Macro Outlook February 2023


Another month of inflation watching in the books. The housing market downturn still seems to be picking up speed. Job markets remain surprisingly strong, however, with another month of decreasing job losers and increasing job leavers. The consumer is preparing for recession regardless, increasing their savings rate and cutting spending.

Individuals and Households

Consumer credit continues to expand. Short term credit up 1.34%, all consumer loans up 0.81%. Lagging delinquency rates data shows an 8% uptick in delinquencies for both of these categories.

Residential real estate loans are up nearly 1%, while revolving home loan levels remain flat.

Real estate slowdown continues. Supply of houses down 12.22%, and active listings down 16.2%. Privately owned housing starts down 5.28%. Rental vacancy rate down 3.33%. Total residential construction spending down 2.33%. The average sales price of a new home drops 10.22%.

Average weeks unemployed up 4.62%. Quits up 6.25% and layoffs down 4.57%. Private average hourly earnings are up 0.64%.

Demand deposits up 0.83%, but total deposits drop 0.53%. Personal savings rates rise 38.24%.

Consumer sentiment improves 8.71%. Disposable income up 2.33% and urban CPI up 0.81%. Total vehicle sales up 11.50% while air revenue miles drop 2.64%. PCE up 1.77%. Retail sales tend to trend lower, but restaurant spending rises 8%.


Commercial paper outstanding drops 7.39%. Financial paper and nonfinancial papers both drop around 7% as well. Commercial real estate loans are up 1.05%. Lagged data shows that delinquency on business loans up 7.21%.

Sales expectations drop 15.16%. Manufacturer sales drop 0.97% and total business sales drop 1.04%.

Total construction spending up 1%, nonresidential construction rises 4.15%.

Total nonfarm job openings up 5.30%. Total manufacturing new orders up 1.69%, but orders for durable goods drop 5.10%.

Business inventories are growing. Retailers inventories are up 0.54%, and inventory to sales ratios are up 1.61%. Similarly manufacturer inventories are up 0.39% with inventory to sales increasing 1.36%. Transportation index down 1.37%, and Cass Freight Shipments index shows a 3.19% decrease.


Bank cash assets decline 5.77% taking the residual down 0.26%. Commercial and industrial loans are up 0.33%, while real estate loans at commercial banks are up 0.60%. Total bank assets down 0.46%. Liabilities also decline 0.46%. Lagged delinquency rate data shows a 0.83% drop in late payments.

Central Bank

FED assets decrease 0.83%. Short term securities reduce by 1.99% while the 10+ yr bucket increased 0.91%. 30 year breakeven inflation expectations up 1.33%. Depository reserves and the total monetary base decrease 1.42%.


US trade balance on goods and services goes down another 9.60%.

Inputs and Productivity

Commodity PPI up 0.71%, energy index down 13.08%. Gas prices in the US down 2.14% as well.

Labor force participation rate up 0.16%.

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