Morning Report: Strong retail sales report

Vital Statistics:

  Last Change
S&P futures 4,680 1.2
Oil (WTI) 81.22 0.43
10 year government bond yield   1.63%
30 year fixed rate mortgage   3.27%

Stocks are flattish this morning on no real news. Bonds and MBS are down.


Retail Sales rose 1.7% in October, according to the Census Bureau. On a YOY basis, they rose 16.3%. Gasoline prices were a big driver of the increase. Electronics retailers also saw decent gains. Ecommerce sales were up 4%.

Overall, this is a good start for the holiday shopping season. Note that Walmart reported third quarter numbers this morning. Same store sales rose 9.2%, which is a strong reading, albeit it is an easy comparison to a year ago.


Industrial Production rose 1.6% MOM in October, while manufacturing production rose 1.2%. Capacity Utilization rose to 76.4% from 75.8%.


Applications for new home mortgages rose 6% from September, but are down 15% compared to a year ago. “The strong monthly gain puts MBA’s estimate of new home sales at its strongest pace since January,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Purchase activity continues to be dominated by higher loan balance transactions, which pushed the average new home loan size up to over $412,000, another new record in the survey. Recent U.S. Census data show an increasing share of new sales are for homes yet to be built or still under construction, and a shrinking share of completed homes. Housing demand remains strong, and buyers are making quick decisions in a still very competitive market.”


Renters who are exiting from the eviction moratorium are seeing a 10% increase in asking rent. “Single-family rental vacancy rates remained near 25-year lows in the third quarter of 2021, pushing annual rent growth to double digits in September,” said Molly Boesel, principal economist at CoreLogic. “Rent growth should continue to be robust in the near term, especially as the labor market improves and the demand for larger homes continues.”

Rent growth was strongest in Miami, rising 27%. Phoenix and Las Vegas rose 20% and 16% respectively. On the other side was the Northeast, where rents rose under 5% on average.


Real Estate investors bought 18.2% of homes in the third quarter, according to Redfin. This has made it difficult for homebuyers who have to compete with these folks. We are seeing lots of institutional money flood into the space as the potential returns in rentals dwarf anything else in the financial markets.

9 Responses

  1. NoVA, this struck me as funny. Ever heard of this guy Don Young?

    “The House GOP Conference will meet for the first time since the House voted two weeks ago to approve the bipartisan infrastructure bill, giving President Joe Biden and Democrats a big political win. Thirteen Republicans voted for the measure. Two even went to the White House on Monday to witness Biden signing the Infrastructure Investment and Jobs Act into law — Reps. Don Young (R-Alaska) and Tom Reed (R-N.Y.). Reed is retiring, and Don Young, well, he’s Don Young. He doesn’t care what anyone thinks.”


    • GOP leadership can’t keep its folks in line–of course, the Democrat leadership doesn’t always have the best luck there, either.

      But GOP hardliners such as Reps. Marjorie Taylor Greene (Ga.), Lauren Boebert (Colo.), Madison Cawthorn (N.C.) and Matt Gaetz (Fla.), among others, have called for retaliation against those 13 Republicans, including stripping their committee assignments or ranking-member posts.

      I gotta admit, I don’t find that appealing myself. Of course, I don’t find a lot of the GOP’s attitude towards the more eccentric conservatives like Marjorie Taylor Greene or Lauren Boebert appealing, either. I’m a believer in a “big tent party” but that includes the nuttier right-wingers that manage to get elected. It also includes a few mavericks, too. Not sure of the stripping of committee assignments but, on the other hand, if there are better candidates for those assignments it’s maybe not such a bad thing.

      Also Don Young has to be approaching retirement, too:

      Donald Edwin Young is an American politician and retired educator serving as the U.S. representative for Alaska’s at-large congressional district since 1973. He is the Republican Party’s longest-serving member of the House of Representatives and of Congress in history, having represented Alaska for 25 terms.

      And he’s 88 years old. He’s the Nancy Pelosi or John Kerry of the GOP!

      And I 100% get why a congresscritter from Alaska voted for the bill.

      In federal highway funding alone, the legislation will send Alaska $3.5 billion. That’s just the start.

      Boyle took note of the large amount of money for ports, and the bill’s emphasis on broadband internet. Alaska will get at least $100 million from one broadband program in the bill. Also, there’s a substantial sum for water and sewer projects.

      “One thing I am super excited about that hasn’t been getting a lot of press is $3.5 billion for the Indian Health Service to build sanitation facilities,” Boyle said. “So I think we might finally see a significant advance in building out water and sewer projects in villages that have never had piped water before.”

      The bill has $75 million for the Denali Commission too, in addition to its regular federal funds.

      “That’s about six times what we’ve been getting in the annual appropriation process in recent years. So it’s a pretty significant expansion of funding,” Boyle said.

      The bill, for instance, creates a new program for “essential ferry service” for rural areas.

      The bill doesn’t say that the Alaska Marine Highway System is the beneficiary of that $1 billion program, but consider the eligibility criteria: The ferry has to serve at least two rural communities that are at least 50 miles apart. Most of the country’s 200 ferry systems travel much shorter distances. Boyle, who was a top Murkowski aide until August, said that provision was the senator’s doing.

      The bill also has $250 million for a pilot project to buy ferries running on electricity or some other low carbon emission fuel. Again, the Alaska ferry service isn’t specified by name, but the bill says at least one grant must be “for a ferry service that serves the state with the largest number of Marine Highway System miles.”


  2. FYI Scott:


    • Also Scott here’s DeBoer in the NYT:


      • “This may be seen as a betrayal of the socialist principles I stand for, which are at heart an insistence on the absolute moral equality of every person”

        I feel like that’s not going to fly with a lot of progressives. Republicans clearly are not the moral equivalent of progressives in good standing.

        That said it’s interesting how so many of the comments insist it’s a branding problem. That, no, most people love “socialism” but that “socialism” is a scary word that most dumb people who don’t subscribe to the NYT so they really need to work on branding and explaining their ideas, people just don’t understand.


        • For the Progressive Left “socialism” means “anything a government does.”

          If you have a Navy, you are socialist.

          But don’t you dare call them socialists.


    • Insane.


Be kind, show respect, and all will be right with the world.

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: