U.S. homeowners took $49.6 billion in equity from their homes during the first quarter of this year, according to data from the Federal Home Loan Mortgage Corporation reported by the Wall Street Journal. The total cashed out was the most since 2007, but short of the $84 billion owners extracted from their homes in 2006, the WSJ said. Owners cashed...
HOMEOWNERS TRAPPED IN PLACE BY HIGH PRICES
Many U.S. homeowners could sell their houses at a hefty profit but are unwilling to do so if it means entering the frenzied housing market, engaging in bidding wars, and paying top dollar for a new home, the Wall Street Journal reported. As a result, people are living in their current homes longer than usual, shrinking the number of available...
USED CAR PRICES SKYROCKET
The average price of used cars and trucks in the U.S. leaped 10 percent from March to April and is up 21 percent over the past 12 months, according to the Financial Times. This has become a central engine of the country’s accelerating pace of inflation. “Prices are unquestionably higher than they’ve ever been and have unquestionably moved more quickly...
COSTCO CFO CONFIRMS TRENDS JOURNAL FORECAST: INFLATION 2021
As we have noted, the U.S. Federal Reserve has called current pressures inflating prices for everything from milk to manganese “transitory.” Now Costco CFO Richard Galanti has put a tentative timeline to that in a late May earnings call reported by Yahoo Finance. These pressures “will continue for the most part of this calendar year,” Galanti said. Repeating what we...
SERVICE SECTOR: STRONGER RECOVERY AHEAD
Activity in the U.S. services economy in May was stronger than at any time on record, according to the Institute for Supply Management (ISM). The ISM’s services activity index rose from 62.7 in April to 64.0 last month, its highest level ever, the ISM said. Any rating above 50 indicates expansion; the higher the number, the faster the growth. All...
FED PROGRAM WILL SELL BONDS, FUNDS BOUGHT DURING CRISIS
The U.S. Federal Reserve soon will begin to sell the almost $14 billion in corporate bonds and exchange-traded funds it bought to prop up the economy during the economic crisis, the central bank has announced. The sales will be made by the Fed’s Secondary Market Corporate Credit Facility (SMCCF), an emergency vehicle that bought about $5.1 billion in bonds issued...
UNUSUAL RECOVERY BRINGS INFLATION, LACKLUSTER JOB GROWTH
“We’ve never had anything like it,” Allen Sinai, chief economist and strategist at Decision Economics, told the Wall Street Journal. “A collapse and then a boom-like pick-up… is without historical parallel.” Several factors back Sinai’s claim, the WSJ noted in a 3 June analysis: This year through May, 830,000 new businesses were formed that intend to employ more than one...
SOLID JOB GAINS NOT SO SOLID
U.S. employers hired 559,000 workers in May, almost double April’s revised number of 278,000, the U.S. Labor Department reported. The gains fell short of economists’ median estimate that the economy would deliver 674,000 jobs last month, according to Business Insider. In a 1 June speech to the New York Economic Club, Fed governor Lael Brainard predicted that worker shortages would...
SPACs: HERE TODAY, GONE TOMORROW?
Almost 260 special-purpose acquisition companies (SPACs) have amassed $87 billion they must invest by a deadline that is becoming harder to meet, according to data firm SPAC Research. A SPAC or “blank-check company” is a special category of company that goes public, typically at $10 a share, even though it has no assets. When it has stockpiled enough capital, the...