Pandeminomics: If you have tried to find propane recently (this week I felt the squeeze on bar & chain oil & non-ethanol gasoline) you must understand that 50% of people get their heat from liquid propane or natural gas in this country. When power goes out people turn to propane and non-ethanol gas to run generators. Across the U.S. propane prices have increased by 70% caused by Saudi Arabia cutting back production and an increase of demand from the restaurant industry. 2/3 of unemployed people of seriously considered changing their occupation or field of work entirely & more than 60% of unemployed folks have explored new hobbies which has sparked small business creation.
Rates moved up this week by approximately 1/4% due to inflationary signs. Year over year rates are still down approximately 1/4%.
Jobs – approximately 861K people filed for unemployment for the first time last week an increase from the previous week and over 4X levels we were seeing pre-covid. About 18.3M people are filing for ongoing unemployment assistance.
New Construction – Single family starts – while down 12% month over month due to bad weather – are up 17.5% year over year. Single family permits are up 30% year over year.
Fed – The Economy is far from where it needs to be and Fed policy won’t be changing anytime soon. This means the Fed Funds Rate will remain at zero and the Fed will continue to purchase MBS & Treasuries at the elevated levels they are currently purchasing at.
Mortgage Application volume decreased by 5.1% week over week. Purchases are up 15% year over year and refinances are up 51% during the same time frame.
Inflation – the Producer Price Index rose by 1.3% in January (3X market expectations) and on a year over year basis is up to 0.9% to 1.7%. If you strip out the more volatile food and energy prices from the report its up 2% year over year.