From Manheim Consulting today: Wholesale Used-Vehicle Prices Decreased in February

Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) were lower in February compared to January. The Manheim Used Vehicle Value Index (MUVVI) decreased to 204.1, which reflects a 0.1% increase from a year ago. The seasonal adjustment to the index drove the monthly move for the index, as non-seasonally adjusted values rose for the month. The non-adjusted price in February increased by 1.4% compared to January, moving the unadjusted average price up 0.8% year over year.
emphasis added

Click on graph for larger image.

This index from Manheim Consulting is based on all completed sales transactions at Manheim’s U.S. auctions.

The Manheim index suggests used car prices decreased in February (seasonally adjusted) and were up 0.1% YoY.

Today, in the Real Estate Newsletter: Asking Rents Mostly Unchanged Year-over-year

Brief excerpt:

Another monthly update on rents.

Tracking rents is important for understanding the dynamics of the housing market. Slower household formation and increased supply (more multi-family completions) has kept asking rents under pressure. ...

Apartment List: Asking Rent Growth -0.4% Year-over-year ...

On the supply side of the rental market, our national vacancy index now sits at 6.9 percent, the highest reading in the history of that monthly data series, which goes back to the start of 2017. After a historic tightening in 2021, multifamily occupancy has been slowly but consistently easing for over three years amid an influx of new inventory. 2024 saw the most new apartment completions since the mid-1980s, and with nearly 800 thousand units still in the construction pipeline, the supply boom has runway to continue into 2025.

Realtor.com: 18th Consecutive Month with Year-over-year Decline in Rents

In the first month of 2025, the median asking rent across the 50 largest U.S. metropolitan areas picked up slightly to $1,703, from $1,695 in December 2024, but it remains down 0.2% from one year ago. This marks the 18th consecutive month in which rents have fallen year over year.

This is much more in the article.

From Fed Chair Powell: Economic Outlook

Despite elevated levels of uncertainty, the U.S. economy continues to be in a good place. The labor market is solid, and inflation has moved closer to our 2 percent longer-run goal. At the Federal Reserve, we are intently focused on the dual-mandate goals given to us by Congress: maximum employment and stable prices.

Recent Economic Data
Economic growth
The economy has been growing at a solid pace. GDP expanded at a 2.3 percent annual rate in the fourth quarter of last year, extending a period of consistent growth that has been supported by resilient consumer spending. Recent indicators point to a possible moderation in consumer spending relative to the rapid growth rate over the second half of 2024. Further, recent surveys of households and businesses point to heightened uncertainty about the economic outlook. It remains to be seen how these developments might affect future spending and investment. Sentiment readings have not been a good predictor of consumption growth in recent years. We continue to carefully monitor a variety of indicators of household and business spending.

The labor market
Many indicators show that the labor market is solid and broadly in balance. The jobs report released this morning showed employers added 151,000 jobs to payrolls in February and the unemployment rate was 4.1 percent last month. Smoothing over the month-to-month volatility, since September, employers have added a solid 191,000 jobs a month on average. The unemployment rate remains low and has held in a narrow range between 3.9 and 4.2 percent for the past year. The jobs-to-workers gap has narrowed, and the quits rate has moved below pre-pandemic levels. Wages are growing faster than inflation, and at a more sustainable pace than earlier in the pandemic recovery. With wage growth moderating and labor supply and demand having moved into better balance, the labor market is not a significant source of inflationary pressure.

Inflation
Inflation has come down a long way from its mid-2022 peak above 7 percent without a sharp increase in unemployment—a historically unusual and most welcome outcome. While progress in reducing inflation has been broad based, recent readings remain somewhat above our 2 percent objective. The path to sustainably returning inflation to our target has been bumpy, and we expect that to continue. We see ongoing progress in categories that remain elevated, such as housing services and the market-based components of non-housing services. Inflation can be volatile month-to-month, and we do not overreact to one or two readings that are higher or lower than anticipated. Data released last week showed that total PCE prices rose 2.5 percent over the 12 months ending in January and that, excluding the volatile food and energy categories, core PCE prices rose 2.6 percent. We pay close attention to a broad range of measures of inflation expectations, and some near-term measures have recently moved up. We see this in both market- and survey-based measures, and survey respondents, both consumers and businesses, are mentioning tariffs as a driving factor. Beyond the next year or so, however, most measures of longer-term expectations remain stable and consistent with our 2 percent inflation goal.

Monetary Policy
Looking ahead, the new Administration is in the process of implementing significant policy changes in four distinct areas: trade, immigration, fiscal policy, and regulation. It is the net effect of these policy changes that will matter for the economy and for the path of monetary policy. While there have been recent developments in some of these areas, especially trade policy, uncertainty around the changes and their likely effects remains high. As we parse the incoming information, we are focused on separating the signal from the noise as the outlook evolves. We do not need to be in a hurry, and are well positioned to wait for greater clarity.

Policy is not on a preset course. If the economy remains strong but inflation does not continue to move sustainably toward 2 percent, we can maintain policy restraint for longer. If the labor market were to weaken unexpectedly or inflation were to fall more quickly than anticipated, we can ease policy accordingly. Our current policy stance is well positioned to deal with the risks and uncertainties that we face in pursuing both sides of our dual mandate.

Conclusion
Before I conclude, I will note that at our last FOMC meeting, we began our second five-year review of our monetary policy framework. We will consider changes to our consensus statement (Statement on Longer-Run Goals and Monetary Policy Strategy) and to our communications as part of this review. The consensus statement articulates our framework for the conduct of monetary policy in pursuit of the goals assigned to us by Congress. We will consider lessons of the past five years and adapt our approach, where appropriate, to best serve the American people, to whom we are accountable. The 2 percent longer-run inflation goal will be retained and is not a focus of the review.

This public review will be familiar to those who followed our process five years ago. We will hold outreach events around the country involving a wide range of parties, including Fed Listens events. We are open to new ideas and critical feedback. We will host a research conference in Washington in May. Our intent is to wrap up the review by late summer.

Special Note: There was a surge in gold imports in January. There is a time lag for when the imported gold will show up in inventories. GDPNow will correct for this once the gold is included as an increase in inventories, but currently GDPNow just included the import side. That is why GDPNow's tracking estimate of GDP is likely way too low.

From BofA:

Our 1Q GDP tracking is down from 2.3% q/q saar to 1.9% q/q saar since our last weekly publication. Also, after the second estimate of 4Q GDP, our 4Q tracking is up one-tenth to 2.4% q/q saar. [Mar 7th]
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From Goldman:

The details of the trade balance report indeed indicated that elevated gold imports contributed the bulk of increase in imports in January. Goods exports were softer than suggested by the Advance Economic Indicators report, while wholesale inventories were slightly firmer. Taken together, we lowered our Q1 GDP tracking estimate by 0.3pp to +1.3% (quarter-over-quarter annualized). [Mar 6th estimate]

And from the Atlanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2025 is -2.4 percent on March 6, up from -2.8 percent on March 3. After recent releases from the Institute for Supply Management, the US Bureau of Economic Analysis, and the US Census Bureau, the nowcasts of first-quarter real personal consumption expenditures growth and real gross private domestic investment growth increased from 0.0 percent and 2.5 percent, respectively, to 0.4 percent and 4.8 percent, while the nowcast of the contribution of net exports to first-quarter real GDP growth fell from -3.57 percentage points to -3.84 percentage points. [Mar 6th estimate]

The headline jobs number in the February employment report was slightly below expectations, and December and January payrolls were revised down by 2,000 combined.   The participation rate and the employment population ratio decreased, and the unemployment rate increased to 4.1%.
Earlier: February Employment Report: 151 thousand Jobs, 4.1% Unemployment Rate
Prime (25 to 54 Years Old) Participation

Since the overall participation rate is impacted by both cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.

The 25 to 54 years old participation rate was unchanged in February at 83.5% from 83.5% in January.
The 25 to 54 employment population ratio decreased to 80.5% from 80.7% the previous month.
Both are down from the recent peaks, but still near the highest level this millennium.

Average Hourly Wages

The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees from the Current Employment Statistics (CES).  
There was a huge increase at the beginning of the pandemic as lower paid employees were let go, and then the pandemic related spike reversed a year later.

Wage growth has trended down after peaking at 5.9% YoY in March 2022 and was at 4.0% YoY in February.   
Part Time for Economic Reasons

From the BLS report:

"The number of people employed part time for economic reasons increased by 460,000 to 4.9 million in February. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs."

The number of persons working part time for economic reasons increased in February to 4.94 million from 4.48 million in January.  This is above the pre-pandemic levels.

These workers are included in the alternate measure of labor underutilization (U-6) that increased to 8.0% from 7.5% in the previous month. This is down from the record high in April 2020 of 22.9% and up from the lowest level on record (seasonally adjusted) in December 2022 (6.6%). (This series started in 1994). This measure is above the 7.0% level in February 2020 (pre-pandemic).

Unemployed over 26 Weeks

This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.46 million workers who have been unemployed for more than 26 weeks and still want a job, up from 1.44 million the previous month.
This is down from post-pandemic high of 4.171 million, and up from the recent low of 1.056 million.

This is above pre-pandemic levels.

Job Streak

Through February 2025, the employment report indicated positive job growth for 50 consecutive months, putting the current streak in 2nd place of the longest job streaks in US history (since 1939).  
Headline Jobs, Top 10 Streaks Year EndedStreak, Months 12020113 2N/A501 3199048 4200746 5197945 6 tie194333 6 tie198633 6 tie200033 9196729 10199525 1Currrent Streak
Summary:

The headline jobs number in the February employment report was slightly below expectations, and December and January payrolls were revised down by 2,000 combined. The participation rate and the employment population ratio decreased, and the unemployment rate increased to 4.1%.
The headline number was decent.

From the BLS: Employment Situation

Total nonfarm payroll employment rose by 151,000 in February, and the unemployment rate changed little at 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment trended up in health care, financial activities, transportation and warehousing, and social assistance. Federal government employment declined.
...
The change in total nonfarm payroll employment for December was revised up by 16,000, from +307,000 to +323,000, and the change for January was revised down by 18,000, from +143,000 to +125,000. With these revisions, employment in December and January combined is 2,000 lower than previously reported.
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Click on graph for larger image.

The first graph shows the jobs added per month since January 2021.

Total payrolls increased by 151 thousand in February.  Private payrolls increased by 141 thousand, and public payrolls increased 11 thousand.

Payrolls for December and January were revised down 2 thousand, combined.
The second graph shows the year-over-year change in total non-farm employment since 1968.

In February, the year-over-year change was 1.95 million jobs.  Employment was up solidly year-over-year.

The third graph shows the employment population ratio and the participation rate.

The Labor Force Participation Rate decreased to 62.4% in February, from 62.6% in January. This is the percentage of the working age population in the labor force.

The Employment-Population ratio decreased to 59.9% from 60.1% in January (blue line).
I'll post the 25 to 54 age group employment-population ratio graph later.

The fourth graph shows the unemployment rate.

The unemployment rate increased to 4.1% in February from 4.0% in January.

This was slightly below consensus expectations, and December and January payrolls were revised down by 2,000 combined.  
I'll have more later ...

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Friday:
• At 8:30 AM ET, Employment Report for February.   The consensus is for 158,000 jobs added, and for the unemployment rate to be unchanged at 4.0%.

• At 12:30 PM: Speech, Fed Chair Jerome Powell, Economic Outlook, At The University of Chicago Booth School of Business 2025 U.S. Monetary Policy Forum, New York, N.Y.

On Friday at 8:30 AM ET, the BLS will release the employment report for February. The consensus is for 158,000 jobs added, and for the unemployment rate to be unchanged at 4.0%.

From Goldman Sachs:

We estimate nonfarm payrolls rose by 170k in February, slightly above consensus of +160k but below the three-month average of +237k. Alternative measures of employment growth indicated a firm pace of job creation, and we expect continued, albeit moderating, contributions from catch-up hiring and the recent surge in immigration. ... We estimate that the unemployment rate was unchanged on a rounded basis at 4.0%
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From BofA:

Feb non-farm payrolls are likely to print at a robust 185k. Government jobs are expected to come in at a slightly smaller than average 25k due to the federal hiring freeze. Given the muted claims data in the survey week, we do not expect DOGE driven job cuts to be a sizable drag on Feb data. Although, the colder than average weather could pose some downside risks. We expect the u-rate to remain at 4.0%.

• ADP Report: The ADP employment report showed 77,000 private sector jobs were added in February.  This was well below consensus forecasts and suggests job gains below consensus expectations, however, in general, ADP hasn't been very useful in forecasting the BLS report.

• ISM Surveys: Note that the ISM indexes are diffusion indexes based on the number of firms hiring (not the number of hires).  The ISM® manufacturing employment index decreased to 47.6%, down from 50.3% the previous month.   This would suggest about 30,000 jobs lost in manufacturing. The ADP report indicated 18,000 manufacturing jobs added in February.

The ISM® services employment index increased to 53.9%, from 52.3%. This would suggest 180,000 jobs added in the service sector. Combined this suggests 150,000 jobs added, close to consensus expectations.  (Note: The ISM surveys have been way off recently)

• Unemployment Claims: The weekly claims report showed about the same initial unemployment claims during the reference week at 215,000 in February compared to 213,500 in January.  This suggests layoffs in February were about the same as in January.

• Conclusion: Over the last year, employment gains averaged 168 thousand per month - and that is probably the current trend.  With some bounce back from the cold weather in January, my guess is headline employment gains will be above consensus in February.

Today, in the Calculated Risk Real Estate Newsletter: 1st Look at Local Housing Markets in February

A brief excerpt:

NOTE: The tables for active listings, new listings and closed sales all include a comparison to February 2019 for each local market (some 2019 data is not available).

This is the first look at a few early reporting local markets in February. I’m tracking over 40 local housing markets in the US. Some of the 40 markets are states, and some are metropolitan areas. I’ll update these tables throughout the month as additional data is released.

Closed sales in February were mostly for contracts signed in December and January when 30-year mortgage rates averaged 6.72% and 6.96%, respectively (Freddie Mac PMMS). This was an increase from the average rate for homes that closed in January, and up slightly from the average rate of 6.7% in December 2023 and January 2024.
...
In February, sales in these markets were down 4.8% YoY. Last month, in January, these same markets were up 7.2% year-over-year Not Seasonally Adjusted (NSA).

Note that most of these early reporting markets have shown stronger year-over-year sales than most other markets for the last several months.

Important: There was one fewer working day in February 2025 (19) as compared to February 2024 (20). So, the year-over-year change in the headline SA data will be above the change in the NSA data (there are other seasonal factors).
...
This was just a few early reporting markets. Many more local markets to come!

There is much more in the article.

The Census Bureau and the Bureau of Economic Analysis reported:

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $131.4 billion in January, up $33.3 billion from $98.1 billion in December, revised.

January exports were $269.8 billion, $3.3 billion more than December exports. January imports were $401.2 billion, $36.6 billion more than December imports.
emphasis added

Click on graph for larger image.

Both exports and imports increased in January.

Exports were up 4.1% year-over-year; imports were up 23.1% year-over-year.
Both imports and exports have generally increased recently.  

The second graph shows the U.S. trade deficit, with and without petroleum.

The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

Note that net, exports of petroleum products are positive and have been increasing.

The trade deficit with China increased to $31.7 billion from $23.7 billion a year ago.  
The surge in imports in January happened as some importers were avoiding the coming tariffs.

The DOL reported:

In the week ending March 1, the advance figure for seasonally adjusted initial claims was 221,000, a decrease of 21,000 from the previous week's unrevised level of 242,000. The 4-week moving average was 224,250, an increase of 250 from the previous week's unrevised average of 224,000.
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The following graph shows the 4-week moving average of weekly claims since 1971.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 224,250.

The previous week was unrevised.

Weekly claims were lower than the consensus forecast.