Macro Outlook October 2022


Borrowing rates are sharply higher, but consumer credit continues to expand. The housing market continues to be the strongest real economy sign of an impending downturn as housing inventories rise and prices decline. Metrics of supply chain activity down as well. Initial claims are starting to trend higher, while net unemployment has decreased again. Consumer spending also remains robust, and PCE levels once again beat expectations.

Individuals and Households

Consumer borrowing rates increase in 3rd quarter, with credit card rates up 7.5% and personal loan rates up 16.4%. Revolving credit levels still increase WoW, up 1.4%. Total consumer loans outstanding increase MoM, up nearly 1%. Total real estate loans up 0.6%, while revolving home loans are up nearly 1% as well.

Supply of housing increases in September, up 13.6%. Active listings decrease by 6%. Existing home sales down 1.9%. Privately owned housing units started down 8.6%, while total residential construction spending down a more modest 0.8%. Cash-Shiller housing price indices see regression. 20-city composite down 1.6% while National Home Price index down 1.2%. LA sees a 2.2% decline while NYC drops 0.5%. Average sales prices for new houses sold down 0.8%.

Initial claims higher again up 12.4%. Unemployment levels still down in third quarter dropping 5.4%. Average weeks unemployed still down 9.4%. Job leavers continue to outpace job losers, with leavers up 4.6% while job losers down just about 5%. Average hourly earnings see some more growth up 0.3%. Median weekly real earnings up 0.8%.

Consumer savings decline across the board. Demand deposits down 1%, and total deposits at banks drop 1.3%. Personal savings drops a further 11.4%.

Consumers continue to generally spend. Michigan Consumer Sentiment Index improves slightly up 0.7%. Real disposable situation improves up 0.3%. Urban CPI index up 0.4%. Total vehicle sales up 2.7%. Personal consumption expenditures up 0.8%, and up across all the categories as well. Retail sales generally up, though restaurants and gasoline stations down 1.5% and 5% respectively.


Commercial paper outstanding up 5.7%. Business sales growth expectations down 4.6%. Manufacturer sales and total sales up 0.4% and 0.2% respectively. Employment growth expectations up nearly 5%, while total nonresidential construction spending in the US up 1.4%. CAPEX spending expectations down 40%.

Total nonfarm openings down 11%. Quits even. Business applications in the US down 3%. Total manufacturing new orders down 0.2%, durable goods orders up however 0.8%.

Retail inventories up 1.2%. Retail inventories to sales ratio also up 0.8%. Manufacturer inventories are down 0.2%, and ratio is down 0.7%. Auto inventories to sales ratios are up 27%. Cass Freight Index for shipments is down 2.9%, and the total transportation index is down 0.4%. Truck tonnage is also down 2.5%.


Bank cash assets down 0.2%. Residual assets are 2.2%. Commercial and industrial loans are up 0.5%. Total assets at commercial banks are down 0.26%. Total liabilities are down 0.26%.

Central Bank

Securities held outright by the FED down 1.1%. Declines the greatest at the on the short end of the curve. Total reserves down 5.3%. M2 velocity slightly increases up 3.7%. Total monetary base down 3%.


Federal government expenditures on interest payments up 23%. Federal deficit basically doubles. Gross domestic investment down 0.3%. Trade balance down 4.6% on balance of payments basis.

Inputs and Productivity

Commodity PPI gains 0.1%. Regular gas prices up 1.6%. WTI crude up 11.6%.

Labor force participation rate drops 0.2% on the strength of a 0.5% decline in female labor force participation. Males see a 0.4 increase in participation rates. Employment level and civilian labor force levels do grow a bit in the 55+ age group, but the trend remains to be generally declining.

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