the Action Economics Forecast Survey. The percentage of respondents reporting an improvement in business conditions rose to 32.7% from 28.5% in August while the percentage reporting a decline in activity fell to 21.2% from 33.2% last month. The headline index reflects the answer to a single question concerning the state of economic activity. The survey responses were collected between September 3 and September 10.

Haver Analytics calculates a composite index, which is comparable to the ISM manufacturing index. That index rose to 52.0 in September from 47.2 in August. A level of 50 is the breakeven point between expansion and contraction.

The orders index rose to 9.4, its first positive reading in 12 months, from -7.9 in August. The shipments index jumped to 17.9, its highest reading since June 2023, from 0.3. The unfilled orders index rose to 2.1 from -7.4 in August and -11.2 in July. Delivery times shortened as the index improved to -1.1 from -3.2. Inventories jumped to a break-even level of zero from -10.6 in August.

Labor market conditions improved in September. The employment index of -5.7 compared to -6.7 in August, but was the eleventh consecutive month below zero. A lessened 7.1% of respondents reported increases in employment while a smaller 12.8% reported lower employment. The hours-worked index rebounded to 2.9 after falling to -17.8 in August.

Inflation pressures weakened this month. The prices paid index eased to 23.2 in September after falling to 23.4 in August from 26.5 in July. Thirty-one percent of respondents were paying higher input prices, a bit less than in August, while a steady 7.4% reported paying lower input prices. The prices received index also deteriorated to 7.4 from 8.5 in August. Fifteen percent of respondents reported an increase in prices, up from 13.8% in August, while 7.4% reported a decrease in prices, up from 5.3% in August.

Firms grew more optimistic about the outlook. The index for future business conditions of 30.6 this month compared to 22.9 in August and was the highest level since January 2022. The outlook for new orders & shipments surged, but employment eased slightly after surging in August. The future prices paid index jumped to its highest level since February of last year but capital spending plans weakened sharply.

The headline index reflects the answer to only one question concerning general business conditions and is not calculated from the components. The indexes in this report are diffusion indexes and measure the percentage of respondents indicating an increase minus the percentage indicating a decrease.

The New York Fed survey data are contained in Haver’s **SURVEYS** database. The expectations series is in Haver’s **AS1REPNA** database.

240916L20.jpg

240916M20.jpg

- Index increases to two-year high.
- New orders & shipments lead increase as employment improves modestly.
- Prices paid & received readings ease.

U.S. Empire State Manufacturing Index Strengthens in September

240916E.jpg

The European Monetary Union trade surplus moved lower in July. At €15.46 billion, it is down from €17.02 billion in June. The erosion was due to a larger deficit on nonmanufacturing trade as the manufacturing balance actually improved to €39.1 billion from €37.9 billion. However, on nonmanufacturing trade, the deficit swung to -€23.7 billion from -€20.9 billion.

The chart provides the hint that the move back to surplus may have passed its peak as there is a string of surpluses having swept up to higher levels and now engaged in the process of headed for lower levels.

The trend for exports shows overall exports slowing then declining steadily from a growth rate of 2.5% over 12 months to 0.6% over six months to -8.1% over three months. This transition is driven by the growth rates of manufacturing as well as nonmanufacturing exports; both of which transition from positive growth rates over 12 months to negative growth rates over three months.

On the import side, the patterns are inconsistent although they culminate in weakness over three months. Total imports fall 2.5% year-over-year, advance at an 11.4% annual rate over six months, and then decline at a 3.2% annual rate over three months. Manufacturing imports follow this same progression; however, for nonmanufacturers, growth is at 3.2% over 12 months, that expands to a 15% annual rate over six months, and then collapses to -3.4% over three months. Import trends are chaotic.

Turning to three European countries two of them the largest countries in the European Monetary Union, we find Germany has exports declining progressively and imports doing the same. Both German export and import flows are slowing consistently and declining with imports falling faster than exports. For France, exports are accelerating from 4.3% over 12 months to 5.3% at an annual rate over six months to nearly 12% at an annual rate over three months. French imports, in contrast, don't have a clear trend but they are declining on each of those horizons. The U.K. shows declines in exports and imports year-over-year that are relatively balanced and again declines over six months that are relatively balanced for the two flows. But over three months, U.K. exports advance at an 11.3% annual rate while imports are basically unchanged at a 0.1% annual rate.

Export trends for Finland, Portugal, and Belgium find cross trends, with Finland showing a decline in exports of 17.3% at an annual rate over three months. But Portugal shows exports accelerating from 12-months, to six-months, to three-months, culminating in a 45.9% annual rate pace over three months. Belgium shows an export decline over 12 months that gives way to increases over three months and six months but again without a clear trend.

The trends for the three-month growth rates are positive for the EMU aggregates and for the exports of Finland, Portugal, and Belgium. But trends are negative for exports as well as imports for Germany France and the U.K. Over 12 months, most of the calculations show declines in trade flows, underpinning again the notion that manufacturing has been weak in Europe. That weakness lends itself to weakness in both the exports and imports; European weakness in manufacturing naturally leads to knock-on weakness in trade. That is not surprising. It has been the strength in the services sector that has tended to keep growth alive, especially in Europe.

240916.jpg

Rate cuts by central banks are back in the picture despite somewhat mixed inflation news. This week the Federal Reserve is expected to join the rate cut club even though U.S. economic data are hardly as weak as in other countries. The Fed in the U.S. is preparing to cut rates in the quest to pull a rabbit out of its hat and create a soft landing. It's an interesting choice for the Federal Reserve to cut rates when economic conditions are not greatly calling for it and with inflation still over target for 40-plus months running. And gutsy to do it with a presidential election coming up in November. The Fed rate cut is sure to be controversial although with some people calling for rate cuts as large as 50 basis points and even 75 basis points, it seems one of the strategies is for the Fed to deliver a smaller rate reduction and to have that masquerade as temperance. The calls and forecasts of large cuts may take the attention away from the fact that the Fed actually is going to cut rates going into the election under marginally accommodating conditions.

Europe

EMU Trade Surplus Erodes

Tian Yong Woon

In this week's newsletter, we examine China and highlight growing economic concerns. Investors had already expressed scepticism about China’s growth prospects even before the recent data were released (Chart 1). But this scepticism has been further validated by the latest figures, which show ongoing – and often worse than expected - deterioration (Chart 2). However, there is a hint of optimism: China's exports surpassed expectations in August, although import figures were disappointing (Chart 3). Consumer price pressures are increasing, but not severely, while producer prices continue to decline (Chart 4). As for the labour market, youth unemployment remains in double digits, with a significant rise in July, but potentially due to seasonal factors (Chart 5). Lastly, investor sentiment remains cautious, as indicated by continued outflows from Chinese equities, falling stock prices, and a generally negative market mood (Chart 6).

**The China outlook**
China’s recovery remains uneven, with GDP growth slowing significantly to 4.7% y/y in Q2 versus 5.3% in Q1 (Chart 1). And pockets of instability persist. The property sector, for example, continues to struggle, with house prices having fallen more sharply in recent months despite numerous efforts by the authorities to address excess supply and stimulate demand. China continues to face external challenges as well, particularly in the electric vehicle (EV) sector, among others. Major economies, including the EU and Canada, have recently followed the US in imposing tariffs on imports of China-made EVs. Against this backdrop, Blue Chip Economic Indicators (BCEI) panelists downgraded their outlook for China this month. They now forecast GDP growth of 4.7% for 2024 and 4.3% for 2025, down from respective projections of 4.8% and 4.4% last month. These adjustments suggest that China is now seen unlikely to achieve its 5% growth target for this year. 

240916T1.jpg

**China’s latest dataflow**
China’s latest economic data have been less than reassuring, as key indicators for August have both shown declines and fallen short of expectations. As illustrated in Chart 2, the growth rates for China’s industrial production and retail sales dropped more than anticipated, to 4.5% and 2.1% y/y, respectively, from 5.1% and 2.7% in July. Additionally, fixed asset investment growth eased to 3.4% ytd y/y, and the headline unemployment rate ticked up to 5.3%. In the property sector, house prices for both new and existing residential buildings have experienced even sharper y/y declines. Overall, August’s data reinforces the view that China’s economy is slowing, raising concerns about the feasibility of achieving the 5% growth target with only a few months remaining in the year.

240916T2.jpg

Next, we turn to the latest developments in China’s trade. In August, the trade balance unexpectedly widened as exports surged beyond expectations, while import growth slowed considerably (Chart 3). Notably, the increase in exports was driven by strong growth to regions like the EU, although growth to other markets, such as the US, was more subdued. This robust export performance occurred despite declining export prices and recent trade actions against China, including those related to EV imports. Conversely, import growth showed minimal change compared to a year ago, with significant slowdowns in imports from major trading partners, including the US, the EU, and ASEAN countries. While not entirely conclusive, the slowdown in China’s import growth could suggest weaker domestic demand, especially when considered alongside the recent underwhelming economic data.

240916T3.jpg

We move next to touch on latest developments in China's price dynamics. Consumer inflation in China has been gradually increasing, reaching 0.6% y/y in August (Chart 4). However, this rate remains low relative to inflation rates in other major economies, indicating very subdued price pressures in China. This persistent low inflation aligns with the broader narrative of weak domestic conditions, where insufficient demand fails to drive significant increases in prices. Moreover, China’s producer prices continue to decline, with decreases accelerating to 1.8% y/y in August. This deflationary trend in producer prices is likely contributing to the low inflation in traded goods and consumer prices. Falling producer prices not only impact the local market but also affect global economies that import from China, given its significant role as a major supplier. Historically, there has been a strong positive correlation between China’s producer price inflation and its export price inflation, with producer price inflation trends typically leading export price changes by a few months. 

240916T4.jpg

**Youth unemployment in China**
Delving deeper into China’s labour market situation, we focus on the segment that continues to draw significant concern from investors and economists: youth unemployment. This issue has been a persistent challenge in China, with the old measure of youth unemployment having surged to 21.3% before the publication of this statistic was halted after the June 2023 reading (Chart 5). Since then, China has introduced a new measure of youth unemployment, which excludes students, starting from December 2023. Although this new measure has reported rates significantly lower than those of the old measure, there was a notable spike to 17.1% in July this year, re-igniting prior concerns. It is worth noting that the old measure of youth unemployment typically showed a rising trend leading up to and peaking around July, suggesting that seasonality may be influencing the latest figures. Whether the July spike in the new measure reflects a deeper, underlying deterioration in the labour market for China's youth remains to be seen.

240916T5.jpg

**China’s portfolio flows**
Lastly, we touch on developments in China’s portfolio flows. Portfolio outflows have continued to affect Chinese equities in recent months, with approximately $3.4 billion in net selloffs recorded for the three months ending in July, according to IIF data (Chart 6). Contributing to this trend are concerns about the Chinese economy, including weak consumer sentiment, a struggling property market, and overall weak demand as reflected in recent growth readings. In contrast, China’s bond market has experienced strong portfolio inflows throughout the year, driven by low rate expectations, weak inflation readings, and anticipation of further rate cuts by authorities. However, recent efforts by Chinese authorities to curb excessive buying may have led to negative debt flows in July. Looking ahead, assessing the true extent of foreign investment flows into and out of Chinese equities may become more challenging. This is due to the authorities' decision to halt the publication of daily flow data effective August 18 this year.

240916T6.jpg

Asia

Economic Letter From Asia: Concerning China

240913J1.jpg

240913K1.jpg

Import prices declined 0.3% (NSA, +0.8% y/y) during August after rising an unrevised 0.1% in August. Expectations had been for a 0.1% decline in the Action Economics Forecast Survey. Export prices fell 0.7% both m/m and y/y. The previously reported 0.7% increase in July was revised to +0.5%. The Action Economic Forecast Survey had looked for export prices to ease 0.1% in August.

The August decline in import prices was led by a 3.0% weakening (-4.6% y/y) in fuel & lubricant prices which followed a 1.1% July increase. Excluding this decline, import prices edged 0.1% lower (+1.3% y/y) after a 0.1% July improvement. Foods, feeds & beverages prices eased 0.1% (+4.8% y/y) after strengthening 1.5% in July and 1.1% in June. Motor vehicle & parts prices held steady (+2.3% y/y) following a 0.4% gain. Nonauto consumer goods prices slipped 0.1% in August (+0.5% y/y) after falling 0.2% in both of the prior two months. Capital goods prices inched 0.1% higher (0.3% y/y) after holding steady in July.

The August weakening in export prices reflected 1.8% decline (-5.8% y/y) in foods, feeds & beverages prices which came after falling 1.7% in July. Industrial supplies and materials fell 1.1% (-2.0% y/y), following a 1.8% rise. Capital goods prices slipped 0.2% (+1.4% y/y) after holding steady, while auto export prices improved 0.1% (4.0% y/y) following a 0.3% rise. Nonauto consumer goods prices rose 0.1% (-1.5% y/y) and reversed the July decline. Overall, agricultural export prices fell 2.0% (-6.9% y/y), the same as in July. Prices of nonagricultural exports declined 0.6% (-0.1% y/y) following a 0.8% rise in July.

The import and export price series can be found in Haver’s **USECON** database. Detailed figures are available in the **USINT** database. The expectations figure from the Action Economics Forecast Survey is in the **AS1REPNA** database.

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- Import price weakness is led by lower oil prices.
- Price declines of other imported goods are widespread.
- Export price decline reflects lower food prices.

U.S. Import and Export Prices Drop in August

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The National Association of Realtors' Fixed Rate Mortgage Housing Affordability Index (HAI) increased 1.8% (1.2% y/y) in July to 95.0 after falling 0.2% to 93.3 in June. The level of home affordability has plunged 46.9% from a peak of 179.0 in April 2020.

The rise in affordability reflected a 1.0% decline (+4.2% y/y) in the median price of an existing single-family home to $428,500. This followed five straight monthly increases to a record $432,900 in June. The price weakening accompanied a drop in the average mortgage rate to 6.93% from 7.00% in June. It remained up sharply from the December 2020 low of 2.73%. The declines lowered the principal & interest payment by 1.7% (+4.3% y/y) to $2,265. That was increased from the most recent low of $984 in February 2020. Monthly mortgage payments averaged 26.3% of income during July versus 26.8% in June. It remained up from a recent low of 14.0% in April 2020.

The decline in housing costs was accompanied by improvement in median family income which increased 0.1% in July (5.5% y/y) to a record $103,278 after rising 0.8% in June.

Housing affordability increased across the country in July. The affordability index rose 4.3% (-3.8% y/y) in the Northeast to 87.9. The index increased 2.5% (1.0% y/y) to 122.3 in the Midwest and it remained the most affordable region of the country to live. In the South, the index rose 1.0% (3.5% y/y) to 98.8 and in the West, where homes are the least affordable, the index rose 0.7% (2.7% y/y) to 69.1.

The Housing Affordability Index (HAI) equals 100 when a median-income borrower qualifies for an 80% mortgage on a median-priced existing single-family home. The HAI had exceeded 100 in each month since July 1990 and reached its all-time high of 213.3 in January 2013; since then, it fell below 100 for the first time in June 2022 (98.8).

Data on Housing Affordability can be found in Haver’s **REALTOR** database. Median home sales prices are also available in **USECON**. Higher frequency interest rate data are found in **SURVEYS**, **WEEKLY**, and **DAILY**.

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- Home prices slip & mortgage rates decline.
- Median income edges up.
- Affordability increases throughout the country.	

Economy in Brief: 2018

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