Macro Outlook November 2022


Markets continue to look for daily stimulus amidst a macroeconomic environment in the process of regime shift. Pivot narratives live and die by month to month data releases despite the ability of underlying economic actors to grind on and on simply from the momentum generated by such massive systems. Recessions are seemingly universally agreed upon for the 2023 year, however risk markets have found ways to squeeze higher to close out November. What is clear is that there is still money on the sidelines, and if a bottom is only one or two moves down lower, than those with significant allocations to make may feel some sense of urgency. This could be a Wall St. vs Main St. dichotomy, as market practitioners believe to have already digested the turmoil that the consumer class will feel next year. And this reality still seems to be far removed. Certainly consumer debt and consumption levels continues to grow. Americans are borrowing and spending. There may be some foreshadowing of pain ahead in this month’s releases, in the higher loan delinquency rates across all customer segments. But while personal savings rates have cratered to below pre-pandemic highs, demand deposits remain clearly elevated. Market stress can be most felt in the housing market for individuals, as prices are now certainly trending lower. Construction tends to remain strong though, as new houses can still fetch higher prices, and the overall market still seems to have a shortage of homes. Employment numbers also begin to show cracks, as layoffs start to outweigh quits, causing great resignation headlines to fade. However on a relative 4% is full employment scale, the US is still running hot, and this causes problems for policies makers who want to see a 2-3% rate of inflation. Most challenging will be how they resolve the demographic issues faced in much of the developed world, where labor force participation still trends to lower and lower levels. These large scale forces that shift generationally are the variables which make policy making on the basis of history fallible.

Individuals and Households

Consumer loans are still increasing, with credit card and revolving loans outstanding up 0.85%, while total loans are up 0.42%. However, delinquencies on these loans are sharply up QoQ, with credit card delinquencies up 14.92% and total consumer loan delinquencies up 12.28%.

Residential mortgage levels continue to increase, up 0.75% WoW, while revolving home equity loans down 0.17%. QoQ mortgage delinquencies decrease, down 5.10%.

Housing data continues to a slowdown in home purchasing. Monthly supply of houses down 3.26% indicating less homes coming to market. Active listings up 2.63% as stock sits longer. Existing home sales down 5.94%. Housing starts down 0.97%. Total residential construction spending down 2.76% as well. Average sales price for new homes goes up 5.08%, but Case-Shiller Home Price indices all lower. CS 20-City Composite down 1.27% and Seattle index sees a nearly 2% drop. Homeownership rates still increased a lagged QoQ basis, up 0.30%, and rental vacancies up 7.14%.

Labor market conditions remain good on a historical basis, but latest releases show a worsening situation. Unemployment rises 5.71%, and average weeks unemployed increases 5.94%. Job leavers drop 12.58%, while job losers increase 5.92%. Average earnings up 1.11% though.

Consumer demand deposits drop 1.02%, but total deposits at commercial banks up 0.10%. Overall though, the average cash buffer of individuals is definitely lower, with personal savings rates dropping another 25.81% this release.

Consumers feel somewhat more optimistic, Michigan survey comes up 2.22% higher. Real disposable income though, is down 0.11%. PCE measures increase as consumers are still spending at a higher clip. Total PCE increases nearly 1% MoM. Total vehicle sales up 10%, air revenue passenger miles up 2.22%.


Short term debt issuance drops. Total commercial paper outstanding down 0.55%, financial cp outstanding down 0.86%, and nonfinancial cp down 4.49%. Commercial real estate loans gains 1.04%. Delinquencies on business debts up 7.77%.

Corporate profits down down 4.90%. Sales revenue growth expectations more optimistic, up 5.07%. Manufacturer sales up 0.42% and total business sales up 0.26%.

Employment growth expectations down almost 25%. Total non-residential construction spending up 4.56%. Total construction in the us up 0.77%. Capex spending expectations drops to -14.97.

Despite cooling economic climate job openings still increased 2.80%, but unfilled vacancies drop 4.64%. Quits drop 3.70%. Business applications down 30% in one week. Total manufacturing new orders up 0.48%.

Retail inventories up 0.53%, manufacturer inventories up 0.18%. Retail inventory to sales up 0.81%. Manufacturers to sales ratio unchanged. Auto inventories to sales down 18.85%. Cass freight shipments index down 1.37%. Total transportation services up 1.28%. Truck tonnage is up 1.88%.


Bank cash assets up 1.64%. Commercial and industrial loans are up 1.19%, real estate loans up 0.78%. Total assets of commercial banks are up 1.18% overall, while total liabilities have increased 1.37%. Residuals have declined 1.81%. Delinquency rate on all loans up 0.84%.

Central Bank

Central bank securities held outright decline 1.65% MoM. 1 to 5 year maturity assets decline 0.91%, while 5 to 10 year maturity assets down 4.34%. Assets held with maturities over 10 years increases 0.64%. Total reserves of depository institutions down 2.42%. Total monetary base down 1.32%.


Total public debt as a percent of GDP is down by 2.03%. Federal debt held by foreign investors down 1.80%. Federal budget deficit reduces as current tax receipts gain 7.82%.

Exports of goods and services on BoP basis drops 0.35%. Exports of goods drop 1.28%, but exports of services up 1.86%. Trade balance deficit increases 8.73%.

Inputs and Productivity

PPI by commodity price is down 1.52%. Price of copper down 4.25% MoM. Price of energy index down by nearly 31%. Price of Brent Crude is down 4.02%. All formulations regular gas prices down 6.24%. Price of food index down 3.13%.

Employment levels in the 25-54 age bracket declines 0.60%, and declines 0.31% in the 55 and over age bracket. Labor force participation rate drops 0.32%. Participation among men declines 0.15%, while women see a 0.53% drop in participation. The number men looking for a job but not participating drops 2.17%, while the number of women not in labor force but looking drops by 12.63%.

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