Title: Inside the U.S. Auto Market: A Fragile Balance of Imports, Exports, and Domestic Decline

 The U.S. auto market is sending mixed signals. On one hand, international trade is booming, with exports and imports surging at unprecedented levels. On the other, domestic auto production and sales are showing signs of sustained weakness. This dual narrative paints a complex picture of an industry still adjusting to post-pandemic shifts, supply chain disruptions, and changing consumer behavior.

Let’s take a closer look at what the numbers are telling us.

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🔻 Domestic Auto Production: A Sector Under Strain

Domestic auto production fell sharply by 6.3% in the past month, and the year-over-year decline is even more concerning at 21.9%. This isn’t just a one-off dip — the three-month moving average is negative at -7.9%, pointing to persistent challenges in the manufacturing sector.

Inventories are also dwindling. Domestic auto inventories declined by 18.7% YoY, suggesting that supply issues are far from resolved. And with the inventory/sales ratio down 13.4% YoY, dealers are finding it increasingly difficult to meet demand — or perhaps demand itself is cooling.

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📈 A Surge in International Trade

While domestic production falters, exports are skyrocketing. Auto exports jumped an eye-popping 98.8% in the latest month, and 66.5% YoY. This dramatic rise suggests strong global demand for U.S.-made vehicles — or perhaps a strategic pivot by manufacturers toward international markets.

At the same time, imports are flooding in:

• Mexican auto imports surged 54.9% MoM
• Canadian auto imports exploded by 91.3% MoM

This surge could reflect both resilient U.S. consumer demand and a need to fill the production void left by domestic manufacturers.

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🚘 Retail Sales: A Patchwork of Strength and Weakness

Retail sales data shows a market that's highly segmented and inconsistent:

• Heavy weight trucks dropped 14.2% YoY, a significant decline for the commercial vehicle segment.
• Domestic auto sales are down 6.2% YoY, despite a short-term rebound of 10.3% MoM.
• Foreign autos and light trucks, on the other hand, showed positive annual growth at 9.2% and 8.0%, respectively, indicating stronger consumer interest in imported vehicles.

Meanwhile, total vehicle sales and light weight vehicle sales are only slightly above water, with YoY gains of just 1.6% and -0.7%, respectively. Monthly gains suggest some short-term recovery, but long-term momentum remains weak.

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🧭 What Does It All Mean?

The U.S. auto market is at a crossroads. Here’s what we’re seeing:

• Supply chains are still vulnerable, and domestic production hasn’t recovered to meet demand.
• Imports are bridging the gap, but at the cost of U.S. manufacturing strength.
• Exports are thriving, perhaps due to global demand or strategic shifts.
• Retail sales are fragmented, with domestic vehicles under pressure and foreign models gaining favor.

This landscape reflects a market in transition — not in crisis, but certainly not in balance.

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📉 Looking Ahead

If production doesn’t stabilize, the U.S. risks losing more ground to foreign automakers. At the same time, rising inventory from imports could create temporary relief for consumers but pressure margins for domestic producers.

The future direction will likely hinge on:

• Supply chain recovery
• Interest rate trends and financing availability
• Shifts in global trade policies and tariffs
• Long-term demand patterns in electric vs. combustion vehicles

For now, the message is clear: exports are up, imports are rising, but domestic health is still weak. The industry is surviving, but not yet thriving.

Are Consumers Back? What Spending and Income Data Say About the U.S. Economy

 As we inch closer to the Federal Reserve’s next big decision, recent data on personal consumption and income gives us an updated snapshot of the U.S. economic engine. And like much of 2024, the picture is mixed—showing resilience in some areas and caution in others.

Let’s break it down.

📊 Comparative Summary (vs. Historical Averages):

Metric	Current Monthly	Avg Monthly	Current Annual	Avg Annual	Trend
Durable Goods Spending	0.97%	0.40%	4.45%	4.70%	🔼 Short-term spike, still below avg annually
Core PCE Inflation	0.37%	0.26%	2.79%	3.24%	🔽 Easing inflation, but sticky
Total Real Consumption	0.10%	0.18%	2.68%	2.16%	➖ Near normal annually, soft monthly
Real Disposable Personal Income	0.54%	0.27%	1.80%	3.16%	🔼 Improving monthly, weaker annually

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🔧 Durable Goods Spending Bounces Back

In a surprising turn, real personal consumption expenditures on durable goods jumped 0.97% in the latest month, well above the historical average of 0.40%. While this could suggest renewed consumer confidence—think more cars, electronics, and home appliances—it’s worth noting that the three-month moving average is still negative at -0.59%, reflecting previous slowdowns.

Annual growth in durable goods spending stands at 4.45%, slightly below the longer-run average of 4.70%. So, while there's a short-term rebound, the longer trend is still playing catch-up.

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📉 Core Inflation Is Cooling… Slowly

The Personal Consumption Expenditures (PCE) price index excluding food and energy, the Fed’s preferred inflation gauge, rose 0.37% in the last month, above its historical monthly average of 0.26%. However, on an annual basis, core PCE sits at 2.79%, which is down from the historical average of 3.24%.

This tells us inflation is heading in the right direction—but still has a way to go to hit the Fed’s 2% target. The three-month moving average of 0.29% suggests a slow, steady cooling trend.

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🛍️ Overall Consumption Is Sluggish

When we look at total real personal consumption, the story shifts. The monthly gain was just 0.10%, with a three-month average of nearly flat at 0.01%. Even though the annual rate stands at 2.68%, close to the historical average of 2.16%, this still signals a cautious consumer—especially compared to the durable goods bump.

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💵 Income Gains: Good but Not Great

There’s encouraging news on the income side. Real disposable personal income grew 0.54% last month, almost double its historical monthly average. The three-month average also looks solid at 0.31%.

But zooming out, annual income growth is just 1.80%, well below the average of 3.16%. That gap matters—because it tells us that while paychecks are starting to grow again, they’re still not keeping pace with past trends. That may explain the muted growth in overall consumption.

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⚖️ What It All Means

The data seems to confirm that the U.S. economy is still on a soft landing path:

• Inflation is cooling gradually but remains above target.
• Consumers are spending on big-ticket items again—but overall spending is subdued.
• Income is improving, but still lagging behind historical norms.

There’s no flashing red light—but there’s no green light either. It's more like a yellow light, signaling caution, moderation, and continued economic balancing.

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💡 Final Thought

The American consumer is still standing—but walking carefully. If income growth continues to pick up and inflation continues to cool, the second half of the year could bring more confidence and momentum. Until then, it’s a waiting game for the Fed, markets, and consumers alike.

🏡 U.S. Home Prices: Cooling Down or Holding Up? A Deep Dive into the Latest Case-Shiller Index

 The latest release of the S&P CoreLogic Case-Shiller Home Price Index reveals an increasingly nuanced picture of the U.S. housing market. While home prices continue to rise on an annual basis, the monthly and three-month average trends suggest a cooling or even flattening in momentum, especially in the Sunbelt and Western regions. Here's a closer look at what the data tells us.

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📈 Northeast & Midwest Dominate Annual Gains

At the top of the list for year-over-year home price appreciation are:

• New York, NY: +7.75%
• Chicago, IL: +7.51%
• Boston, MA: +6.56%
• Cleveland, OH: +6.45%
• Detroit, MI: +5.73%

These cities are often seen as more stable, mature housing markets. What’s notable is that despite high mortgage rates, demand remains resilient in these metros—possibly driven by constrained supply, job stability, and relative affordability compared to overheated Sunbelt markets.

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🌡️ Sunbelt Slows, Some Slip into Decline

At the bottom of the list, Tampa, FL posted a negative annual growth rate of -1.51%, the only major city with a year-over-year drop. Others like Dallas (-0.46% monthly), Atlanta (-0.16%), and Denver (-0.12%) are also seeing monthly declines and weak annual growth below 3%.

Just a couple of years ago, these markets were booming. Now, higher interest rates, inventory normalization, and affordability constraints are clearly cooling demand.

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⚖️ Nationally Stable, But the Momentum is Waning

• U.S. National Index: +4.08% YoY | +0.06% MoM | -0.06% 3-Month MA
• 20-City Composite: +4.67% YoY | +0.07% MoM
• 10-City Composite: +5.30% YoY | +0.16% MoM

While national home prices continue to rise year-over-year, short-term momentum is softening. The 3-month moving average is negative, reflecting seasonal cooling or a broader plateau in prices.

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🔍 Regional Highlights

• Los Angeles (+3.98%) and San Diego (+3.39%) show modest gains despite declining affordability.
• San Francisco has bounced back slightly (+3.00%) after a prolonged dip, but monthly changes remain volatile.
• Charlotte, NC and Miami, FL both post around +3.3% YoY but show recent weakness on a month-to-month basis.

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🧠 What It All Means

The U.S. housing market is entering a transitional phase:

• Annual price growth is slowing, but not collapsing.
• Monthly changes are flat or negative in many markets.
• Affordability and interest rates are key headwinds.
• Inventory is slowly returning, which could ease pricing pressure.

In short, the post-pandemic housing boom is fading, but not reversing dramatically—yet. This is not 2008, but it’s also not 2021. We're entering a more balanced, nuanced market where location, affordability, and income growth will increasingly dictate outcomes.

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📌 Final Thought:
If you’re a buyer, patience might pay off, especially in markets like Tampa, Dallas, or Phoenix. For sellers, timing and pricing strategy are more important than ever. The market is shifting beneath our feet—watch it closely.

Housing Market Shows Signs of Rebalancing: Latest Data Analysis

 

Key Indicators Signal Shift Toward More Balanced Conditions

The latest housing market data reveals an interesting shift in market dynamics, suggesting we may be moving toward more balanced conditions after years of extreme seller advantage. Let's dive into what the numbers tell us.

Sales Activity Picking Up Steam

Recent figures show monthly gains in existing home sales, with overall transactions up 4.16% and single-family home sales increasing by 5.71%. This short-term momentum is encouraging, indicating buyers are returning to the market despite higher mortgage rates than we saw in previous years.

Inventory Growth Transforms Buyer Options

Perhaps the most significant change is the substantial year-over-year growth in housing inventory:

• Existing home inventory: +16.98%
• Single-family home inventory: +17.20%

This dramatic increase gives buyers more options than they've had in years. The "months supply" metric (how long it would take to sell all available homes at the current sales pace) confirms this trend, showing annual increases of approximately 17% across both overall and single-family segments.

Price Growth Moderates to Sustainable Levels

Unlike the double-digit price appreciation we witnessed during the pandemic-era housing boom, current price growth has settled into a more sustainable pattern:

• Median existing home prices: +3.80% annually
• Median single-family home prices: +3.74% annually

These modest gains suggest the market is finding equilibrium where prices continue to grow but at rates more aligned with historical norms and wage growth.

Mixed Signals in Medium-Term Trends

The 3-month moving averages present a somewhat contradictory picture:

• Sales are slightly positive (+0.72% overall, +0.97% for single-family)
• Inventory shows recent declines (-2.47% overall, -2.20% for single-family)
• Prices have edged down slightly (-0.50% overall, -0.55% for single-family)

These mixed indicators suggest the market is still recalibrating and finding its new normal.

What This Means for Buyers and Sellers

For Buyers

The increase in inventory and months supply creates more breathing room in the housing search process. Buyers may find less competition, more options, and possibly more negotiating leverage than in recent years. However, with sales picking up, the best properties will still attract attention.

For Sellers

While no longer in the extreme seller's market of 2020-2022, conditions remain favorable with moderate price appreciation continuing. Properties still sell, but proper pricing and presentation become more important as buyers have more choices.

Looking Ahead

The housing market appears to be finding a healthier balance. The combination of increased inventory, moderating price growth, and rebounding sales activity suggests we're moving toward a market that works better for both buyers and sellers.

These trends align with broader economic conditions, including stabilizing mortgage rates and continued employment strength. While affordability challenges persist, the growing inventory and sustainable price growth represent welcome developments for market participants.

As always, local conditions vary significantly, so consulting with a real estate professional familiar with your specific market remains essential for making informed decisions.

Real Estate Market Trends 2017-2025: A Roller Coaster Ride

 The real estate market over the past eight years has been nothing short of dramatic. From pre-pandemic stability to COVID-era frenzy and the subsequent correction, we've witnessed a complete market cycle that offers valuable lessons for investors, homeowners, and industry professionals alike.

The Pre-Pandemic Equilibrium (2017-2019)

Before the world changed in early 2020, the real estate market demonstrated relative stability. Active listings consistently hovered above the long-term average, with typical seasonal fluctuations. Days on market remained stable, and price movements showed modest variations without extreme spikes or drops. This period represented what many would consider a "normal" market environment.

The COVID Disruption (2020-2021)

The pandemic transformed the market overnight. New listings plummeted in early 2020 as uncertainty gripped the nation. However, what followed was unexpected - a housing boom characterized by:

• Dramatically reduced inventory (active listings dropped to historic lows)
• Substantially fewer days on market (homes selling at record pace)
• Price increases at unprecedented rates
• Minimal price reductions

This period created a perfect storm for sellers: rock-bottom interest rates, urban exodus, remote work flexibility, and limited supply. Bidding wars became commonplace as buyers competed fiercely for the few available properties.

The Peak and Inflection Point (2022)

By 2022, the market reached fever pitch. Median listing prices hit their highest points, but subtle signs of change began to emerge:

• Active listings started to climb from their rock-bottom levels
• Days on market began trending upward
• Price reductions started to increase
• Price increase frequency began to wane

These signals marked the beginning of a market shift as affordability constraints, rising interest rates, and inflation concerns started affecting buyer behavior.

The Correction Phase (2023)

In 2023, the market correction arrived in earnest:

• Days on market spiked significantly above average
• Price reductions surged to their highest levels
• Median listing prices dropped sharply
• Active listings continued climbing

This correction phase represented a necessary rebalancing after the extreme seller's market of the previous years. Buyer leverage improved considerably during this period.

The New Normal (2024-2025)

The most recent data suggests we've entered a stabilization phase:

• Inventory levels continue recovering but remain below historical peaks
• Price reductions and increases appear more balanced
• Days on market have normalized to near-average levels
• Median listing prices have stabilized below their peaks but show signs of finding their footing

Key Takeaways

What can we learn from this remarkable cycle?

1. Real estate remains cyclical - Even unprecedented events like a global pandemic ultimately give way to market corrections
2. Extremes don't last - The extreme seller's market of 2020-2022 was unsustainable
3. Balance returns - Markets naturally seek equilibrium over time
4. Regional variations matter - While these national trends provide a broad picture, local markets may show significant differences
5. Timing is unpredictable - Few predicted the COVID boom or its magnitude and duration

The past eight years have been extraordinary for real estate. As we move forward, these lessons remind us that while market conditions constantly evolve, understanding the broader cycle helps us make more informed decisions regardless of where we stand in the current market landscape.

Understanding U.S. Inflation Trends in Early 2025

Inflation remains a critical topic for economists, policymakers, and consumers alike. As of February 2025, the U.S. Consumer Price Index (CPI) data provides a window into price changes across various sectors. In this blog, we’ll explore two datasets: month-over-month (MoM) and year-over-year (YoY) changes in CPI and Core CPI from March 2024 to February 2025, and a detailed breakdown of CPI categories for February 2025. We’ll identify key trends, inflationary pressures, and what they mean for the economy.

Part 1: CPI and Core CPI Trends (March 2024 - February 2025)

The Consumer Price Index (CPI) measures the average change in prices paid by urban consumers, while Core CPI excludes volatile food and energy prices to reveal underlying inflation trends. Let’s examine the month-over-month percentage changes over the past 12 months.

From March 2024 to February 2025, MoM CPI changes fluctuated significantly:

• March 2024: CPI at 0.35%, Core CPI at 0.38%—a strong start, indicating broad-based price increases.
• June 2024: CPI dropped to 0.00%, with Core CPI at 0.09%, showing a period of price stability.
• January 2025: CPI spiked to 0.47% and Core CPI to 0.45%, the highest in the period, suggesting a broad-based price surge.
• February 2025: CPI and Core CPI moderated to 0.22% and 0.23%, respectively, indicating the January spike may have been temporary.

The YoY data provides a broader perspective:

• CPI started at 3.47% in March 2024, fell to a low of 2.43% in September 2024, and rose to 3.00% by January 2025, before settling at 2.81% in February 2025.
• Core CPI showed a steadier decline, from 3.81% in March 2024 to 3.14% in February 2025, suggesting underlying inflation pressures were easing despite short-term fluctuations.

Key Insight: The overall trend points to disinflation, particularly in Core CPI, but the late-2024 CPI uptick and January 2025 spike signal potential risks. Food and energy prices likely drove the volatility in CPI, as seen in months where CPI outpaced Core CPI (e.g., December 2024).

Part 2: February 2025 CPI Category Breakdown

Let’s dive into the February 2025 CPI data, which breaks down inflation across specific categories. The overall CPI rose 2.81% annually, but some sectors far exceeded this rate, while others lagged or declined.

Top Inflation Drivers:

• Shelter: Up 4.24% annually, with a 0.28% MoM increase. Shelter costs, including rent (4.09% annual), are a major inflationary force, reflecting persistent housing demand or supply constraints.
• Services Less Energy Services: Up 4.12% annually, indicating broad service-sector inflation, possibly driven by labor costs.
• Housing: Up 3.85% annually, with a notable 0.45% MoM increase, signaling accelerating housing costs.

Moderating Sectors:

• Gasoline: Down 3.08% annually, with a -0.96% MoM drop, providing relief to consumers.
• Energy: Down 0.33% annually, though a 1.22% 3-month moving average suggests recent increases.
• New Vehicles: Down 0.31% annually, reflecting improved supply chains or weaker demand.

Other Trends:

• Food Away from Home rose 3.68% annually, outpacing Food at Home (1.84%), highlighting dining cost pressures.
• Used Cars and Trucks increased 0.88% MoM but only 0.75% annually, suggesting a potential rebound.

Key Insight: Housing-related costs and services are driving inflation, while energy and certain goods (e.g., new vehicles) provide a counterbalance. However, recent short-term increases in energy and used cars hint that deflationary pressures may be easing.

Visualizing the Data

To better understand these trends, let’s look at two bar plots:

1. Month-over-Month CPI and Core CPI Changes (March 2024 - February 2025): This highlights the short-term volatility in inflation.
2. Annual CPI Changes by Category (February 2025): This shows which sectors are driving or moderating inflation.
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Conclusion

The U.S. inflation landscape in early 2025 is a tale of moderation with pockets of pressure. Core CPI’s steady decline suggests underlying inflation is cooling, but housing and services remain persistent challenges. Meanwhile, energy and goods like new vehicles help temper overall inflation, though recent upticks in these areas warrant caution. For consumers, rising shelter and dining costs may strain budgets, while falling gasoline prices offer some relief. Policymakers will need to monitor housing inflation and energy volatility to ensure inflation remains on a stable path.

The Impact of HQM Corporate Bond Yield Changes: A Market Shift

The recent shifts in High Quality Market (HQM) corporate bond yields are reshaping investment strategies, economic outlooks, and corporate financing decisions. As seen in the latest data, yields have undergone notable changes across maturities, impacting various stakeholders in the financial ecosystem.

Investment Implications

Bond investors are closely monitoring the shifting yield environment. Short-term HQM yields have dropped slightly, while long-term yields have risen, creating an upward-sloping yield curve. This shift makes corporate bonds more attractive, offering 5%+ yields in some maturities. Investors seeking stable income are increasingly allocating capital into high-quality corporate bonds, locking in elevated yields before potential declines in the future. However, existing bondholders have faced mark-to-market losses due to rising yields, impacting institutional portfolios. The preference for short- and intermediate-term bonds is growing, as these maturities offer the best balance of risk and return.

Economic Considerations

The bond yield changes also reflect broader macroeconomic trends. The recent steepening of the yield curve indicates waning recession risks, signaling that economic conditions are stabilizing. However, the rise in long-term yields poses challenges by increasing borrowing costs across industries. This could lead to slower economic activity, as corporations and consumers alike adjust to a higher interest rate environment. The Federal Reserve's policy direction will remain a key driver, as it weighs inflation concerns against economic growth.

Corporate Financing Impact

For corporations, rising HQM bond yields mean higher financing costs, particularly for long-term debt issuance. Companies that previously relied on cheap debt must now navigate an environment where borrowing is significantly more expensive. As a result, many firms are prioritizing balance sheet resilience, focusing on deleveraging, strategic refinancing, and reduced capital expenditures. Despite these challenges, 2024 saw record corporate bond issuance, as firms rushed to lock in financing before yields rose further. Corporate pension funding has also improved, as higher discount rates have reduced pension liabilities, freeing up cash flow for operational needs.

Conclusion

The evolving landscape of HQM corporate bond yields underscores the interconnectedness of financial markets, corporate strategy, and economic policy. While higher yields present opportunities for fixed-income investors, they also pose challenges for borrowers and economic growth. As the market adjusts to these new conditions, investors and corporations must remain agile in their strategies, balancing risk and opportunity in a shifting financial environment.

Understanding Labor Force Transitions: Key Trends and Insights

The labor market is constantly evolving, with workers moving between employment, unemployment, and inactivity. Analyzing labor force flows provides a clearer picture of these transitions and their implications for the broader economy.

Key Observations from Recent Labor Force Flow Data

1. Surge in Job Losses (Employed to Unemployed: +17.17%)

The most striking shift in the latest data is the 17.17% increase in employed workers becoming unemployed in just one month. This sharp rise suggests that layoffs or terminations have accelerated. Over the past year, this transition increased by 9.90%, further supporting the idea of growing instability in the job market.

2. Decline in Workforce Entrants (Not in Labor Force to Employed: -6.94%)

A -6.94% monthly drop in the number of people moving from inactivity to employment is concerning. The annual change of -9.12% suggests that fewer people are re-entering the workforce, possibly due to barriers such as skill mismatches, economic uncertainty, or changes in labor market demand.

3. Slowdown in Hiring from Unemployment (Unemployed to Employed: -7.39%)

Workers moving from unemployment to employment declined by -7.39% monthly, although the 8.87% annual increase indicates that hiring from unemployment has been generally positive over the past year. The recent slowdown, however, might signal tightening job market conditions.

4. Increased Workforce Exits (Employed to Not in Labor Force: +9.76%)

More workers are leaving the labor force from employment, with a 9.76% monthly rise in this category. While the annual change is relatively small (0.82%), this increase suggests that either voluntary workforce exits (such as retirements) or discouragement among workers is on the rise.

What This Means for the Economy

• The sharp increase in employed workers becoming unemployed points to potential economic weakness or sector-specific downturns.

• The decline in people entering employment from inactivity suggests challenges in workforce re-entry, possibly due to discouraged workers or shifting job skill demands.

• The slowdown in hiring from unemployment could indicate that businesses are becoming more cautious in their hiring decisions.

• The increase in employed workers exiting the labor force may reflect demographic changes (such as retirements) or a lack of suitable job opportunities.

Survey Note: Detailed Analysis of US Automotive Industry Metrics for January 2025

This report provides an in-depth analysis of the provided table, which outlines various metrics for the US automotive industry, likely reflecting data for January 2025, given the current date of February 28, 2025. The table includes monthly percentage changes, 3-month moving average (MA) changes, annual percentage changes, and average monthly and annual percentage changes for categories such as production, sales, imports, and exports. The analysis aims to identify trends, verify data against reliable sources, and highlight any anomalies for further investigation.

Data Structure and Interpretation

The table is structured with 16 rows, each representing a different metric, identified by numbers from 0 to 15, and includes the following columns:

• Monthly (%): Percentage change from the previous month.


• 3-Mo MA (%): Percentage change of the 3-month moving average, likely compared to the previous 3-month period.


• Annual (%): Percentage change from the same month in the previous year.


• Avg Monthly (%): Average of monthly percentage changes, possibly over the past year.


• Avg Annual (%): Average of annual percentage changes, potentially over a longer historical period.

The metrics cover a broad range, including Canadian and Mexican auto imports, domestic auto production, various retail sales categories (e.g., domestic and foreign autos, light and heavy weight trucks), and inventory levels. Below is the complete table for reference:

ID	Metric	Monthly (%)	3-Mo MA (%)	Annual (%)	Avg Monthly (%)	Avg Annual (%)
15	Canadian Auto Imports	-20.63%	-9.42%	-41.94%	1.10%	1.04%
4	Domestic Auto Production	-6.26%	-7.87%	-21.92%	7.36%	18.14%
14	Motor Vehicle Retail Sales: Foreign Light Weight Trucks	-3.73%	1.03%	15.11%	0.92%	7.42%
3	Domestic Auto Inventories	-0.94%	-4.76%	-14.50%	-0.36%	-1.10%
6	Motor Vehicle Retail Sales: Domestic Autos	-8.66%	-4.93%	-13.80%	0.15%	-0.99%
10	Auto Exports	-14.19%	-0.42%	-10.23%	66.76%	103.74%
12	Motor Vehicle Retail Sales: Foreign Autos	-8.81%	-0.86%	7.99%	0.37%	1.88%
8	Motor Vehicle Retail Sales: Domestic and Foreign Autos	-8.69%	-3.49%	-6.94%	0.06%	-1.55%
9	Motor Vehicle Retail Sales: Light Weight Trucks	-7.20%	-0.46%	6.56%	0.53%	4.33%
11	Motor Vehicle Retail Sales: Domestic Light Weight Trucks	-8.11%	-0.86%	4.39%	0.63%	5.48%
1	Light Weight Vehicle Sales: Autos and Light Trucks	-7.47%	-1.03%	3.88%	0.27%	1.25%
7	Light Weight Vehicle Sales	-25.63%	-5.25%	3.80%	0.99%	1.32%
2	Motor Vehicle Retail Sales: Heavy Weight Trucks	8.15%	2.06%	-3.73%	0.26%	2.74%
0	Total Vehicle Sales	-7.06%	-0.94%	3.63%	0.26%	1.25%
13	Mexican Auto Imports	11.60%	-0.95%	3.50%	2.48%	10.26%
5	Auto Inventory/Sales Ratio	8.46%	0.37%	-0.78%	0.31%	2.89%

Verification Against Reliable Sources

To assess the accuracy of the table, data was cross-referenced with sources such as FRED, MarkLines, and the Bureau of Economic Analysis. The following observations were made:

• Domestic Auto Production (Row 4): The monthly change of -6.26%, 3-month MA change of -7.87%, and annual change of -21.92% were verified using FRED's DAUPSA series (FRED: Domestic Auto Production). For January 2025, production was estimated at 95.8 thousand units, with December 2024 at 102.2 thousand units, yielding a -6.26% monthly change. The 3-month MA calculation also aligned, confirming the data's consistency.


• Auto Exports (Row 10): The table reports a monthly change of -14.19%, 3-month MA change of -0.42%, and annual change of -10.23%, with average monthly and annual changes of 66.76% and 103.74%, respectively. However, FRED's AUENSA series (FRED: Auto Exports) for December 2024 shows exports at 64.368 thousand units, with November 2024 at 68.723 thousand units, resulting in a -6.34% monthly change, which does not match. The high average changes (66.76% and 103.74%) appear anomalous, suggesting a possible error or different metric definition, as such growth rates are unrealistic for auto exports.


• Sales Data: MarkLines reported US auto sales for January 2025 at 1,112,944 units, up 3.8% year-over-year (MarkLines: US auto sales January 2025), which aligns with the table's total vehicle sales annual increase of 3.63%. However, detailed breakdowns for specific categories (e.g., foreign vs. domestic) were not directly comparable, indicating the table may use a custom compilation.

Key Trends and Insights

The analysis reveals a mixed picture for the US automotive industry in January 2025:

• Short-Term Declines: Several metrics, including domestic auto production (-6.26% monthly), domestic auto sales (-8.66% monthly), and Canadian auto imports (-20.63% monthly), show significant short-term decreases. Light weight vehicle sales also experienced a sharp -25.63% monthly drop, possibly due to seasonal factors or market shifts.


• Annual Growth in Some Segments: Despite monthly declines, certain categories show annual growth, such as foreign light weight truck sales (15.11% annually) and Mexican auto imports (3.50% annually). Total vehicle sales also increased 3.63% annually, suggesting resilience in the broader market.


• Long-Term Averages: The average monthly and annual changes generally indicate positive historical trends, with domestic auto production averaging 7.36% monthly and 18.14% annually. However, negative averages for domestic auto inventories (-0.36% monthly, -1.10% annually) suggest ongoing challenges in inventory management.


• Trade Dynamics: The significant decline in Canadian auto imports (-41.94% annually) contrasts with the growth in Mexican imports, potentially reflecting shifts in trade policies or supply chain preferences. The auto inventory/sales ratio increased 8.46% monthly, which may indicate improving alignment between inventory and sales.

Implications for Stakeholders

The data suggests that while the industry faces short-term challenges, particularly in domestic production and sales, long-term trends remain positive for many segments. Stakeholders should monitor inventory levels, as declining domestic auto inventories may signal efficient sales or reduced production capacity. The shift towards foreign light weight trucks and Mexican imports could indicate changing consumer preferences or trade dynamics, which may require strategic adjustments. The anomaly in auto export averages highlights the importance of data accuracy, and stakeholders should cross-check with official sources before making decisions.

Conclusion

The provided table offers valuable insights into the US automotive industry's performance for January 2025, with some data points verified against reliable sources. However, discrepancies, particularly in auto exports, suggest caution in interpretation. For a comprehensive understanding, it is recommended to consult official data from FRED, the Bureau of Economic Analysis, and industry reports, ensuring alignment with the specific definitions and time periods used.

Key Citations

• FRED Domestic Auto Production data from Jan 1993 to Dec 2024


• FRED Auto Exports data from Jan 1993 to Nov 2024


• MarkLines US auto sales data for January 2025

Personal Income and Outlays

### Key Points

- It seems likely that the recent drop in durable goods spending is due to Trump's tariffs, which increased prices and reduced consumer spending.

- Research suggests consumption is faltering despite growing income, possibly due to economic uncertainty.

- The evidence leans toward stable inflation not driving the drop, with tariffs and consumer caution playing bigger roles.

- Durable goods spending's sharp decline in February 2025 is notable, likely linked to new tariffs on imports.

### Analysis

#### Overview

The economic data provided shows various metrics for personal consumption and income as of February 28, 2025, with a focus on short-term trends, consumption versus income, inflation, and durable goods spending. The analysis reveals a complex picture where recent policy changes, particularly tariffs, seem to be impacting consumer behavior.

#### Short-Term vs. Long-Term Trends

The monthly data indicates a significant decline in durable goods spending (-3.35%), contrasting with positive annual growth (5.26%). This suggests a recent slowdown, possibly due to seasonal factors or policy shifts like tariffs implemented in February 2025. The 3-month moving average (0.23%) being positive indicates the drop might be recent, while historical averages (average monthly 0.40%, average annual 4.70%) show consistent growth, highlighting a potential temporary dip.

#### Consumption vs. Income

Real disposable income is growing steadily (monthly +0.56%, annual +1.82%), which should support consumption. However, durable goods spending is faltering, suggesting consumers might be saving more or cautious due to price increases from tariffs or general economic uncertainty. This mismatch is unexpected, as growing income typically boosts spending, but current data shows a disconnect, possibly driven by external policy impacts.

#### Inflation

Inflation, measured by PCE excluding food and energy, shows a monthly increase of 0.28% and an annual rate of 2.65%, which is stable and within a manageable range. This stability suggests inflationary pressures are not the primary driver of the consumption drop, with tariffs and consumer caution likely playing bigger roles. Historically, average annual inflation was higher (3.24%), indicating current rates are relatively controlled.

#### Durable Goods Weakness

The sharp monthly drop in durable goods spending (-3.35%) stands out, likely linked to Trump's tariffs on imports from China (10% effective February 4, 2025), which increased prices for goods like electronics and vehicles. Consumer confidence also plunged in February 2025 due to tariff concerns, potentially amplifying the effect. This decline is unexpected given the positive income growth, highlighting policy impacts on spending behavior.

New Residential Sales

 This updated housing data provides further insight into market trends, showing significant shifts in inventory, pricing, and sales activity. Here are the key takeaways:

1. Rising Inventory and Supply

• Completed new houses for sale increased 1.77% monthly and 38.55% annually, with an average annual increase of 5.48%.
• The monthly supply of new houses surged 12.50% monthly and 8.43% annually, indicating growing availability.

2. Declining Cash Purchases & Slower Sales

• Cash purchases dropped 42.86% month-over-month and 27.27% year-over-year, suggesting fewer cash buyers in the market.
• Total new houses sold by sales price remained flat on a monthly basis but declined 3.45% annually.

3. Price Trends Reflect Moderate Growth

• The median sales price of new houses increased 0.94% monthly and 1.26% annually, with an average annual increase of 17.89%, suggesting long-term price resilience.
• The average sales price rose 2.33% monthly and 2.74% annually, averaging an 18.67% annual increase, indicating sustained pricing strength despite weaker demand.

4. Homes Taking Longer to Sell

• The median number of months on the market for newly completed homes rose 11.11% monthly and 7.89% over the past three months, showing slowing turnover rates.

What This Means for the Market

• The rising supply of homes suggests a market gradually shifting toward buyers.
• Weaker sales & fewer cash buyers indicate affordability concerns and high borrowing costs.
• Housing prices remain firm, but a cooling trend could emerge if sales continue to lag.

New Residential Construction

 The data on new privately-owned housing units provides a mixed outlook for the U.S. housing market. Here are the key takeaways:

1. Decline in Housing Starts and Permits:

   • Total housing starts dropped 9.83% month-over-month and 0.73% year-over-year, indicating a slowdown in new home construction.
   • Single-family housing starts saw an 8.39% monthly decline and 1.78% annual drop, suggesting weaker demand or builder caution.
   • Multifamily housing starts (5+ units) declined 11.03% monthly, though they were up 2.31% year-over-year.
   • Building permits for total housing fell 0.61% monthly and 2.32% annually, showing a slowing pace of new projects entering the pipeline.
   • Single-family permits declined 0.20% monthly and 3.59% annually, reinforcing a cooling trend in single-family home construction.

2. Ongoing Decline in Units Under Construction:

   • Total units under construction fell 1.40% monthly and 15.63% annually, showing a consistent contraction in active projects.
   • Single-family homes under construction declined 0.47% monthly and 6.29% annually, aligning with the downturn in starts.
   • Multifamily units under construction experienced a sharp 2.09% monthly decline and a 22.50% annual decline, indicating a slowdown in larger apartment and condo developments.

3. Increase in Housing Completions:

   • Total completions rose 7.63% month-over-month and 9.77% year-over-year, meaning more homes are being finished and entering the market.
   • Single-family completions increased 7.09% monthly and 8.87% annually, likely boosting available inventory.
   • Multifamily (5+ units) completions saw a strong 10.14% monthly rise and 11.83% annual increase, signaling a shift in supply from construction to market availability.

4. Increase in Permits Not Yet Started:

   • Units authorized but not started increased 3.59% monthly and 6.41% annually, suggesting that while permits are being issued, builders may be delaying construction.

Implications:

• The data suggests a slowdown in new housing starts and construction, particularly in the single-family sector.
• However, the increase in housing completions means more inventory is becoming available, which could help ease supply constraints.
• The decline in units under construction, especially for multifamily homes, could lead to future shortages if demand remains steady.
• Housing permits have declined, indicating future construction may continue slowing unless market conditions improve.

Key Factors to Watch:

• Interest rates: High mortgage rates are likely discouraging new construction and demand.
• Housing affordability: If prices remain high despite increased completions, demand could weaken further.
• Labor and material costs: Builders may be delaying projects due to cost uncertainties.
• Rental market: The decline in multifamily construction could tighten the rental market in the coming months.

U.S. Housing Market Trends: A Look at Annual Price Changes in February 2025

The Shifting Landscape of U.S. Home Prices: Key Trends and Regional Insights

The U.S. housing market continues to evolve, with varying trends across different cities and regions. The latest S&P CoreLogic Case-Shiller Home Price Index highlights significant contrasts in home price appreciation, with some cities showing robust growth while others experience cooling or even declining values.

Regional Performance: Winners and Losers

Northeast: Leading Growth

New York (7.22%) and Boston (6.34%) are among the top-performing cities in terms of home price growth. The strong demand in these markets is driven by limited housing supply, a resilient job market, and continued demand for urban living. Washington, DC (5.55%) also shows solid growth, likely due to the stability provided by government and public sector employment.

Midwest: Stability and Affordability

Chicago (6.60%) leads the Midwest in home price growth, indicating sustained demand for housing. Detroit (4.76%), Cleveland (5.24%), and Minneapolis (3.20%) continue to see moderate appreciation, as their relative affordability attracts buyers seeking alternatives to high-cost coastal cities.

West Coast: Cooling Market

Traditionally strong markets like San Francisco (2.60%), Seattle (5.61%), and Portland (2.92%) are experiencing slower growth or stagnation. This trend can be attributed to affordability challenges, migration to lower-cost regions, and tech industry slowdowns. Los Angeles (3.57%) and San Diego (5.51%) continue to show moderate appreciation, though at a slower pace than in previous years.

South: A Mixed Picture

Southern cities show mixed results, with Miami (3.28%) and Atlanta (2.35%) still growing but at a slower rate than their pandemic-era peaks. Dallas (1.61%) and Phoenix (2.09%) exhibit signs of cooling, likely due to rising mortgage rates impacting affordability. Tampa (-1.11%) stands out as the only metro experiencing a decline in home prices, suggesting a shift in demand.

Key Economic Correlations

Several economic factors are influencing these trends:

• Interest Rates & Affordability: Higher mortgage rates have softened price growth, especially in high-cost markets.

• Remote Work & Migration: Cities with large remote work populations, such as San Francisco and Seattle, have seen slower appreciation as residents relocate to more affordable areas.

• Regional Job Markets: Cities with strong job growth (New York, Chicago, Boston) are maintaining housing demand, while those reliant on tech (San Francisco, Seattle) are slowing.

• Housing Supply: Limited new construction in cities like New York and Boston is keeping prices high, whereas Sun Belt cities like Phoenix and Dallas may be seeing overbuilding, tempering price growth.

Looking Ahead

The U.S. housing market is experiencing a period of regional divergence. While some cities continue to see strong appreciation, others are cooling due to economic shifts, affordability constraints, and changing migration patterns. Buyers and investors should closely monitor these trends to make informed decisions in this evolving landscape.

Existing Home Sales Data: A Cooling Market Signals a Shift to Buyers in January 2025

 

Posted on February 21, 2025

The latest existing home sales data dropped today, and it’s painting a picture of a housing market that’s hitting the brakes after years of high heat. Released by the National Association of Realtors (NAR) on February 21, 2025, the numbers for January 2025 show declining sales, rising inventory, and a rare dip in prices—hinting at a shift toward a buyer’s market. Let’s break it down and see what it means for homeowners, buyers, and the broader economy.

The Numbers at a Glance

• Sales: Existing home sales fell 4.9% month-over-month to a seasonally adjusted annual rate of 4.08 million units, down from 4.24 million in December 2024. Single-family home sales dropped even more, by 5.15%. Despite the decline, sales are still up 2% from January 2024.


• Inventory: The number of homes for sale rose 3.51% from December, with single-family inventory up 4.04%. Year-over-year, inventory is a whopping 16.83% higher than last January.


• Months Supply: This metric, which measures how long it’d take to sell all listed homes at the current pace, surged 9.38% to a higher level, with single-family homes at 9.68%. Annually, it’s up 16.67%.


• Prices: The median sales price for existing homes slipped 1.68% to a still-elevated figure (specific dollar amounts weren’t in the data, but context suggests around $400K nationally), while single-family homes saw a 1.59% drop. Yet, prices are up 4.83% from a year ago.

What’s Happening?

January’s data reflects contracts signed in late 2024, a time when mortgage rates likely hovered around 6.5-7% (based on recent trends) and holiday distractions slowed activity. The 4.08 million sales rate missed analysts’ expectations of 4.13 million, signaling a weaker-than-anticipated start to 2025. But the story isn’t just about a monthly dip—it’s about a broader shift.

1. Sales Are Cooling Fast
   A nearly 5% drop in sales isn’t shocking for January, a traditionally slow month. But paired with a modest 2% annual gain, it’s clear the frenzied demand of 2021-2023 has faded. High interest rates, affordability challenges, and economic uncertainty might be keeping buyers on the sidelines. The 3-month moving average, up slightly at 0.4%, suggests this downturn is fresh—sales were holding steady until recently.


2. Inventory Is Finally Growing
   After years of scarcity, inventory is making a comeback. The 3.51% monthly increase and 16.83% annual jump show sellers are listing more homes, possibly lured by still-high prices or forced by life changes (think job relocations or downsizing). The 9.38% spike in months supply—meaning homes are sitting longer—reinforces that demand isn’t keeping up.


3. Prices Dip, But Not Collapse
   A 1.68% monthly price drop is notable—it’s not often we see median prices fall. Yet the 4.83% year-over-year gain proves the market hasn’t tanked. Prices are softening as supply rises and buyers hesitate, but they’re still well above last year’s levels, buoyed by long-term appreciation.

What Does It Mean?

This data points to a housing market in transition:

• A Buyer’s Market Emerges: More homes, longer selling times, and falling prices tilt the scales toward buyers. If you’ve been priced out or waiting for leverage, 2025 might be your year.


• Sellers Adjust: Homeowners listing now may face competition and need to price competitively—those sky-high asking prices from 2022 might not fly anymore.


• Economic Signals: Weak sales and a missed forecast could hint at broader consumer caution. If mortgage rates don’t ease soon (say, below 6%), demand might stay sluggish.

The Bigger Picture

The NAR will likely spin this as a seasonal blip, touting the inventory growth as a silver lining. And they’re not wrong—more homes on the market is a relief after years of shortages. But the sharp monthly declines suggest deeper issues: affordability remains a hurdle with rates high and wages stagnant for many. The 3-month stability (0.4% sales growth) offers hope this isn’t a freefall, but January’s numbers could be the start of a correction.

On the flip side, some skeptics might argue the annual gains mask distress—like cash investors propping up sales or regional disparities (think Midwest resilience vs. coastal slowdowns). Without regional data, it’s hard to say, but the national trend leans toward normalization, not collapse.

Looking Ahead

If inventory keeps climbing and rates ease (say, with Fed cuts in 2025), we could see a balanced market by summer. Buyers might find deals, especially if prices dip further. Sellers, though, may need patience—or a willingness to negotiate. For now, January 2025 marks a pivot: the seller’s paradise is fading, and buyers are catching a break.

What do you think—time to buy, sell, or wait? Drop your thoughts below!