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1/29/2024 Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasur… Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasury Borrowing Advisory Committee January 29, 2024 INT RODUCT ION Over the past three months, incoming data have remained consistent with a so landing for the U.S. economy. Elevated labor force participation and the resolution of pandemic-era supply chain challenges have strengthened our economyʼs productive capacity, helping create space for strong economic growth while inflation continues to cool. Just last week, the Bureau of Economic Analysisʼs (BEA) advance estimate of gross domestic product (GDP) in the fourth quarter of 2023 surprised on the upside. While median forecasts expected annualized growth around 2.0 percent, the initial read of GDP growth was 3.3 percent at an annual rate. Real GDP rose 3.1 percent over the four quarters of 2023, the third strongest calendar year rate since before the Global Financial Crisis. In addition, employment growth moderated in the fourth quarter but remained well above rates needed to accommodate population growth. Importantly, labor supply remained elevated, allowing the unemployment rate to hold at low levels without adding inflationary pressures. Headline inflation cooled further as energy prices decreased on balance over the quarter, though further progress is needed to bring core inflation to a level consistent with the Federal Reserveʼs target. Still, encouraging economic news in the fourth quarter does not assure similar performance in the current quarter. The economic situation can change quickly due to geopolitical and domestic events. Yet, despite many uncertainties and headwinds, the U.S. economy proved resilient and strong in 2023 and remains well-positioned as we move into 2024. The Administration remains focused on further expanding our economyʼs productive capacity as we implement significant investments in our nationʼs clean energy, manufacturing capacity, and infrastructure. REAL GROSS DOMEST IC PRODUCT ( GDP) https://home.treasury.gov/news/press-releases/jy2055 1/22 1/29/2024 Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasur… Real GDP growth remained strong in the fourth quarter of 2023, rising by 3.3 percent at an annual rate, a er exceptionally strong growth in the third quarter of 4.9 percent (see Table 1 – Real Gross Domestic Product). Significantly, growth in the fourth quarter was largely driven by underlying private domestic demand, including sustained momentum in personal consumption expenditures (PCE) and faster growth in business fixed investment. Over the four quarters of 2023, real GDP growth accelerated to 3.1 percent—the fastest annual pace this Administration and the third fastest annual pace since before the Global Financial Crisis. Decomposing GDP into smaller components can be helpful in tracking the economyʼs performance. The four components we consider are: (1) private domestic final purchases (PDFP), the most persistent and stable components of output: personal consumption, business fixed investment, and residential investment; (2) government consumption and investment; (3) net international purchases (U.S. exports less U.S. imports); and (4) intermediate demand (or the change in private inventories). Examined separately, each component delivers specific information about activity in various sectors that can be useful in predicting the future path of growth. The first component, PDFP, is particularly important to analyze: it measures the private sectorʼs capacity to drive self-sustaining growth and, therefore, may signal the direction of future economic performance. In the fourth quarter, real PDFP growth was a strong 2.6 percent at an annual rate, which accounted for 2.2 percentage points of total GDP growth. Although slowing modestly, personal consumption expenditure (PCE) growth remained close to the third quarter pace, as household finances were underpinned by strong labor market conditions and rising incomes in real terms. Spending on goods and services grew solidly. Household purchases of goods rose at a slower rate than in the third quarter. By contrast, the growth rate for consumption of services accelerated in the fourth quarter, driven by larger contributions from most components, save for expenditures on rent of rent of housing, food services, and financial service. On net, household spending on services accounted for roughly 55 percent of PCEʼs contribution to GDP growth. Business fixed investment accelerated in the fourth quarter, reflecting growth in all three major components. Investment in equipment turned positive in the fourth quarter, while spending on intellectual property products grew for the fourteenth consecutive quarter. Meanwhile, investment in structures slowed sharply in the fourth quarter, dropping from 11.2 percent annualized in the third quarter to 3.2 percent—largely driven by less investment in commercial and health care buildings, as well as other structures. https://home.treasury.gov/news/press-releases/jy2055 2/22 1/29/2024 Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasur… Residential investment, the final component of PDFP, posted growth in the fourth quarter, marking this sectorʼs first back-to-back quarters of expansion in three years. Although growth slowed to 1.0 percent in the final quarter of 2023 from 6.7 percent in the third quarter, the slower growth largely reflected weakness in brokersʼ commissions and other types of residential investment, which partially o set a gain in single-family construction. The other three components of GDP (government spending, net exports, and inventory changes) all made positive contributions to fourth quarter growth. Total government spending contributed solidly to growth in the fourth quarter, but paces of growth were so er at all levels of government—though state and local government expenditures accounted for more than two-thirds of the increase. International trade was a net positive contributor to real GDP growth as the increase in exports outweighed import growth, resulting in a narrower trade deficit in the fourth quarter. The change in private inventories, which can exhibit wide swings from quarter to quarter, added only slightly to growth in third quarter a er a large contribution in the third quarter. Notably, this decline in the contribution from the change in private inventory investment explains most of the deceleration in real GDP growth from the third to the fourth quarters. LAB OR MARKETS In the final quarter of 2023, the U.S. labor market exhibited solid employment gains, low unemployment, and stable labor force participation near post-pandemic highs. In addition, signs of cooling pointed to continuing realignment between labor demand and labor supply (see Table 2 – Labor Market Indicators). The average pace of payroll job creation slowed in the fourth quarter to 165,000 per month. Although down from the third quarter average of 221,000 per month, the fourth quarter pace was still well above that needed to accommodate population growth. The unemployment rate also trended lower over the quarter and ended the year at 3.7 percent, down 0.1 percentage points from September. A broader measure of labor underutilization is the underemployment rate, which includes those working part-time for economic reasons and those marginally attached to the labor force. Although the underemployment rate stepped up to 7.1 percent at the end of the fourth quarter, it remains historically low; for comparison, the underemployment rate in 2019—a period generally viewed as a full-employment environment —averaged 7.2 percent throughout the year. Indeed, weekly unemployment insurance claims since late November have come in persistently below 2018 and 2019, when labor markets were https://home.treasury.gov/news/press-releases/jy2055 3/22 1/29/2024 Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasur… likely at full employment. On average, initial unemployment claims (NSA) during the weeks ending January 13 and 20 were 12.0 percent below corresponding weeks in 2018 and 2019. Continuing claims data also have fallen below comparable 2018 and 2019 readings and are consistent with strong labor markets. Meanwhile, labor supply and demand continued to realign in the fourth quarter. Labor supply held at or near post-pandemic highs: at 62.7 percent in the fourth quarter, total labor force participation was unchanged from the third quarter average. Although total LFPR edged down a bit in December, the year-end rate still was 62.5 percent—or 0.2 percentage points higher than a year earlier—while the prime-age (ages 25 to 54) LFPR was 83.2 percent, up 0.7 percentage points over the year. Meanwhile, demand for labor continued to ease. Job openings (or vacancies) have trended lower since peaking at 12.0 million in March 2022. This downtrend continued during the first two months of the fourth quarter (latest available data), during which the average number of job openings fell to 8.8 million, down 435,000 from the third quarter average. As a result, the ratio of job vacancies to unemployed workers has declined from a peak of 2.0 in March 2022. As of November, there were 1.4 job openings per unemployed worker, down by 0.1 from the corresponding month in the third quarter. Although the ratio still is above the pre-pandemic high of 1.2, the downtrend since March 2022 confirms that labor demand and supply are realigning. INF LAT ION Headline inflation slowed considerably during the fourth quarter and, by the end of the quarter, was down on a year-over-year basis by nearly two-thirds of its peak in June 2022. Core inflation, meanwhile, maintained a steady pace throughout the third and further quarters; by the end of the year, core inflation was down roughly 40 percent from its peak in autumn of 2022. As measured by the consumer price index (CPI), the average rate of monthly inflation during the fourth quarter was 0.1 percent, down from an average of 0.4 percent during the third quarter (see Table 3 – Inflation and Wage Growth Indicators). Headline inflation was held down by falling energy prices, which declined an average of 1.5 percent per month in the fourth quarter, a er rising 2.4 percent on average in the third quarter. Despite the decline in energy prices in the fourth quarter, recent developments suggest upside price risk to energy and headline inflation. Geopolitical tensions in Ukraine and the Middle East, as well as OPEC+ https://home.treasury.gov/news/press-releases/jy2055 4/22 1/29/2024 Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasur… production cuts, have added uncertainty to the energy outlook—though OPEC+ oil production cuts have encouraged output growth among non-OPEC+ countries, including the United States, and mitigated the price impact. For the other non-core components of inflation, average monthly food inflation was stable in the fourth quarter, remaining at the third quarterʼs average pace of 0.2 percent—that is, near rates seen prior to the pandemic. Excluding energy and food, core CPI inflation remained stable in the second half of 2023— though inflation rates of core components diverged. Over the fourth quarter, core inflation averaged 0.3 percent per month, unchanged from the third quarter. Core goods prices decreased for the second consecutive quarter—though the pace of deflation was roughly half that in the third quarter. By contrast, core services inflation remained elevated. Sustained upward pressure from rent of housing services (rent of primary residential and ownersʼ equivalent rent)—which is the largest share of core inflation—sets a high floor to core services inflation, though it has eased slowly. The fourth quarter pace of inflation for rent of housing services matched that of the previous two quarters but was 6.4 percent on a yearover-year basis in December, the slowest pace twelve-month pace since July 2022. For nonhousing core services, inflation held steady at an elevated pace in the fourth quarter. Inflation as measured by the PCE price index assigns di erent weights for di erent components and uses a di erent methodology in its calculation than the CPI. Nonetheless, the drivers of both measures of inflation and the patterns in the fourth quarter are broadly similar. HOUSING MARKETS New Residential Construction: On net, new home construction supported economic activity in the fourth quarter, with growth rates of all but the early stages of home building improving relative to the third quarter (see Table 4 – Housing Market Indicators). The pace of growth of total building permits—which precede future home construction—slowed slightly due to more moderate growth in the single-family sector. Multi-family permits, meanwhile, declined at a slower pace, extending the downtrend that began in the latter half of 2022. Meanwhile, growth of total housing starts turned positive in the fourth quarter, owing to a renewed growth in multi-unit starts. For the next two stages of production, the inventory of homes under construction was unchanged at the end of the fourth quarter, but home completions returned to positive growth. On a year-over-year basis, total home completions rose at the https://home.treasury.gov/news/press-releases/jy2055 5/22 1/29/2024 Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasur… fastest pace since before the pandemic, signaling favorable developments for housing supply throughout 2023. Homes Sales and Inventories: Ongoing housing a ordability challenges—stemming from both high home prices and elevated, though declining, mortgage rates—continued to constrain existing home sales in the fourth quarter (see Table 4 – Housing Market Indicators). Sales of total existing homes declined for the third consecutive quarter and were down by 6.2 percent over 2023. Even so, the pace of decline over 2023 was less than a fi h of that in 2022. Meanwhile, inventories of homes for sale fell to a 21-month low in December 2023, likely reflecting in part the reluctance of owners of existing homes to sell when they may be locked into low mortgages. Accordingly, prospective homeowners have maintained their focus on the new home market, where sales of single-family units rose for five consecutive quarters before pulling back in the fourth quarter: sales of new single-family homes declined 1.6 percent per month, on average, a er rising 0.7 percent in the third quarter. Starting in the summer of 2022, the strength of new home sales had weighed on the inventory-to-sales ratios (the number of months of sales that current inventories can support) but in the last two quarters, inventories for new homes have increased, from a low of 7.1 months in July 2023 to an average 8.3 months in the fourth quarter. Home Prices and Rents: Home prices maintained a rapid pace of growth during the early part of the fourth quarter, but some measures moderated significantly (see Table 5 – Home Price and Rent Indicators). Although growth in the S&P/Case-Shillerʼs national home price index slowed modestly in October (last available data as of January 29), the pace of house price growth in the FHFA purchase only-index was nearly 60 percent lower than in the third quarter. Nonetheless, according to both home price measure, house prices set fresh record highs at the start of the fourth quarter. For renters, measures of shelter cost growth were mixed in the fourth quarter. The CPI for rent of primary residence rose 5.7 percent at an annual rate in the fourth quarter—though both rates were marginally slower than in the second quarter. However, measures of new rental agreements continue to suggest a favorable outlook for the rent CPI, which is a lagged measure and trails prices from rental unit listing services by about a year. Listing services data indicate that a er slowing significantly in the third quarter, rental inflation turned negative in the fourth quarter, which may suggest further progress bringing down shelter inflation in coming quarters. https://home.treasury.gov/news/press-releases/jy2055 6/22 1/29/2024 Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasur… RISKS TO T HE OUT LOOK Even amid substantial economic growth and a gradual easing of labor markets, inflation has fallen substantially from the highs of mid-2022. We expect this trend to continue over the next year and anticipate that inflation will return to historical norms. However, there are risks to this outlook on both sides. Geopolitical risks or persistently strong demand growth without comparable supply expansion could push inflation above consensus forecasts. Alternatively, a significant cooling in the labor market could bring inflation down faster—but with greater cost for American workers. Geopolitical instability and supply chain disruptions: Russiaʼs war in Ukraine continues to add uncertainty to the medium-term outlook. In addition, the ongoing conflict in the Middle East and drought conditions at the Panama Canal create further concerns of supply chain disruptions and could renew upward pressures on energy and goods prices. Fortunately, major impacts to the U.S. economy have not materialized to date, but these remain important risks to monitor. Consumer slowdown and labor market cooling: Strong consumption in 2023 supported the economy, fueled by real income growth and a reduced saving rate. Households have drawn down much of their excess savings from the pandemic period, but household net worth as a share of disposable personal income remains high relative to historical levels. Households should be able to continue to grow consumption from growth in real incomes, but a risk remains that a slowdown in consumption could cool the labor market quickly, which could again reduce consumption and further slow the economy. This concern is particularly notable in areas with rising delinquency and default rates. In general, however, higher delinquency rates still reflect normalization from the low levels that persisted following pandemic income support programs. CONCLUSION The American economy remains strong, with rising incomes, a healthy labor market, and easing inflation. Going forward, we must continue to invest in expanding our economyʼs productive capacity in ways that benefit all Americans—what Secretary Yellen has called “modern supply-side economics.” The Biden-Harris Administrationʼs investments in our clean energy and manufacturing sectors, as well as in our public infrastructure, are oriented toward this goal. The Administration remains committed to helping foster continued improvements like those we saw in 2023. https://home.treasury.gov/news/press-releases/jy2055 7/22 1/29/2024 Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasur… TAB LE 1 - REAL GROSS DOMEST IC PRODUCT Percent Change (annual rate) Contribution to GDP Growth (percentage points) Percent Change (Q4 / Q4) 2023 Q3 2023 Q4 2023 Q4 2022 2023 Real GDP Growth 4.9 3.3 -- 0.7 3.1 Private Domestic Final Purchases (PDFP) 3.0 2.6 2.2 0.8 2.7 Personal Consumption Expenditures (PCE) 3.1 2.8 1.9 1.2 2.6 Goods 4.9 3.8 0.9 -0.6 3.5 Services 2.2 2.4 1.1 2.1 2.2 https://home.treasury.gov/news/press-releases/jy2055 8/22 1/29/2024 Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasur… Percent Change (annual rate) Contribution to GDP Growth (percentage points) Percent Change (Q4 / Q4) 2023 Q3 2023 Q4 2023 Q4 2022 2023 Business Fixed Investment 1.5 1.9 0.3 5.6 4.1 Equipment -4.4 1.0 0.1 5.3 -0.1 Structures 11.2 3.2 0.1 0.8 14.8 Intellectual Property Products 1.8 2.1 0.1 8.3 2.6 Residential Investment 6.7 1.0 0.0 -17.4 -0.1 Total Government Purchases 5.8 3.3 0.6 0.8 4.3 Federal 7.1 2.5 0.2 -0.1 4.0 State and Local 5.0 3.7 0.4 1.3 4.5 https://home.treasury.gov/news/press-releases/jy2055 9/22 1/29/2024 Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasur… Percent Change (annual rate) Contribution to GDP Growth (percentage points) Percent Change (Q4 / Q4) 2023 Q3 2023 Q4 2023 Q4 2022 2023 Net Exports (billions of real (2017) dollars) -931 -908 0.4 30 57 Imports (percent change, annual rate) 4.2 1.9 0.3 2.1 -0.2 Exports (percent change, annual rate) 5.4 6.3 0.2 4.3 2.1 Change in Private Inventories (billions (2017) dollars) 78 83 0.1 -55 -69 Source. Bureau of Economic Analysis, Gross Domestic Product (Advance Estimate), Fourth Quarter 2023. * Percentage point contribution to GDP growth. TAB LE 2 - LAB OR MARKET INDICATORS Average Monthly Change (thousands) https://home.treasury.gov/news/press-releases/jy2055 Annual Change (December December) 10/22 1/29/2024 Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasur… Establishment Survey Average 2023 Monthly Change 2023 Q3 (thousands) Q4 Annual Change (December 2022 2023 December) Establishment Survey 2023 Q3 2023 Q4 2022 2023 Payroll Employment 221 165 4793 2697 Private Sector 153 115 4518 2025 Manufacturing 2 -2 390 12 Construction 17 17 265 197 Service Providing 132 101 3814 1803 Education and Health Services 98 89 935 1051 Leisure and Hospitality 41 26 1058 466 Temporary Help Services -17 -33 -30 -207 Government 68 50 275 672 State and Local Education 36 24 114 317 https://home.treasury.gov/news/press-releases/jy2055 11/22 1/29/2024 Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasur… Monthly Average Annual Change (December December) Household Survey 2023 Q3 2023 Q4 2022 2023 Household Employment (% Total Population) 60.4 60.3 0.5 0.0 Prime-Age (% of Population Ages 25 to 54) 80.8 80.6 0.9 0.3 55+ (% of Population Ages 55+) 37.7 37.5 0.5 -0.5 Unemployment Rate, U-3 (% of Total Labor Force) 3.7 3.7 -0.4 0.2 Underemployment Rate, U-6* 6.9 7.1 -0.8 0.6 Long-Term (27+ weeks) 0.8 0.7 -0.5 0.0 Labor Force Participation Rate (% Total Population) 62.7 62.7 0.3 0.2 Prime-Age (% of Population Ages 25 to 54) 83.5 83.3 0.5 0.7 https://home.treasury.gov/news/press-releases/jy2055 12/22 1/29/2024 Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasur… Monthly Average Annual Change (December December) Household Survey 2023 Q3 2023 Q4 2022 2023 55+ (% of Population Ages 55+) 38.7 38.6 0.3 -0.4 Monthly Average Annual Change (December December) Job Openings and Labor Turnover Survey 2023 Q3 2023 Oct - Nov 2021 2022 Job Openings (thousands) 9256 8821 4972 -592 Private Sector 8257 7831 4543 -595 Professional Business Services 1609 1626 663 -82 Education and Health Services 1923 1866 921 -100 Leisure and Hospitality 1274 1192 1068 21 https://home.treasury.gov/news/press-releases/jy2055 13/22 1/29/2024 Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasur… Monthly Average Annual Change (December December) Job Openings and Labor Turnover Survey 2023 Q3 2023 Oct - Nov 2021 2022 Separations Rate (% of Payroll Employment) 3.6 3.5 0.1 -0.3 Quits Rate 2.3 2.3 0.5 -0.3 Layo s and Discharges Rate 1.1 1.0 -0.4 0.1 Job Openings per Unemployed Person 1.49 1.39 1.24 0.10 Sources. Bureau of Labor Statistics, The Employment Situation - December 2023; Job Openings and Labor Turnover - November 2023. 1 The U6 measure is the broadest measure of unemployment, and includes those marginally attached to the labor force as well as those working part-time for economic reasons. TAB LE 3 - INF LAT ION AND W AGE GROW T H INDICATORS Average Monthly Percent Change https://home.treasury.gov/news/press-releases/jy2055 Percent Change (December / December) 1 14/22 1/29/2024 Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasur… Inflation Average 2023 Monthly Percent 2023 Q3 Change Q4 Percent Change 2022 2023 (December / December) 1 Inflation 2023 Q3 2023 Q4 2022 2023 Consumer Price Index (CPI) 0.4 0.1 6.5 3.4 Foods 0.2 0.2 10.4 2.7 Energy 2.4 -1.5 7.3 -2.0 Core (ex. Food and Energy) CPI 0.3 0.3 5.7 3.9 Core Goods -0.3 -0.1 2.1 0.2 Core Services ex. Rent of Shelter2 0.4 0.4 6.2 3.9 Rent of Shelter 0.5 0.5 7.7 6.4 PCE Price Index 0.3 0.0 5.4 2.6 Core PCE Price Index 0.2 0.1 4.9 2.9 Percent Change (annual rate) https://home.treasury.gov/news/press-releases/jy2055 Percent Change (December / December) 15/22 1/29/2024 Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasur… Wages and Earnings 2023 Percent Change 2023 Q3 (annual rate) Q4 Percent Change 2022 2023 (December / December) Wages and Earnings 2023 Q3 2023 Q4 2022 2023 Average Hourly Earnings (AHE), Total Private3 3.7 4.3 4.8 4.1 Good Producing 5.2 5.2 4.5 5.4 Services Providing 3.4 4.2 4.8 3.8 Employment Cost Index (ECI), Wages & Salaries, Total Private4 4.3 -- 5.1 -- GoodProducing Industries 3.3 -- 4.9 -- ServiceProviding Industries 4.3 -- 5.2 -- Real AHE, Private3 -1.1 2.6 -1.6 0.8 Good Producing 0.4 3.3 -1.9 2.1 https://home.treasury.gov/news/press-releases/jy2055 16/22 1/29/2024 Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasur… Percent Change (annual rate) Percent Change (December / December) Wages and Earnings 2023 Q3 2023 Q4 2022 2023 Services Providing -1.4 2.2 -1.4 0.5 Sources. Bureau of Labor Statistics, Consumer Price Index - December 2023; The Employment Situation - December 2023; Employment Cost Index - September 2023. Bureau of Economic Analysis, Personal Income and Outlays, December 2023. "1 For CPI, 12-month growth is not seasonally adjusted. 2 Imputed from CPI Data. 3 All private, non-farm employees. 4 ECI for Q4 will be published on Wednesday, January 31." TAB LE 4 - HOUSING MARKET INDICATORS Thousands Average Monthly Percent Change Percent Change (December / December) New Residential Construction Dec '23 2023 Q3 2023 Q4 2022 2023 Building Permits, Total 1493 0.7 0.5 -27.7 6.0 SingleFamily 999 1.4 1.2 -34.8 33.6 https://home.treasury.gov/news/press-releases/jy2055 17/22 1/29/2024 Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasur… Thousands Average Monthly Percent Change Percent Change (December / December) New Residential Construction Dec '23 2023 Q3 2023 Q4 2022 2023 Units Authorized but Not Started, Total1 266 0.6 -1.3 10.6 -8.9 SingleFamily1 140 0.2 -0.2 -1.4 0.7 Housing Starts, Total 1460 -1.5 2.5 -24.1 7.6 SingleFamily 1027 1.3 2.1 -27.1 15.8 1679 -0.3 0.0 11.1 -1.0 SingleFamily1 671 -0.6 0.0 -1.8 -11.4 Housing Completions, Total 1574 -0.7 2.6 4.0 13.2 Units Under Construction, Total1 https://home.treasury.gov/news/press-releases/jy2055 18/22 1/29/2024 Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasur… Thousands Average Monthly Percent Change Percent Change (December / December) New Residential Construction Dec '23 2023 Q3 2023 Q4 2022 2023 SingleFamily 1056 -0.6 2.2 -2.5 6.1 Thousands Average Monthly Percent Change Percent Change (December / December) Home Sales Dec '23 2023 Q3 2023 Q4 2022 2023 Existing Homes, Total 3780 -1.7 -1.5 -34.0 -6.2 SingleFamily 3400 -1.7 -1.2 -33.5 -6.1 New Homes, SingleFamily 664 0.7 -1.7 -23.4 4.4 Thousands Inventories of Home for Sale Average Months' Supply (inventory / sales) Dec '23 https://home.treasury.gov/news/press-releases/jy2055 2023 Q3 2023 Q4 Change in Month's Supply (December / December) 2022 2023 19/22 1/29/2024 Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasur… Thousands Average Months' Supply (inventory / sales) Change in Month's Supply (December / December) Inventories of Home for Sale Dec '23 2023 Q3 2023 Q4 2022 2023 Existing Homes, Total 1000 3.3 3.5 1.1 0.3 SingleFamily 870 3.3 3.4 1.1 0.3 New Homes, SingleFamily 453 7.5 8.3 2.9 -0.3 Sources. Census Bureau, Monthly New Residential Construction, December 2023; Monthly New Residential Sales, December 2023. National Assocation of Realtors, Existing-Home Sales . 1 Units at the end of the period, levels not at an annual rate TAB LE 5 - HOME PRICE AND RENT INDICATORS Percent Change (annual rate) Percent Change (December / December) Home Price Indices (HPI) 2023 Q3 2023 Q4 2021 2022 S&P Core Logic Case-Shile National HPI1,2 9.1 8.1 19.0 5.7 Composite 20City HPI1,2 9.9 7.9 18.6 4.8 https://home.treasury.gov/news/press-releases/jy2055 20/22 1/29/2024 Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasur… Percent Change (annual rate) Percent Change (December / December) Home Price Indices (HPI) 2023 Q3 2023 Q4 2021 2022 FHFA Purchase-Only HPI1 9.3 3.9 17.8 6.8 Zillow Total Home Value Index (HVI) 5.5 2.3 15.9 9.9 Bottom-Tier Homes HVI 6.3 2.7 13.7 10.7 Percent Change (annual rate) Percent Change (December / December) Rent Indices 2023 Q3 2023 Q4 2022 2023 CPI Rent of Primary Residence 5.7 5.7 8.4 6.5 Zillow Observed Rent Index 3.9 -2.1 7.6 3.3 Sources. Standard & Poor's, S&P CoreLogic Case-Shiller Home Price Indices . Federal Housing Financing Agency, Home Price Index (HPI) Monthly Report. Zillow, Housing Data. Bureau of Labor Statistics, Consumer Price Index - December 2023. https://home.treasury.gov/news/press-releases/jy2055 21/22 1/29/2024 Economy Statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasur… 1 Annualiz ed monthly rate through October. S&P and FHFA house price indices next published on January 30. 2 12-month percent change not seasonally adjusted. https://home.treasury.gov/news/press-releases/jy2055 22/22
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