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California home sales bear brunt of higher interest rates in October, C.A.R. reports

California home sales bear brunt of higher interest rates in October, C.A.R. reports
PR Newswire
LOS ANGELES, Nov. 16, 2022

Existing, single-family home sales totaled 274,040 in October on a seasonally adjusted annualized rate, down 10.4 percent fr…

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California home sales bear brunt of higher interest rates in October, C.A.R. reports

PR Newswire

LOS ANGELES, Nov. 16, 2022

  • Existing, single-family home sales totaled 274,040 in October on a seasonally adjusted annualized rate, down 10.4 percent from September and down 36.9 percent from October 2021.

  • October's statewide median home price was, $801,190 down 2.5 percent from September and up 0.3 percent from October 2021.

  • Year-to-date statewide home sales were down 18.5 percent in October.

LOS ANGELES, Nov. 16, 2022 /PRNewswire/ -- California's housing market continued shifting in October as the monthly average 30-year fixed rate mortgage hovered near 7 percent and led to the lowest sales level since February 2008 and the largest year-over-year decline since December 2007, outside of the pandemic, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

Infographic:  https://www.car.org/Global/Infographics/2022-10-Sales-and-Price

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 274,040 in October, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2022 if sales maintained the October pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales. October's sales pace was down 10.4 percent on a monthly basis from 305,680 in September and down 36.9 percent from a year ago, when 434,170 homes were sold on an annualized basis.

Home sales have been on a downward trend for 16 straight months on a year-over-year basis. It was the third time in the last four months that sales dropped more than 30 percent from the year-ago level. The monthly 10.4 percent sales decline was worse than the long-run average of +0.5 percent change recorded between a September and an October in the past 43 years. Sales in all price segments continued to drop by 30 percent or more year-over-year, with the $750,000-$999,000 price segment falling the most at 40.8 percent. The high-end market ($1 million-$1,999,000) experienced the smallest sales drop at 34.1 percent.

"While October's sales and price results were weaker than what we've experienced in the past couple of years and could slow further in the upcoming off-season, the market bottom could be in sight," said 2023 C.A.R. President Jennifer Branchini, a Bay Area REALTOR®. "Homes are still selling relatively quickly at 23 days on the market, one in four homes is selling above list price due to limited inventory, and with median price growth remaining positive in four of the five price segments, home prices are holding up reasonably well."

California's median home price declined 2.5 percent in October to $801,190 from the $821,680 recorded in September. The October price was 0.3 percent higher than the $798,440 recorded last October and was the smallest year-over-year price gain in 29 months. October marked the fifth consecutive month with a single-digit annual price increase. With the average 30-year fixed mortgage rate expected to remain above 6.5 percent for the rest of the year, home prices will moderate further in the coming months as affordability remains a challenge.   

"Excluding the three-month pandemic lockdown period in spring 2020, October's sales level was the lowest since February 2008. With pending sales showing a 50 percent drop from a year ago,  we can expect additional tempering in housing demand in the coming months, as we previously forecasted," said C.A.R. Vice President and Chief Economist Jordan Levine. "Home prices will also moderate further over the next several months as interest rates remain elevated in the near term and seasonal factors come into play."

Other key points from C.A.R.'s October 2022 resale housing report include:

  • At the regional level, sales continued to fall sharply from last year, with four of the five major regions falling more than 35 percent from last year. Southern California had the biggest annual drop in sales at 40.8 percent, as every county within the region experienced a sales decline of more than 30 percent in October. The Central Coast (-38.8 percent), the San Francisco Bay Area (-37.3 percent) and the Central Valley (-36.4 percent) also posted sales declines of more than 35 percent from last year, with the declines worsening as borrowing costs continued to climb. The Far North (-19.1 percent) recorded the smallest sales declines of the five major regions, but it also has been dropping by double-digits for five straight months.

  • All but one California county recorded a year-over-year sales decline in October, with 41 of them plunging more than 20 percent from the like period a year ago. Madera (-52.4 percent) and Sutter (-52.4 percent) had the biggest sales drops of all counties, followed by San Bernardino (-47.9 percent), and Napa (-47.5 percent). Mariposa was the only county that did not experience an annual sales decline as sales in the county remained unchanged from last October.

  • More than half of all counties in California maintained positive year-over-year median-price growth in October. Prices were up from last year by double-digits in eight counties in October compared to five counties in the prior month. Santa Barbara (33.2 percent) had the biggest price increase of all counties, due primarily to a change in the mix of sales, followed by Lassen (24.9 percent) and Santa Cruz (19.9 percent). Twenty-two counties recorded a dip in their median price from a year ago, with Tehama dropping the most at -20.6 percent. Three other counties posted price declines in the double-digits, including Amador (-15.2 percent), Mariposa (-12.3 percent), and San Mateo (-10.0 percent).

  • With many potential buyers putting their home buying plans on hold, housing inventory in California rose month-to-month and year-to-year at the start of the fourth quarter. The statewide Unsold Inventory Index (UII) increased to 3.3 months in October 2022 from 2.9 months recorded in the prior month and from 1.8 months recorded in the same period a year ago. The UII increased in all price ranges by 75 percent or more from a year ago, with the $500,000 - $749,000 price range gaining the most (88.2 percent), followed by the $750,000 - $999,000 price range (83.3 percent), the $1 million and up (82.4 percent), and the sub- $500,000 (75.0 percent) segment.

  • Forty-seven of the 51 counties tracked by C.A.R. experienced an increase in active listings from last October, a slight dip from 48 counties recorded in September. Five counties registered a triple-digit, year-over-year gain in October with Yolo (113.0 percent) leading the pack, followed by Merced (106.8 percent), Marin (105.7 percent), Placer (104.0 percent), and Yuba (103.8 percent). Despite an overall improvement in the housing supply conditions, four counties experienced a contraction in active listings from last year. Del Norte continued to register the largest decline in October, with a drop of -48.8 percent year-over-year, followed by Mono (-33.3 percent), Plumas (-16.8 percent) and Siskiyou (-12.3 percent).

  • The median number of days it took to sell a California single-family home was 23 days in October and 11 days in October 2021.

  • C.A.R.'s statewide sales-price-to-list-price ratio* was 97.3 percent in October 2022 and 101.5 percent in October 2021.

  • The statewide average price per square foot** for an existing single-family home was $404, up from $389 in October a year ago.

  • The 30-year, fixed-mortgage interest rate averaged 6.90 percent in October, up from 3.07 percent in October 2021, according to Freddie Mac. The five-year, adjustable mortgage interest rate averaged 5.71 percent, compared to 2.54 percent in October 2021.

Note:  The County MLS median price and sales data in the tables are generated from a survey of more than 90 associations of REALTORS® throughout the state and represent statistics of existing single-family detached homes only. County sales data is not adjusted to account for seasonal factors that can influence home sales. Movements in sales prices should not be interpreted as changes in the cost of a standard home. The median price is where half sold for more and half sold for less; medians are more typical than average prices, which are skewed by a relatively small share of transactions at either the lower end or the upper end. Median prices can be influenced by changes in cost, as well as changes in the characteristics and the size of homes sold. The change in median prices should not be construed as actual price changes in specific homes.

*Sales-to-list-price ratio is an indicator that reflects the negotiation power of home buyers and home sellers under current market conditions. The ratio is calculated by dividing the final sales price of a property by its last list price and is expressed as a percentage. A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, and a ratio below 100 percent indicates that the price sold below the asking price.

**Price per square foot is a measure commonly used by real estate agents and brokers to determine how much a square foot of space a buyer will pay for a property. It is calculated as the sale price of the home divided by the number of finished square feet. C.A.R. currently tracks price-per-square foot statistics for 50 counties.

Leading the way…® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with more than 217,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

 

October 2022 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)



October 2022

Median Sold Price of Existing Single-Family Homes

Sales

State/Region/County

Oct.

2022

Sept.

2022


Oct.

2021


Price
MTM%
Chg

Price
YTY%
Chg

 Sales
MTM%
Chg

 Sales
YTY%
Chg

Calif. Single-family home

$801,190

$821,680


$798,440


-2.5 %

0.3 %

-10.4 %

-36.9 %

Calif. Condo/Townhome

$621,080

$620,000


$605,000


0.2 %

2.7 %

-12.5 %

-40.1 %

Los Angeles Metro Area

$742,570

$750,000


$725,000


-1.0 %

2.4 %

-12.2 %

-40.8 %

Central Coast

$937,500

$920,000


$865,420


1.9 %

8.3 %

-22.3 %

-38.8 %

Central Valley

$450,000

$456,000


$450,000


-1.3 %

0.0 %

-14.8 %

-36.4 %

Far North

$394,000

$380,000


$370,000


3.7 %

6.5 %

-10.0 %

-19.1 %

Inland Empire

$550,000

$562,240


$525,000


-2.2 %

4.8 %

-17.8 %

-44.1 %

San Francisco Bay Area

$1,250,000

$1,256,500


$1,275,000


-0.5 %

-2.0 %

-13.7 %

-37.3 %

Southern California

$773,810

$783,380


$750,000


-1.2 %

3.2 %

-12.9 %

-40.8 %











San Francisco Bay Area










Alameda

$1,250,000

$1,240,000


$1,280,000


0.8 %

-2.3 %

-15.1 %

-35.7 %

Contra Costa

$867,000

$882,000


$900,500


-1.7 %

-3.7 %

-16.0 %

-38.3 %

Marin

$1,662,500

$1,735,000


$1,685,000


-4.2 %

-1.3 %

-0.7 %

-15.6 %

Napa

$975,000

$987,000


$850,000


-1.2 %

14.7 %

-30.3 %

-47.5 %

San Francisco

$1,692,500

$1,650,000


$1,822,000


2.6 %

-7.1 %

7.4 %

-37.5 %

San Mateo

$1,900,000

$1,860,500


$2,110,000


2.1 %

-10.0 %

-17.6 %

-36.2 %

Santa Clara

$1,625,000

$1,700,000


$1,625,000


-4.4 %

0.0 %

-16.7 %

-39.5 %

Solano

$565,000

$587,000


$580,000


-3.7 %

-2.6 %

-18.6 %

-41.4 %

Sonoma

$797,570

$810,000


$750,000


-1.5 %

6.3 %

-3.0 %

-37.5 %

Southern California










Los Angeles

$854,280

$891,770


$848,970


-4.2 %

0.6 %

-6.1 %

-39.8 %

Orange

$1,165,000

$1,200,000


$1,120,000


-2.9 %

4.0 %

-17.6 %

-38.5 %

Riverside

$599,990

$600,000


$580,000


0.0 %

3.4 %

-19.2 %

-41.5 %

San Bernardino

$465,000

$480,000


$445,000


-3.1 %

4.5 %

-15.4 %

-47.9 %

San Diego

$860,000

$899,000


$850,000


-4.3 %

1.2 %

-15.6 %

-40.7 %

Ventura

$855,000

$850,000


$830,000


0.6 %

3.0 %

-1.5 %

-33.5 %

Central Coast










Monterey

$865,000

$822,500


$865,250


5.2 %

0.0 %

-20.5 %

-34.3 %

San Luis Obispo

$815,000

$875,000


$800,000


-6.9 %

1.9 %

-24.2 %

-39.2 %

Santa Barbara

$1,115,000

$905,000


$837,000


23.2 %

33.2 %

-21.4 %

-43.8 %

Santa Cruz

$1,362,000

$1,217,500


$1,136,000


11.9 %

19.9 %

-23.1 %

-35.9 %

Central Valley










Fresno

$400,000

$415,000


$385,000


-3.6 %

3.9 %

-22.0 %

-32.1 %

Glenn

$310,000

$327,000


$307,000


-5.2 %

1.0 %

-38.9 %

-15.4 %

Kern

$379,980

$365,000


$340,000


4.1 %

11.8 %

-11.6 %

-31.4 %

Kings

$328,000

$342,500


$325,000


-4.2 %

0.9 %

-6.1 %

-1.3 %

Madera

$400,000

$410,000


$394,880


-2.4 %

1.3 %

-15.4 %

-52.4 %

Merced

$380,000

$377,000


$370,000


0.8 %

2.7 %

-5.5 %

-35.8 %

Placer

$645,000

$645,000


$649,000


0.0 %

-0.6 %

-8.5 %

-27.1 %

Sacramento

$512,500

$520,000


$510,000


-1.4 %

0.5 %

-19.2 %

-43.9 %

San Benito

$761,000

$750,000


$768,000


1.5 %

-0.9 %

-14.0 %

-39.3 %

San Joaquin

$497,890

$515,000


$500,000


-3.3 %

-0.4 %

-20.9 %

-45.4 %

Stanislaus

$430,000

$445,000


$440,000


-3.4 %

-2.3 %

10.0 %

-24.5 %

Tulare

$369,000

$335,000


$325,000


10.1 %

13.5 %

-20.4 %

-33.4 %

Far North










Butte

$438,750

$429,780


$460,000


2.1 %

-4.6 %

-8.3 %

-14.7 %

Lassen

$290,500

$269,000


$232,500


8.0 %

24.9 %

-34.8 %

-46.4 %

Plumas

$442,500

$475,000


$470,000


-6.8 %

-5.9 %

-2.9 %

-8.1 %

Shasta

$382,250

$375,000


$359,500


1.9 %

6.3 %

-9.6 %

-23.8 %

Siskiyou

$326,750

$352,450


$329,500


-7.3 %

-0.8 %

-9.5 %

-5.0 %

Tehama

$272,500

$302,000


$343,000


-9.8 %

-20.6 %

-9.7 %

-3.4 %

Other Calif. Counties










Amador

$365,000

$400,000


$430,640


-8.8 %

-15.2 %

-11.8 %

-10.0 %

Calaveras

$414,500

$450,000


$432,000


-7.9 %

-4.1 %

-22.8 %

-40.8 %

Del Norte

$389,900

$418,750


$360,100


-6.9 %

8.3 %

18.8 %

-32.1 %

El Dorado

$684,000

$647,450


$615,000


5.6 %

11.2 %

-19.4 %

-23.2 %

Humboldt

$439,500

$460,000


$420,000


-4.5 %

4.6 %

13.0 %

-16.8 %

Lake

$353,000

$339,500


$345,000


4.0 %

2.3 %

12.5 %

-23.2 %

Mariposa

$399,000

$342,200


$455,000


16.6 %

-12.3 %

6.7 %

0.0 %

Mendocino

$530,000

$535,000


$534,000


-0.9 %

-0.7 %

-12.8 %

-25.5 %

Mono

$960,000

$1,105,000


$840,000


-13.1 %

14.3 %

-8.3 %

-31.3 %

Nevada

$532,500

$562,500


$525,000


-5.3 %

1.4 %

-30.1 %

-24.0 %

Sutter

$412,500

$437,850


$422,550


-5.8 %

-2.4 %

-25.9 %

-52.4 %

Tuolumne

$368,260

$399,500


$385,000


-7.8 %

-4.3 %

-17.0 %

-21.2 %

Yolo

$595,000

$635,000


$582,500


-6.3 %

2.1 %

-4.0 %

-30.7 %

Yuba

$405,000

$435,000


$413,000


-6.9 %

-1.9 %

17.5 %

-24.5 %


r = revised

 

October 2022 County Unsold Inventory and Days on Market
(Regional and condo sales data not seasonally adjusted)


October 2022

Unsold Inventory Index

Median Time on Market

State/Region/County

Oct.

2022

Sept.

2022


Oct.

2021


Oct.

2022

Sept.

2022


Oct.

2021


Calif. Single-family home

3.3

2.9


1.8


23.0

22.0


11.0


Calif. Condo/Townhome

2.8

2.6


1.6


21.0

21.0


11.0


Los Angeles Metro Area

3.7

3.1


1.9


24.0

23.0


11.0


Central Coast

3.0

2.5


1.8


20.0

19.0


10.0


Central Valley

3.2

2.9


1.8


21.0

20.0


9.0


Far North

4.2

4.1


3.2


35.0

38.0


20.0


Inland Empire

3.9

3.4


2.0


27.0

25.0


12.0


San Francisco Bay Area

2.4

2.3


1.4


20.0

21.0


12.0


Southern California

3.6

3.0


1.8


22.0

22.0


11.0













San Francisco Bay Area











Alameda

2.1

2.0


1.3


16.0

17.0


11.0


Contra Costa

2.5

2.3


1.4


23.0

21.0


10.0


Marin

2.3

2.6


1.3


22.0

22.0


21.0


Napa

5.4

4.0


2.8


35.0

30.0


34.0


San Francisco

2.8

3.2


1.6


13.5

17.0


13.0


San Mateo

2.3

2.1


1.5


13.0

17.5


9.0


Santa Clara

1.8

1.8


1.1


13.0

16.0


8.0


Solano

2.9

2.5


1.4


48.0

36.0


28.0


Sonoma

2.8

2.9


1.8


36.0

36.0


34.0


Southern California











Los Angeles

4.1

3.2


2.0


20.0

21.0


10.0


Orange

2.8

2.5


1.5


25.0

21.0


9.0


Riverside

3.9

3.3


2.0


28.0

26.0


13.0


San Bernardino

4.0

3.6


2.1


27.0

24.0


12.0


San Diego

3.0

2.7


1.5


18.0

19.0


9.0


Ventura

2.4

2.7


1.8


33.5

31.0


24.0


Central Coast











Monterey

3.2

2.8


2.2


25.0

17.0


11.5


San Luis Obispo

3.0

2.4


1.7


17.0

21.0


8.0


Santa Barbara

2.8

2.4


1.4


18.0

20.5


10.0


Santa Cruz

3.2

2.5


1.8


21.5

19.0


12.0


Central Valley











Fresno

3.4

2.8


1.9


18.0

17.0


7.0


Glenn

4.4

2.9


3.7


48.0

37.5


13.0


Kern

3.1

2.8


1.8


21.0

23.0


10.0


Kings

2.8

2.6


2.3


14.0

19.5


7.0


Madera

5.3

4.6


2.1


23.0

21.0


12.0


Merced

3.5

3.5


1.7


39.0

24.0


10.0


Placer

3.1

3.1


1.7


22.0

23.0


8.0


Sacramento

2.9

2.6


1.4


21.0

18.0


9.0


San Benito

3.8

3.4


2.1


35.0

34.0


8.0


San Joaquin

3.3

2.9


1.7


31.0

23.0


11.0


Stanislaus

2.5

3.1


1.9


22.0

21.0


9.0


Tulare

3.7

2.9


2.1


13.0

14.0


7.0


Far North











Butte

3.4

3.3


2.4


20.0

20.5


10.0


Lassen

8.1

5.3


4.2


63.0

90.0


98.0


Plumas

4.1

4.8


4.5


79.0

97.0


75.0


Shasta

3.9

3.7


2.7


27.5

31.0


14.0


Siskiyou

4.6

4.9


5.4


56.0

55.0


18.5


Tehama

6.7

6.3


5.0


70.0

52.0


41.0


Other Calif. Counties











Amador

4.4

4.4


3.6


17.0

42.0


26.5


Calaveras

4.6

3.7


2.8


59.0

69.0


54.0


Del Norte

3.3

5.1


3.2


72.0

81.5


90.0


El Dorado

3.5

3.1


2.7


34.0

43.5


17.0


Humboldt

4.0

4.7


2.2


15.5

18.5


10.0


Lake

6.0

7.3


4.5


37.0

32.0


26.0


Mariposa

5.2

5.3


5.1


38.0

23.0


26.0


Mendocino

7.1

6.9


4.3


55.0

65.0


41.0


Mono

3.4

4.1


3.4


111.0

80.0


107.0


Nevada

4.0

3.2


2.9


39.0

46.0


11.0


Sutter

4.5

3.3


1.8


22.0

27.5


10.5


Tuolumne

3.9

3.3


3.1


71.5

63.0


15.0


Yolo

2.2

2.6


1.2


19.0

24.0


9.0


Yuba

3.6

4.6


1.9


27.0

31.0


10.5



r = revised

 

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SOURCE CALIFORNIA ASSOCIATION OF REALTORS

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Wendy’s teases new $3 offer for upcoming holiday

The Daylight Savings Time promotion slashes prices on breakfast.

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3 hours ago

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March 8, 2024

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Daylight Savings Time, or the practice of advancing clocks an hour in the spring to maximize natural daylight, is a controversial practice because of the way it leaves many feeling off-sync and tired on the second Sunday in March when the change is made and one has one less hour to sleep in.

Despite annual "Abolish Daylight Savings Time" think pieces and online arguments that crop up with unwavering regularity, Daylight Savings in North America begins on March 10 this year.

Related: Coca-Cola has a new soda for Diet Coke fans

Tapping into some people's very vocal dislike of Daylight Savings Time, fast-food chain Wendy's  (WEN)  is launching a daylight savings promotion that is jokingly designed to make losing an hour of sleep less painful and encourage fans to order breakfast anyway.

Wendy's has recently made a big push to expand its breakfast menu.

Image source: Wendy's.

Promotion wants you to compensate for lost sleep with cheaper breakfast

As it is also meant to drive traffic to the Wendy's app, the promotion allows anyone who makes a purchase of $3 or more through the platform to get a free hot coffee, cold coffee or Frosty Cream Cold Brew.

More Food + Dining:

Available during the Wendy's breakfast hours of 6 a.m. and 10:30 a.m. (which, naturally, will feel even earlier due to Daylight Savings), the deal also allows customers to buy any of its breakfast sandwiches for $3. Items like the Sausage, Egg and Cheese Biscuit, Breakfast Baconator and Maple Bacon Chicken Croissant normally range in price between $4.50 and $7.

The choice of the latter is quite wide since, in the years following the pandemic, Wendy's has made a concerted effort to expand its breakfast menu with a range of new sandwiches with egg in them and sweet items such as the French Toast Sticks. The goal was both to stand out from competitors with a wider breakfast menu and increase traffic to its stores during early-morning hours.

Wendy's deal comes after controversy over 'dynamic pricing'

But last month, the chain known for the square shape of its burger patties ignited controversy after saying that it wanted to introduce "dynamic pricing" in which the cost of many of the items on its menu will vary depending on the time of day. In an earnings call, chief executive Kirk Tanner said that electronic billboards would allow restaurants to display various deals and promotions during slower times in the early morning and late at night.

Outcry was swift and Wendy's ended up walking back its plans with words that they were "misconstrued" as an intent to surge prices during its most popular periods.

While the company issued a statement saying that any changes were meant as "discounts and value offers" during quiet periods rather than raised prices during busy ones, the reputational damage was already done since many saw the clarification as another way to obfuscate its pricing model.

"We said these menuboards would give us more flexibility to change the display of featured items," Wendy's said in its statement. "This was misconstrued in some media reports as an intent to raise prices when demand is highest at our restaurants."

The Daylight Savings Time promotion, in turn, is also a way to demonstrate the kinds of deals Wendy's wants to promote in its stores without putting up full-sized advertising or posters for what is only relevant for a few days.

Related: Veteran fund manager picks favorite stocks for 2024

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Inside The Most Ridiculous Jobs Report In Recent History: Record 1.2 Million Immigrant Jobs Added In One Month

Inside The Most Ridiculous Jobs Report In Recent History: Record 1.2 Million Immigrant Jobs Added In One Month

Last month we though that the…

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March 8, 2024

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Inside The Most Ridiculous Jobs Report In Recent History: Record 1.2 Million Immigrant Jobs Added In One Month

Last month we though that the January jobs report was the "most ridiculous in recent history" but, boy, were we wrong because this morning the Biden department of goalseeked propaganda (aka BLS) published the February jobs report, and holy crap was that something else. Even Goebbels would blush. 

What happened? Let's take a closer look.

On the surface, it was (almost) another blockbuster jobs report, certainly one which nobody expected, or rather just one bank out of 76 expected. Starting at the top, the BLS reported that in February the US unexpectedly added 275K jobs, with just one research analyst (from Dai-Ichi Research) expecting a higher number.

Some context: after last month's record 4-sigma beat, today's print was "only" 3 sigma higher than estimates. Needless to say, two multiple sigma beats in a row used to only happen in the USSR... and now in the US, apparently.

Before we go any further, a quick note on what last month we said was "the most ridiculous jobs report in recent history": it appears the BLS read our comments and decided to stop beclowing itself. It did that by slashing last month's ridiculous print by over a third, and revising what was originally reported as a massive 353K beat to just 229K,  a 124K revision, which was the biggest one-month negative revision in two years!

Of course, that does not mean that this month's jobs print won't be revised lower: it will be, and not just that month but every other month until the November election because that's the only tool left in the Biden admin's box: pretend the economic and jobs are strong, then revise them sharply lower the next month, something we pointed out first last summer and which has not failed to disappoint once.

To be fair, not every aspect of the jobs report was stellar (after all, the BLS had to give it some vague credibility). Take the unemployment rate, after flatlining between 3.4% and 3.8% for two years - and thus denying expectations from Sahm's Rule that a recession may have already started - in February the unemployment rate unexpectedly jumped to 3.9%, the highest since February 2022 (with Black unemployment spiking by 0.3% to 5.6%, an indicator which the Biden admin will quickly slam as widespread economic racism or something).

And then there were average hourly earnings, which after surging 0.6% MoM in January (since revised to 0.5%) and spooking markets that wage growth is so hot, the Fed will have no choice but to delay cuts, in February the number tumbled to just 0.1%, the lowest in two years...

... for one simple reason: last month's average wage surge had nothing to do with actual wages, and everything to do with the BLS estimate of hours worked (which is the denominator in the average wage calculation) which last month tumbled to just 34.1 (we were led to believe) the lowest since the covid pandemic...

... but has since been revised higher while the February print rose even more, to 34.3, hence why the latest average wage data was once again a product not of wages going up, but of how long Americans worked in any weekly period, in this case higher from 34.1 to 34.3, an increase which has a major impact on the average calculation.

While the above data points were examples of some latent weakness in the latest report, perhaps meant to give it a sheen of veracity, it was everything else in the report that was a problem starting with the BLS's latest choice of seasonal adjustments (after last month's wholesale revision), which have gone from merely laughable to full clownshow, as the following comparison between the monthly change in BLS and ADP payrolls shows. The trend is clear: the Biden admin numbers are now clearly rising even as the impartial ADP (which directly logs employment numbers at the company level and is far more accurate), shows an accelerating slowdown.

But it's more than just the Biden admin hanging its "success" on seasonal adjustments: when one digs deeper inside the jobs report, all sorts of ugly things emerge... such as the growing unprecedented divergence between the Establishment (payrolls) survey and much more accurate Household (actual employment) survey. To wit, while in January the BLS claims 275K payrolls were added, the Household survey found that the number of actually employed workers dropped for the third straight month (and 4 in the past 5), this time by 184K (from 161.152K to 160.968K).

This means that while the Payrolls series hits new all time highs every month since December 2020 (when according to the BLS the US had its last month of payrolls losses), the level of Employment has not budged in the past year. Worse, as shown in the chart below, such a gaping divergence has opened between the two series in the past 4 years, that the number of Employed workers would need to soar by 9 million (!) to catch up to what Payrolls claims is the employment situation.

There's more: shifting from a quantitative to a qualitative assessment, reveals just how ugly the composition of "new jobs" has been. Consider this: the BLS reports that in February 2024, the US had 132.9 million full-time jobs and 27.9 million part-time jobs. Well, that's great... until you look back one year and find that in February 2023 the US had 133.2 million full-time jobs, or more than it does one year later! And yes, all the job growth since then has been in part-time jobs, which have increased by 921K since February 2023 (from 27.020 million to 27.941 million).

Here is a summary of the labor composition in the past year: all the new jobs have been part-time jobs!

But wait there's even more, because now that the primary season is over and we enter the heart of election season and political talking points will be thrown around left and right, especially in the context of the immigration crisis created intentionally by the Biden administration which is hoping to import millions of new Democratic voters (maybe the US can hold the presidential election in Honduras or Guatemala, after all it is their citizens that will be illegally casting the key votes in November), what we find is that in February, the number of native-born workers tumbled again, sliding by a massive 560K to just 129.807 million. Add to this the December data, and we get a near-record 2.4 million plunge in native-born workers in just the past 3 months (only the covid crash was worse)!

The offset? A record 1.2 million foreign-born (read immigrants, both legal and illegal but mostly illegal) workers added in February!

Said otherwise, not only has all job creation in the past 6 years has been exclusively for foreign-born workers...

Source: St Louis Fed FRED Native Born and Foreign Born

... but there has been zero job-creation for native born workers since June 2018!

This is a huge issue - especially at a time of an illegal alien flood at the southwest border...

... and is about to become a huge political scandal, because once the inevitable recession finally hits, there will be millions of furious unemployed Americans demanding a more accurate explanation for what happened - i.e., the illegal immigration floodgates that were opened by the Biden admin.

Which is also why Biden's handlers will do everything in their power to insure there is no official recession before November... and why after the election is over, all economic hell will finally break loose. Until then, however, expect the jobs numbers to get even more ridiculous.

Tyler Durden Fri, 03/08/2024 - 13:30

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Shipping company files surprise Chapter 7 bankruptcy, liquidation

While demand for trucking has increased, so have costs and competition, which have forced a number of players to close.

Published

5 hours ago

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March 8, 2024

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The U.S. economy is built on trucks.

As a nation we have relatively limited train assets, and while in recent years planes have played an expanded role in moving goods, trucks still represent the backbone of how everything — food, gasoline, commodities, and pretty much anything else — moves around the country.

Related: Fast-food chain closes more stores after Chapter 11 bankruptcy

"Trucks moved 61.1% of the tonnage and 64.9% of the value of these shipments. The average shipment by truck was 63 miles compared to an average of 640 miles by rail," according to the U.S. Bureau of Transportation Statistics 2023 numbers.

But running a trucking company has been tricky because the largest players have economies of scale that smaller operators don't. That puts any trucking company that's not a massive player very sensitive to increases in gas prices or drops in freight rates.

And that in turn has led a number of trucking companies, including Yellow Freight, the third-largest less-than-truckload operator; J.J. & Sons Logistics, Meadow Lark, and Boateng Logistics, to close while freight brokerage Convoy shut down in October.

Aside from Convoy, none of these brands are household names. but with the demand for trucking increasing, every company that goes out of business puts more pressure on those that remain, which contributes to increased prices.

Demand for trucking has continued to increase.

Image source: Shutterstock

Another freight company closes and plans to liquidate

Not every bankruptcy filing explains why a company has gone out of business. In the trucking industry, multiple recent Chapter 7 bankruptcies have been tied to lawsuits that pushed otherwise successful companies into insolvency.

In the case of TBL Logistics, a Virginia-based national freight company, its Feb. 29 bankruptcy filing in U.S. Bankruptcy Court for the Western District of Virginia appears to be death by too much debt.

"In its filing, TBL Logistics listed its assets and liabilities as between $1 million and $10 million. The company stated that it has up to 49 creditors and maintains that no funds will be available for unsecured creditors once it pays administrative fees," Freightwaves reported.

The company's owners, Christopher and Melinda Bradner, did not respond to the website's request for comment.

Before it closed, TBL Logistics specialized in refrigerated and oversized loads. The company described its business on its website.

"TBL Logistics is a non-asset-based third-party logistics freight broker company providing reliable and efficient transportation solutions, management, and storage for businesses of all sizes. With our extensive network of carriers and industry expertise, we streamline the shipping process, ensuring your goods reach their destination safely and on time."

The world has a truck-driver shortage

The covid pandemic forced companies to consider their supply chain in ways they never had to before. Increased demand showed the weakness in the trucking industry and drew attention to how difficult life for truck drivers can be.

That was an issue HBO's John Oliver highlighted on his "Last Week Tonight" show in October 2022. In the episode, the host suggested that the U.S. would basically start to starve if the trucking industry shut down for three days.

"Sorry, three days, every produce department in America would go from a fully stocked market to an all-you-can-eat raccoon buffet," he said. "So it’s no wonder trucking’s a huge industry, with more than 3.5 million people in America working as drivers, from port truckers who bring goods off ships to railyards and warehouses, to long-haul truckers who move them across the country, to 'last-mile' drivers, who take care of local delivery." 

The show highlighted how many truck drivers face low pay, difficult working conditions and, in many cases, crushing debt.

"Hundreds of thousands of people become truck drivers every year. But hundreds of thousands also quit. Job turnover for truckers averages over 100%, and at some companies it’s as high as 300%, meaning they’re hiring three people for a single job over the course of a year. And when a field this important has a level of job satisfaction that low, it sure seems like there’s a huge problem," Oliver shared.

The truck-driver shortage is not just a U.S. problem; it's a global issue, according to IRU.org.

"IRU’s 2023 driver shortage report has found that over three million truck driver jobs are unfilled, or 7% of total positions, in 36 countries studied," the global transportation trade association reported. 

"With the huge gap between young and old drivers growing, it will get much worse over the next five years without significant action."

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