Morning Report: Productivity revised upwards

Vital Statistics:

S&P futures3,924-20.25
Oil (WTI)74.87-0.69
10 year government bond yield 3.53%
30 year fixed rate mortgage 6.43%

Stocks are lower this morning on no real news. Bonds and MBS are flat

Third quarter productivity was revised upward from 0.3% to 0.8%, according to the BLS. This was due to a revised 0.5% increase in output and a 0.1% increase in hours worked. Unit labor costs were revised downward from 3.5% to 2.4%. They are up 5.3% over the past four quarters.

Mortgage applications fell 2% last week as purchases fell 3% and refis rose 5%. Refis are still 86% lower than they were last year at this time. “Mortgage applications decreased 2 percent compared to the Thanksgiving holiday-adjusted results from the previous week, even as mortgage rates continued to trend lower,” said Joel Kan, MBA Vice President and Deputy Chief Economist. “Rates decreased for most loan products, with the 30-year fixed declining 8 basis points to 6.41 percent after reaching 7.16 percent in October. The 30-year fixed rate was 73 basis points lower than a month ago – but was still more than three percentage points higher than in December 2021. Additionally, the pace of refinancing remained around 80 percent lower than a year ago.”

Home prices rose 10% in October, according to CoreLogic. This is half the pace of late spring / early summer.

“Following the recent mortgage rate surge above 7%, real estate activity and consumer sentiment regarding the housing market took a nosedive,” said Selma Hepp, interim lead of the Office of the Chief Economist at CoreLogic. “Home price growth continued to approach single digits in October, and it will move in that direction for the rest of the year and into 2023. However,” Hepp continued, “while some housing markets have seen significant recalibration since the spring price peak and are likely to post losses in 2023, further deteriorating for-sale inventory, some relief in mortgage rate increases and relatively positive economic news may help eventually stabilize home prices.” CoreLogic sees home prices rising about 4% next year, although some of the hottest MSAs during COVID will probably see significant declines.

The decline in home prices will take some of the pressure off the inflation numbers, since housing is a key component to the inflation numbers. Rental inflation is coming down, and is probably past the peak, at least according to some market observers.

16 Responses

  1. The plot thickens:

    Edit: Threadreader version:


  2. Interesting read:

    “The Most Consequential First Amendment Case This Term

    303 Creative v. Elenis isn’t about LGBTQ rights, as many people believe it to be, but about what constitutes speech.

    By David French”

    “But here’s where 303 Creative gets truly strange. The Tenth Circuit Court of Appeals held that Smith was engaging in “pure speech” and that Colorado was compelling her speech, but it ruled for Colorado anyway. The reasoning in the majority opinion was extraordinary.

    “This case does not present a competitive market,” the court said. “Rather, due to the unique nature of Appellants’ services, this case is more similar to a monopoly. The product at issue is not merely ‘custom-made wedding websites,’ but rather ‘custom-made wedding websites of the same quality and nature as those made by Appellants.’ In that market, only Appellants exist.”

    Thus, because Smith possessed a monopoly over her own services, the state had a heightened interest in ensuring access to her work.”


    • I would like to see a devout Muslim website designer be forced to create a Draw Mohammed website.


    • who exactly is the plaintiff in this case?


      • Brent:

        who exactly is the plaintiff in this case?

        “Lorie Smith, a Christian, the owner of 303 Creative, and a Colorado graphic artist who declines to make wedding websites for same-sex couples due to her deeply held beliefs about biblical teachings on marriage. And while Smith is willing to serve customers regardless of their sexual orientation, she refuses to express the government’s anti-biblical view of marriage.”


        • so she is suing the government pre-emptively?


        • Brent:

          so she is suing the government pre-emptively?

          I’m not positive, but I believe that is correct. I think her argument is that she is being prevented from doing website designs for weddings because in order to do it legally under Colorado law, she has to service same – sex marriages, and she doesn’t want to for religious reasons. And she isn’t wrong…the state isn’t arguing that there has been no enforcement against her. It seems intent on doing exactly what she says it will do, and is simply arguing that the Constitution allows it to do so. And SCOTUS agreed to hear the case, which it wouldn’t have done if it didn’t think the case was “ripe” yet, I don’t think.


        • Why? Seems like an utter waste of money unless someone else is paying her legal fees.


        • Brent:

          Seems like an utter waste of money unless someone else is paying her legal fees.

          It could be that someone else is paying. But if she announces that she designs websites for weddings and then refuses a same sex-couple, she will have to pay twice…first to defend herself locally from the enforcement action (which she will lose) along with any penalties imposed by Colorado, and then to challenge the result. Seems to me she is just skipping the preliminaries and going straight to the important part.


    • Yesterday I listened to the oral arguments. I don’t recall the issue of a monopolistic service producing a “heightened” state interest being mentioned at all. It was definitely not the focus of any single member of the court.


  3. They know, they just don’t care.

    That idiot Psych at PL would never acknowledge the nature of National Socialism and the Left. It’s anathema to admit it.


    • They probably do believe it. The modern left has absolutely zero self-awareness.

      Shooter is RW. RW is bad
      Shooter is LW. Guns are bad.


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