You may have noticed understaffed hotels and restaurants recently. Approximately 4.3M folks left their jobs in August. Nearly 0.9M of these folks were hospitality workers which represents 7% of the workforce. No other industry experienced as dramatic of a drop – the runner up was retail at 4.7%. The overall drop was 2.9% of the workforce. About 25% of workers that left their service jobs will not return to the industry.
Rates – fluctuated this week and ended near the same level (slightly worse) they started. They are up about 1/4% from this time last year.
Shipping – the Cass Freight Index showed the shipping costs are up 31% year over year in September (up from 27% in August). This could signal more inflation. Biden announced that certain ports will run 24/7 to alleviate supply chain issues.
Inflation – the headline figure for the producer price index showed an increase of 8.6% year over year increase, the largest increase since this data has been tracked (Nov. 2010 first report). Stripping out the more volatile food and energy prices, the increase year over year is 5.9% which is down 0.4% from last month. The major contributor to price increases was the demand for natural gas, up 14.4%.
The Consumer Price Index increase was more tame, up 0.4% month over month and 5.4% over the last year. If you strip out food and energy the year over year is at 4%
Loan Performance – delinquencies are down 2.3% year over year to 4.2%. Seriously delinquent loans (90 days plus) are down 1.3% to 2.8% year over year. Foreclosures are now down to 0.2%. Remember that approximately 1/3 of homes are owned outright.
Mortgage Applications to purchase homes increased 2% from the previous week. Year over year purchases are down 10%. Inventory is down 13% and cash buyers are up. Refinances are down 1% week over week and are down 16% year over year.