As inflation and shortages of key components pushed the average price of a new car to all-time highs (if you could even get one), it is logical that prices on used cars would follow suit – and they did. However, the bloom is off that rose and wholesale prices of used vehicles reached their lowest level in more than a year last month as interest rate hikes raised borrowing costs and fears of an imminent recession continue to spread.
In a speech to the European Parliament this week, European Central Bank President Christine Lagarde stated, “We do not see the components or the direction that would lead me to believe that we’ve reached peak inflation and that it’s going to decline in short order.”
As mortgage rates continue to rise and home sales continue to slow, the next leg down of a slowing real estate market has begun—contract cancellations. The National Association of Home Builders (NAHB) has reported large drops in the traffic of prospective buyers in each of the last eight months.
One of the hallmarks of a recession is a rise in consumer credit defaults, inevitably resulting in a rise in 3rd-party collection activity. That has not happened yet – in fact, quite the opposite. 3rd-party collection activity is at a record low of 5.7% of consumers – well less than half the 14.6% level seen in 2008’s recession.
Real estate flipper OpenDoor made quite a splash when it went public via a SPAC merger in December, 2020. And why not? It was going to upend the real estate “flipping” market via its revolutionary AI-driven algorithms which it employed to buy and sell homes around the country. It has piled up losses totaling an astounding $2.2 billion through Q3, $923 million in Q3 alone.
The U.S. economy gained a surprisingly strong number of new jobs last month, a sign the nation’s labor market remains strong. The Bureau of Labor Statistics reported 261,000 new jobs were created, exceeding the consensus of 205,000. Although the increase was the smallest since April of 2021, it was still strong by historical standards.