11/11/2022 — MetroIntelligence Economic Update by P. DUFFY

MetroIntelligence Economic Update by P. DUFFY

CPI rises less than expected, rising 0.4 percent in October and 7.7 percent year-on-year

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4 percent in October on a seasonally adjusted basis, the same increase as in September, and was up 7.7 percent year-on-year.  The index for all items less food and energy rose 0.3 percent in October, after rising 0.6 percent in September, and was up 6.3 percent year-on-year.  The increases were less than forecast.


Housing affordability continued to fall in 3Q2022

According to the NAHB/Wells Fargo Housing Opportunity Index (HOI), just 42.2% of new and existing homes sold between the beginning of July and end of September were affordable to families earning the U.S. median income of $90,000. This marks the second consecutive record low for housing affordability in more than a decade, trailing the previous mark of 42.8% set in the second quarter.


Revolving debt surges as credit card rates hit 18-year high

Consumer credit (ex-real estate) grew at a seasonal adjusted annual rate (SAAR) of 6.8% in the third quarter of 2022. Revolving debt increased at a 12.9% rate, more than double the pace of nonrevolving debt (+4.9%). Credit card interest rates reached 16.3%, the highest level since the inception of the data series in 1994. Between Q2 2020 and Q2 2021, revolving consumer credit outstanding as a share of the total steeply declined as stimulus checks were used to pay down credit card debt. The share has increased each quarter since.