To the point I made in the ADP note that we can now add US manufacturing to the recession side of the ledger, nothing said that better than the awful November Chicago PMI which plunged to 37.2 from 45.2 and well under the estimate of 47. It’s the 3rd straight month below 50 and the lowest print since May 2020. I don’t have the press release yet to see more color.
Pending existing home sales in October fell 4.6% m/o/m, not as bad as the 5.3% drop expected and September was less worse than initially reported as it was revised up by 150 bps to an 8.7% fall. Regardless, pending home sales have fallen in 11 out of the last 12 months for reasons we are all well aware of.
Sales have fallen sharply out West over the past two months with an 11.3% drop in October and 11.7% in September. High prices I’m sure had a pronounced impact there, especially in California. While the more affordable Midwest saw sales rise 3.3% m/o/m after a string of declines.
The NAR said simply, “October was a difficult month for home buyers as they faced a 20 yr high in mortgage rates.” Add in home prices that have risen 40% over the past two years. I’ll also add that while it’s good that mortgage rates have come off their highs, a mortgage rate above 6% is still sticker shock for many as 92% of those that already have an existing mortgage have a rate below 5% according to Fannie Mae.
Job openings in October totaled 10.33mm, down from 10.69mm in September. That is the 2nd lowest number since June 2021 and reflects the growing reluctance on the part of some businesses to add to their payrolls. To this, the hiring rate fell to 3.9% from 4% and that is the lowest since January 2020 if we take out the covid impact. The quit rate moderated too, to 2.6% from 2.7% and that is the least since May 2021.
Job openings in leisure and hospitality was steady but with manufacturing, those slipped to match the lowest since February 2021. Capturing part of the tech sector, openings for professional and business services fell to the lowest since June 2021. For the information sector, openings rose slightly.
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor. Each day The Boock Report provides summaries and commentary on the macro data and news that matter, with analysis of what it all means and how it fits together.