Evelyn Reynolds

Robert Lanter lives in a 600-square-foot house that can be traversed in five seconds and vacuumed from a single outlet. He doesn’t have a coffee table in the living room because it would obstruct the front door. When relatives come to visit, Mr. Lanter says jokingly, but only partly, they have to tour one at time.Each of these details amounts to something bigger, for Mr. Lanter’s life and the U.S. housing market: a house under $300,000, something increasingly hard to find. That price allowed Mr. Lanter, a 63-year-old retired nurse, to buy a new single-family home in a subdivision in Redmond, Ore., about 30 minutes outside Bend, where he is from and which is, along with its surrounding area, one of Oregon’s most expensive housing markets.Mr. Lanter’s house could easily fit on a flatbed truck, and is dwarfed by the two-story suburban homes that prevail on the blocks around him. But, in fact, there are even smaller homes in his subdivision, Cinder Butte, which was developed by a local builder called Hayden Homes. Some of his neighbors live in houses that total just 400 square feet — a 20-by-20-foot house attached to a 20-by-20-foot garage.This is not a colony of “tiny houses,” popular among minimalists and aesthetes looking to simplify their lives. For Mr. Lanter and his neighbors, it’s a chance to hold on to ownership.Mr. Lanter, who is recently divorced, came back to central Oregon from a condominium in Portland only to discover that home prices had surged beyond his reach. He has owned several larger homes over the years and said he began his recent search looking for a three-bedroom house.Robert Lanter outside his 600-square-foot home in Redmond, Ore.Ivan McClellan for The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

Wholesale prices rose more than expected in January, according to a Labor Department report Friday.
The report comes just days after the consumer price index showed inflation holding stubbornly higher despite Federal Reserve expectations for moderation through the year.

Wholesale prices rose more than expected in January, further complicating the inflation picture, according to a U.S. Department of Labor report Friday.
The producer price index, a measure of prices received by producers of domestic goods and services, rose 0.3% for the month, the biggest move since August. Economists surveyed by Dow Jones had been looking for an increase of just 0.1%. PPI fell 0.2% in December.

Excluding food and energy, core PPI increased 0.5%, also against expectations for a 0.1% gain. PPI excluding food, energy and trade services jumped 0.6%, its biggest one-month advance since January 2023.
The report comes just days after the consumer price index showed inflation holding stubbornly higher despite Federal Reserve expectations for moderation through the year. The CPI was up 3.1% from a year ago, down from its December level but still well ahead of the Fed’s goal for 2% inflation.
On a core basis, which the Fed focuses on more as a longer-term gauge of inflation, the CPI was up 3.9%. CPI differs from PPI in that it measures the prices consumers actually pay in the marketplace.
Markets fell sharply after Tuesday’s CPI reading, and there were fears that a hot PPI number also could cause another jolt. Expectations have been rising high that the Fed would use the easing inflation numbers as incentive to cut interest rates aggressively this year, but traders have had to pare back those expectations in recent days as inflation has shown unexpected persistence.
Stock market futures moved lower after the PPI report and Treasury yields surged.

Just a few weeks ago, markets had been pricing in the first Fed rate cut in March. That since has been pared back to June as policymakers have expressed caution about giving up the inflation fight too quickly while noting that an otherwise stable economy buys them time before having to move.
A 0.6% increase in final demand service helped propel the wholesale index higher, which in itself was boosted by a 2.2% rise in hospital outpatient care. Goods prices actually decreased 0.2% on the back of a 1.7% decline in final demand energy as gasoline slid 3.6%.
On a 12-month basis, headline PPI increased just 0.9%, slightly lower than the 1% level in December. However, excluding food, energy and trade services, the index rose 2.6%.
Along with the troublesome inflation readings, the Commerce Department reported this week that retail sales in January slid by 0.8%, far more than anticipated.Don’t miss these stories from CNBC PRO: More

U.K. retail sales rebounded by 3.4% after a grim December, according to the Office for National Statistics, the strongest monthly gain since April 2021.
The “strong pick up in sales suggests the worst is now behind the retail sector and falling inflation and rising wages in 2024 will provide a strong platform for recovery,” Joe Maher, assistant economist at Capital Economics, said in a note.

A general view of a kiosk near Charing Cross station in London, England, on January 20, 2024. (Photo by Alberto Pezzali/NurPhoto via Getty Images)
Nurphoto | Nurphoto | Getty Images

LONDON — Stronger-than-expected January retail sales provided a glimmer of light for the struggling British economy on Friday — and suggest that the country’s recession will be short-lived, according to some economists.
Sales rebounded by 3.4% from December, according to the Office for National Statistics, the strongest monthly gain since April 2021. Economists polled by Reuters had expected a more modest growth of 1.5%.

Sales volumes increased in all areas except closing, as food shops saw the biggest boost. Consumers “spent more for less in January,” the ONS said, with the total they paid rising by 3.9%.
The latest figures follow the news of Thursday that the British economy entered a technical recession in the final quarter of 2023. Gross domestic product declined by 0.3%, following a 0.1% contraction in the third quarter.
Sales over the key holiday trading period were far weaker than expected, with December seeing the biggest monthly fal since January 2021.
British retail sales meanwhile remain 1.3% below their pre-pandemic level from February 2020, according to the ONS.
The “strong pick up in sales suggests the worst is now behind the retail sector and falling inflation and rising wages in 2024 will provide a strong platform for recovery,” Joe Maher, assistant economist at Capital Economics, said in a note.

The hike also points to a fading drag on consumer spending from higher interest rates, as well as the economy exiting recession territory, Maher said —but there is “still a long way back for retailers” to their pre-pandemic highs.
Kris Hamer, director of insight at the British Retail Consortium, said two months of higher sales volumes over the last three months were “promising” after 19 months of decline.
“Nonetheless, shoppers remained cautious as they entered the third year of the high cost of living,” Hamer said, adding that a rise in business rates and new border control costs would weigh on the retail sector.
Despite the poor growth figures, the retail report — along with steady inflation figures and a healthy December jobs report — ended the week on a “half positive note,” said Kallum Pickering, senior economist at Berenberg.
Anecdotal evidence from retailers suggests consumers held back in December, but came out in force to benefit from January sales, he said.
“However, we need to be cautious. Monthly data are volatile. The January jump merely offsets the big 3.3% [month-on-month drop in December – and hence returns real sales to the November level,” Pickering said in a note.
The fresh figures are consistent with “haphazard stagnation” in the retail sector and with broader economic activity in the last 18 months, though Berenberg economists expect retail momentum to pick up over the coming months due to higher real wages and consumer confidence, he added. More

Advance retail sales declined 0.8% for January, down from a 0.4% gain in December and worse than the estimate for a 0.3% drop.
Sales at building materials and garden stores were especially weak, sliding 4.1%. Miscellaneous store sales fell 3% and motor vehicle parts and retailers saw a 1.7% decrease.
Also, initial claims for unemployment insurance totaled 212,000 for the week ended Feb. 10, a decline of 8,000 from the previous week’s upwardly revised total and below the estimate for 220,000.

Consumer spending fell sharply in January, presenting a potential early danger sign for the economy, the Commerce Department reported Thursday.
Advance retail sales declined 0.8% for the month following a downwardly revised 0.4% gain in December, according to the Census Bureau. A decrease had been expected: Economists surveyed by Dow Jones were looking for a drop of 0.3%, in part to make up for seasonal distortions that probably boosted December’s number.

However, the pullback was considerably more than anticipated. Even excluding autos, sales dropped 0.6%, well below the estimate for a 0.2% gain.
The sales report is adjusted for seasonal factors but not for inflation, so the release showed spending lagging the pace of price increases. On a year-over-year basis, sales were up just 0.6%.
Headline inflation rose 0.3% in January and 0.4% when excluding food and energy prices, the Labor Department reported Tuesday. On a year-over-year basis, the two readings were 3.1% and 3.9%, respectively.
Sales at building materials and garden stores were especially weak, sliding 4.1%. Miscellaneous store sales fell 3% and motor vehicle parts and retailers saw a 1.7% decrease. Gas station sales also declined 1.7% as prices at the pump dropped during the month. On the upside, restaurants and bars reported an increase of 0.7%.
The control group of retail sales, which excludes items such as food service, autos, gas and building materials, fell 0.4%. The number feeds directly into the Commerce Department’s calculations for gross domestic product.

Consumer strength has been at the center of a U.S. growth picture that has proven far more durable than most policymakers and economists had expected. Spending accelerated by 2.8% in the fourth quarter of 2023, finishing out a year in which gross domestic product rose 2.5% despite widespread predictions for a recession.
However, worries linger that stubbornly high inflation could take its toll and jeopardize prospects going forward.
“It’s a weak report, but not a fundamental shift in consumer spending,” said Robert Frick, corporate economist for Navy Federal Credit Union. “December was high due to holiday shopping, and January saw drops in those spending categories, plus frigid weather plus an unfavorable seasonal adjustment. Consumer spending likely won’t be great this year, but with real wage gains and increasing employment it should be plenty to help keep the economy expanding.”
A separate economic report Thursday showed continuing labor market strength, another critical bedrock for the economic picture.
Initial claims for unemployment insurance totaled 212,000 for the week ended Feb. 10, a decline of 8,000 from the previous week’s upwardly revised total and below the estimate for 220,000, the Labor Department reported.
Continuing claims, which run a week behind, totaled just shy of 1.9 million, up 30,000 on the week and higher than the 1.88 million estimate.
There also was some good news on the manufacturing front, as regional surveys in the Federal Reserve’s Philadelphia and New York districts both came in better than expected for February.
The Philadelphia survey showed a reading of 5.2, up 16 points and better than the -8 estimate, while the Empire State survey for New York was at -2.4. Although the New York survey still indicated contraction, it was a much better reading than January’s -43.7 and the -15 estimate. The surveys measure the share of companies reporting growth, so a positive reading indicates expansion.
Markets largely took the reports in stride, with stock futures pointing to a higher open on Wall Street.
Investors are closely watching the numbers for clues about which way the Fed will go in terms of monetary policy and interest rates.
Federal Reserve officials have said they are satisfied enough with the prospects for both inflation falling and growth holding steady that the rate-hiking cycle begun in March 2022 is likely over. But they are watching the data closely, with most saying that they will need more evidence that inflation is on a sustainable path back to the central bank’s 2% goal before starting to cut.
Futures market pricing is indicating the first rate reduction will happen in June, with the Fed moving a total of four times, or a full percentage point, by the end of 2024.
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