Macro Outlook January 2023


The tight labor market points to a late cycle economy with prices increasing 6.3% in the last CPI release. Retail consumption is dropping, household debt is increasing, economic supply chains are seeing less activity, and housing activity is down across the board. Consumer cash levels remain high, money market levels are at record highs, and business investment is still occurring.

Individuals and Households

Consumers hit with higher interest rates on expanding debt levels. Rates on credit cards and personal loans up 17.2% and 10.5% respectively. Credit card debt loads increase 1.59% and all consumer loans up 0.55%.

Real estate backed loans up across the board, leading to lagged mortgage debt service levels being up 2.21%. Residential real estate loans up 1.68%, revolving real estate debt up 1.67%

Monthly housing increases 1.12% but most housing metrics show declines in supply, demand and pricing. Active listings down 8.23%. Existing home sales down 9.26%. Privately owned housing starts down 3.02%. Total residential construction spending down 2.13% from September levels. Case-Shiller National Home Price Index down 0.47%. Average sales price of houses sold down 1.31%, down 2.87% for new houses specifically.

Comparing November initial claims to most recent release, claims have decreased 17.33%. Unemployment levels declined 5.41%. The number of weeks individuals spend unemployed has decreased 8.88%. Job leavers still outpacing job losers, 3.46% growth as a percent of total unemployed vs 1.08% decline for job losers. Average hourly earnings flat, though media real weekly wages up 0.83%.

Demand deposits down 1.17%, deposits held at banks down 0.03% WoW. Personal savings rate up 47.83%. Household asset levels in equities and mutual funds down 4.01%.

Consumer sentiment little changed since October, down 0.33%. Real disposable income up 0.66%. Vehicle sales down 10.67%. Average financing amount for cars up 5.55%. Airline passenger miles up 9.40%. Personal consumption expenditures down 0.22%. Retail sales categories start to trend down in larger swaths. Used cars down 11.53%. Restaurants down 3.26%.


Commercial Paper outstanding increase 1.39%. Financial CP grows at 5.76%, nonfinancial CP up 10.97%. Percent of corporate debt due in one year or less up 3.66%. Commercial real estate loans up 3.23%

Business expectations for sales growth up 10.97%. Manufacturer sales down 0.30% though and total business sales down 0.53%.

Business expectations for employment growth declines 23.21%. Total cash on hand for US corporations down 3.82%. Total non-residential construction spending up 3.53%. Total capex spending 0.41%. Capex expectations improves 6.86%.

Non-farm job openings up 1.20%. Quits up 3.85%. Unfilled job vacancies down 2.42%. Total new manufacturing orders down 1.41%.

Retail inventories down 0.74%. Retail inventories to sales down 0.80%. Manufacturer inventories up 0.38%. Manufacturer inventory to sales ratio up 0.68%. Real private inventories up 0.91%. Cass Freight Shipment index down 5.15%. Transportation services index down 1.82%. Truck tonnage down 3.36%


Cash assets up 3.95% for commercial banks. Residuals improve 3.17%. Commercial and industrial loans up 1.73%, real estate loans up 2.83%. Total bank assets up 0.83%, total liabilities up 0.56%.

Central Bank

FED assets down 1.46% since the end of November. Bulk of that decline is in the 5-10 yr maturity bucket, down 3.09%. M2 velocity shows some life, up 3.03%. Depository reserves up 1.69%. Total monetary base up 1.23%.


US interest payments up 15.84%, which is a 21.8% increases as a percent of GDP. Tax collections decline.

Total government expenditures up 3.67%. Current expenditures up 2.13%. Domestic investment up 1.52%. GDP up 1.83%.

Current account balance up 13.53%. Capital account up 236%. Exports of goods and services on a BoP basis down 5.19%. Imports of goods and services down 1.57%. Trade balance increases 16.06%.

Inputs and Productivity

Commodity PPI down 2.68%. Copper prices up 5.21%, Energy index is down 1.15%. Food index up 2.59% since October.

Labor force participation rate up 0.32%. Multiple jobholders as a percent of employed up 6.25%.

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