Morning Report: Personal incomes come in lower than expected

Vital Statistics:

  Last Change
S&P futures 4,698 12.2
Oil (WTI) 72.87 0.18
10 year government bond yield   1.46%
30 year fixed rate mortgage   3.33%

Stocks are flattish this morning on the last trading day before a long weekend. Bonds and MBS are flat as well.


Personal incomes rose 0.5% in November, and personal consumption expenditures rose 0.6%. Both numbers were a decrease from October and came in below expectations.

The PCE Price index rose 5.7% on a headline basis and 4.7% if you strip out food and energy. The PCE inflation index is the Fed’s preferred measure of inflation, so it is running hot.


The MBA is out with their latest forecast for 2022. Here are the main highlights:

  • Purchase originations will rise from $1.6T to $1.7T
  • Refinance originations will fall from $2.3T to $.9T
  • 30 year fixed rate mortgage will rise from 3.1% to 4%
  • Home price appreciation will fall form 16% to 5%
  • Housing starts will rise from 1.6MM to 1.7MM


Initial Jobless Claims came in at 205k. We are back more or less to pre-pandemic levels.


New Home Sales rose to an annualized pace of 744k last month, according to Census. This was a touch below expectations, although this number is historically quite volatile with large sampling errors.

Regarding new home sales, I find the MBA’s forecast of housing starts maintaining current levels to be pessimistic. Historically, housing starts have been around 1.5 to 1.6 million, however we have seen starts spike well above 2 million several times. Given the supply and demand imbalance, I wouldn’t be surprised to to see starts hit those sorts of levels in the next few years, especially if commodity prices decline and more younger workers enter the skilled trades.

16 Responses

  1. Merry Christmas everyone!


  2. Merry Christmas


  3. Merry Christmas.

    When we returned from our long AMTRAK trip to PA this site had changed its default look and I finally spent this morning getting it to look the way I want.

    On the trip itself: short story is if you are in no hurry Amtrak can be a more pleasant choice than either driving or flying long distances. We did not feel tired and needing a vacation when we finally got home.

    There is plenty to complain about, of course. Most telling, trains east of San Antonio and eastbound trains out of Chicago don’t serve dining car full meals, but reheated microwave crap. We will save our vacation train trips for the west, until that changes.

    Pricing for seniors is pretty damend good. We could take sleepers to LA, then Portland, then Glacier National Park, then Chicago, then back to Austin for about $3200 with all meals [good to great meals, alcohol with dinner, complimentary non alcoholic beverages all day] included and sleeping like babies every night. Compare that to driving, motels,and restaurants, for a similar 5000 mi tour and it is a good deal cheaper, plus you get to relax and look out the windows and read and listen to stuff during the day.

    At least for seniors – we used to drive 12-14 hours a day and now we will not drive more than 5 in the east and a bit more in the west. That 5000 mi around the west drive would take at least 11 hotel nights for us now, and over 60 meals between us, not counting the cities/parks visited, which would be the same either way

    For example, we would have only stayed a night in Sacramento on the LA to Portland drive 10 years ago, but now we would have to stay a night in Stockton and a night in Medford, or something like that. Add in the car cost, and the AMTRAK is a bargain, even without the non monetary benefits.

    Meanwhile, y’all stay safe.

    Liked by 1 person

  4. Merry Christmas all.


  5. I can’t decide which is funnier, what the guy did or the lefties’ butthurt over it.

    I think my favorites are the ones that think Biden has the mental capacity to even know what’s going on.


    • The responses are such an exercise in leftist projection


    • The Pearl-clutching over “Let’s go Brandon” is astonishing. Dude did not provide appropriate obeisance to the ruling elite! Tragedy! Christmas is dead!

      Yet reverse that and have someone directly say “fuck Trump” in the same sort of context and these same people would be remarking on the caller’s heroism.

      On the one hand, I do get the objection. I’d prefer every practiced traditional civility and we all lived in a Jane Austen novel. On the other hand, we don’t and this is very mild trolling. Eye-rolls are appropriate but the “oh my god this person with THE WORST AND HATES CHRISTMAS AND NON-EXISTENT BABY JESUS!” Is an unhealthy artifact of existing solely in a Twitter/Instagram bubble.


  6. We’ll see how well this turns out:


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 )

Twitter picture

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

Facebook photo

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

Connecting to %s

%d bloggers like this: