What I’m Reading
No Shelter From the Storm: The for sale housing market has slowed down substantially as rates have soared. However, that is putting pressure on rental occupancy and rates as tenants who would buy are forced to remain in place due to affordability issues. This is putting upward pressure on CPI since rental rates factor into the official calculation more than rising housing prices. NY Times This should come as no surprise to anyone who has been paying attention to the market in recent months. Kneecapping housing at a time when rental vacancy is at an all time low will always lead to a tighter market – at least up until we hit an employment recession.
Walk Out: Some California truckers who move containers in and out of the marine terminals at the ports of Los Angeles and Long Beach say they plan to participate in a work stoppage Wednesday to protest a controversial state law, AB5, that seeks to limit the use of independent contractors and largely classify them as employee drivers. Freight Waves
Zero Sum Game: States are doing battle for workers as shortages persist thanks to growth in manufacturing, the Great Resignation and bad demographics. Some are now offering cash and incentives as a carrot for workers who relocate. CNBC
Coming in Hot: CPI came in at a scorching 9.1% last month, well above the consensus 8.8% expectations. Perhaps most concerning was the acceleration in core CPI on a month-over-month basis. CNBC Right now inflationary forces are winning out in the official reports. However, there are also substantial deflationary forces beginning to weigh on the market – ranging from the collapse in commodities to the housing slowdown. As a result, the yield curve is now strongly inverted.
Repositioning Play: Remote work is allowing companies to consolidate and upgrade their existing space. This is creating a larger gap between new, class A space and everything else. Wall Street Journal
Chart of the Day
The yield curve is now at its most inverted level since 2006.
Source: The Daily Shot
WTF
Got ‘Em: A 16 year old fleeing police crashed his car into a sheriff’s office as ‘revenge’ because Florida. Breaking 911
Low Speed Chase: A man was arrested after trying to flee deputies on a riding lawnmower because Florida. NBC News
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
Visit us at RanchHarbor.com