MetroIntelligence Economic Update by P. DUFFY
December CPI up 7.0 percent year-on-year, highest increase since June 1982
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in December on a seasonally adjusted basis after rising 0.8 percent in November, and was up 7.0 percent year-on-year, the highest annual rise since June 1982. The index less food and energy rose 0.6 percent in December following a 0.5-percent increase in November, and was up 5.5 percent year-on-year, for the highest annual rise since February 1991.
Small Business Optimism Index edges up in December despite inflation challenges
The NFIB Small Business Optimism Index increased slightly in December to 98.9, up 0.5 points from November. Twenty-two percent report inflation as the single most important problem operating their business, a 20-point increase from the beginning of 2021 and the highest level since Q4 1981. Owners expecting better business conditions over the next six months increased three points to a net negative 35%. Owners remain pessimistic about future economic conditions as this indicator has declined 23 points over the past six months. Forty-nine percent of owners reported job openings that could not be filled, an increase of one point from November.
Purchase loan apps rise 2 percent from previous week, but down 17 percent year-on-year
The Market Composite Index for mortgage applications increased 1.4 percent on a seasonally adjusted basis from one week earlier, with purchase loans rising 2 percent (but down 17 percent year-on-year) and refinance activity slipping 0.1 percent (and down 50 percent year-on-year). The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 3.52 percent from 3.33 percent.