Raphael Stevens

The average monthly rent for a Manhattan apartment surpassed $5,000 for the first time.
Average rental prices in June were up 29% over last year.
Brokers say demand and prices are headed even higher into the fall.

A Chelsea Tower rental apartments billboard.
Jeff Greenberg | Getty Images

The average monthly rent for a Manhattan apartment surpassed $5,000 for the first time — and brokers say demand and prices are headed even higher into the fall.
The average apartment rent in June was $5,058, the highest on record, according to a report from Miller Samuel and Douglas Elliman. Average rental prices were up 29% over last year, while median rent was up by 25% to $4,050 a month.

Aside from pricing out many renters, the increases could have knock-on effects amid broader inflation pressures. Rents are a key component of the government’s consumer price index, which increased 9.1% from a year ago in June, and New York is the nation’s largest rental market.
The continued price pressure in Manhattan rentals could add to higher inflation in the months ahead, and put more pressure on the Federal Reserve to raise rates in an attempt to tame prices.
“There are no signs of a slowdown, at least not yet,” said Jonathan Miller, CEO of Miller Samuel.
Miller said higher mortgage rates and fears of a housing downturn are driving more potential buyers into the rental market.
At the same time, the supply of Manhattan apartments available for rent, which ballooned during the pandemic, is now near record lows. The vacancy rate at the end of June was just 1.9%, with about 6,400 apartments available — down 46% from last year.

Brokers say many families and renters who left the city during the pandemic are now returning, despite concerns about high crime, taxes and troubled subways. Younger renters are also pouring into the rental market. Millennials and even some members of the Gen Z demographic are coming to the city after college or working remotely from high-rise rentals to take advantage of the city’s culture and nightlife.
“At the end of the day, they want to be in New York,” said Valirjana Gashi, a broker at Serhant. “Even some of the families that went to Miami are coming back.”
July and August are typically the biggest rental months in Manhattan as tenants look for September start dates ahead of a return to school and work. Brokers say that while open houses for sales listings are almost empty, open houses for rentals have never been more crowded.
“When a good rental comes on the market, especially downtown, there are lines down the block,” Gashi said.
Bidding wars are now routine for rentals. Gashi said one of her clients is looking at a one-bedroom downtown that’s listed at $6,000 a month — up from $5,000 a month last year. The client is offering $6,750 to try and stave off rival bidders.
She also has a client who plans to eventually buy in Manhattan but is renting in the meantime, with a budget of over $30,000 a month.
“He’s willing to spend on the rental because when the time is right to buy, he hopes to save even more on the purchase,” she said. “He thinks sale prices are about to come way down.”

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The newest electric vehicle from Hyundai Motor is a sedan with a unique bubbly design.
The South Korean automaker unveiled the Ioniq 6 Wednesday night as an “electrified streamliner,” a nod to its aerodynamic design.
Hyundai is expected to begin production of the car at a factory in South Korea during the third quarter. It is scheduled to go on sale in the U.S. during the first quarter of next year.

Hyundai Ioniq 6

The newest electric vehicle from Hyundai Motor is a sedan with a unique bubbly design.
The South Korean automaker unveiled the Ioniq 6 Wednesday night as an “electrified streamliner,” a nod to its aerodynamic design that Americans may know best through the design of an Airstream trailer. It’s a major shift in styling from the well-received Ioniq 5 EV, which went on sale late this year.

Hyundai is currently selling the second-most EVs in the U.S. behind Tesla.
“Each Ioniq vehicle will have different design character … we all want our designers to always connect with customers on the emotional level,” said SangYup Lee, executive vice president and head of Hyundai design, during a virtual media event.

Hyundai Ioniq 6

Hyundai is expected to begin production of the car at a factory in South Korea during the third quarter. It is scheduled to go on sale in the U.S. during the first quarter of next year.
Pricing of the vehicle was not announced.
Hyundai expects the car to achieve 610 kilometers (380 miles) of range on a single charge, based on global standards. However, those testing standards differ from those in the U.S., meaning the U.S. range will likely be different.

The interior of the vehicle features two 12-inch screens for driver information and entertainment.

Hyundai Ioniq 6

The Ioniq 6 will be the third all-electric vehicle in the U.S. under the Hyundai brand, following the Kona and Ioniq 5 crossovers. The South Korean automaker also owns Kia, but the brands operate independently in the U.S.
Industry research firm LMC Automotive expects Hyundai, including Kia and its luxury Genesis brand, to sell the second-most EVs in the U.S. this year, behind only Tesla, which delivered more than 936,000 EVs globally last year (the company does not break its deliveries down by region).
Through the first six months of the year, Automotive News reports, Hyundai, Kia and Genesis brands sold a combined 34,518 EVs in the U.S. — behind Tesla’s sales, according to the report, but ahead of the 22,979 EV sales from Ford Motor.

Hyundai Ioniq 6

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CNBC’s Jim Cramer on Wednesday said that while consumer prices rose sharper in June than Wall Street expected, the Federal Reserve is close to beating inflation.
“I think we have a real shot at putting in … a short term bottom here given that the Federal Reserve can probably put through one more big rate hike and then declare victory,” the “Mad Money” host said.

CNBC’s Jim Cramer on Wednesday said that while consumer prices rose sharper in June than Wall Street expected, the Federal Reserve is close to beating inflation.
“I think we have a real shot at putting in … a short term bottom here given that the Federal Reserve can probably put through one more big rate hike and then declare victory,” the “Mad Money” host said.

“I know it sounds crazy to say we’re winning the war against inflation when the CPI, consumer price index, was up 9.1% last month, but you know what, I believe it,” he added.
The consumer price index, which measures prices of everyday U.S. goods and services, climbed 9.1% in June from a year earlier, according to the Bureau of Labor Statistics.
The major indices closed down slightly on Wednesday after teetering during the trading session.
Cramer said that he believes inflation has peaked despite the red-hot inflation report due to recent declines in oil and other commodities.
“I don’t think aluminum, copper and steel and lumber should necessarily be considered consumer-oriented, but I will say this: look out below. These commodities are all in crash mode,” he said.

He added that other indicators that consumers are starting to decrease their spending, including the inventory glut challenging retailers and the cooldown of the housing market, support his theory.
“All of this tells me that anyone who looked at today’s CPI number and said, ‘hey, I’ve got to sell because here comes the big one, time for the Fed to raise rates to 10%’ … I think you’re going to be dead wrong,” he said.

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CNBC’s Jim Cramer on Wednesday said that the euro could rise in value in the near future, relying on analysis from DeCarley Trading technician Carley Garner.
“The charts, as interpreted by Carley Garner, suggest that the euro’s ready to rebound — if not now then very soon,” the “Mad Money” host said.

CNBC’s Jim Cramer on Wednesday said that the euro could rise in value in the near future, relying on analysis from DeCarley Trading technician Carley Garner.
“The charts, as interpreted by Carley Garner, suggest that the euro’s ready to rebound — if not now then very soon — and I wouldn’t be surprised if she’s right and it helps take the whole stock market up with it,” he said.

The U.S. dollar and euro on Tuesday reached parity, or the same worth, for the first time in 20 years. While the U.S. dollar index has been on the rise, the euro zone’s energy supply crisis and economic problems have put pressure on the euro’s value.
To explain Garner’s analysis, Cramer first examined the monthly chart of the euro-to-dollar exchange rate over the last two decades.

Arrows pointing outwards

While the euro was trading at $1.60 in early 2008, it has stayed between $1.05 and $1.20 for most of the last ten years, Cramer said. He added that Garner believes the current sell-off is noteworthy, since the currency typically doesn’t dip below $1.03.
“With so [many] traders trying to push the euro down. … She wouldn’t be surprised if there’s one last probe down to crush the remaining bulls before the thing can bottom and start rallying,” he said.
That means the euro could briefly touch 97 or 98 cents compared to the U.S. dollar, according to Cramer.

“Once the narrative shifts, Garner’s predicting a swift rally. Back in 2017, the euro dipped below $1.05 … but within a year it was back to above [$1.25],” he added.
For more analysis, watch Cramer’s full explanation below.

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United and its pilots’ union will continue talks on a new contract.
The airline was the first to reach a tentative agreement with its pilots’ union.

Source: Getty Images

United Airlines and its pilots’ union are going back to the negotiating table for a new contract, a setback for the carrier after it was the first to reach a tentative agreement since the pandemic started.
The United branch of the Air Line Pilots Association acknowledged Wednesday that the current agreement “fell short” of some pilots’ expectations.

The tentative agreement, which included 14% raises within 18 months, was first unveiled on June 24. Voting by rank-and-file pilots was set to close this Friday.
“Management has agreed to reengage in discussions to remove objectionable items and work with us to reach a new, improved agreement,” said Capt. Mike Hamilton, chair of the United Master Executive Council, part of ALPA.
The delay could make waves at other airlines and their pilots’ unions, which will often compare contracts from other carriers. American Airlines, Delta Air Lines and Southwest Airlines are among the U.S. carriers currently in contract talks with pilot unions.
The vote could be delayed up to three months to continue talks, and the union will poll its members on how to improve the agreement, it said.
United declined to comment.

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Fueled by pent-up consumer demand, low vehicle inventories and rising sales of luxury vehicles, Cox Automotive reports the average transaction price of a new vehicle last month was $48,083.
That average price was a 1.9% increase from May and higher than the previous high of $47,202 set in December.
The spending for a new vehicle was part of a broader increase in consumer spending in June, according to the Bureau of Labor Statistics.

A sign advertises to purchase cars at a used car dealership in Arlington, Virginia, February 15, 2022.
Saul Loeb | AFP | Getty Images

DETROIT – If investors are looking for signs of a recession or weakening consumer spending, they can skip over new vehicle prices, which hit a new record in June.
Fueled by pent-up consumer demand, low vehicle inventories and rising sales of luxury vehicles, Cox Automotive reported this week the average transaction price of a new vehicle last month was $48,083 – a 1.9% increase from May and higher than the previous record of $47,202 set in December.

The average sale price was part of a broader increase in consumer spending in June, according to the Bureau of Labor Statistics. The consumer price index, a measure of everyday goods and services, soared 9.1% from a year ago, above the 8.8% Dow Jones estimate.
Much of the inflation rise came from gasoline prices, which increased 11.2% on the month and just shy of 60% for the 12-month period. New and used vehicle prices posted respective monthly gains of 0.7% and 1.6%, according to the BLS.

Cox said June continued this year’s streak of consumers paying more than the manufacturer’s suggested retail price, or “sticker price,” for a new vehicle, according to Cox. The automotive research firm reported new vehicles from Honda Motor, Kia and Mercedes-Benz transacted on average between 6.5% and 8.7% over MSRP.
–Jeff Cox contributed to this report.

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Apparel prices rose 5.2% in June on a year-over-year basis, according to a closely watched inflation report.
Shoppers are paying more to refresh their wardrobes, even as retailers such as Walmart, Target and Gap mark down prices to eat away at excess inventory.
Formal attire, in particular, has picked up again as Americans head to weddings or spend more time back at the office, one industry analyst said.

A customer shops for shirts at an American Eagle Outfitters store in San Francisco.
David Paul Morris | Bloomberg | Getty Images

Excess inventory has racked up in many retailers’ warehouses and stores. But shoppers are still paying more as they refresh the closet.
Apparel prices rose 0.8% in June compared to May, and 5.2% year over year, according to the Bureau of Labor Statistics’ consumer price index Wednesday. Overall, the inflation gauge, which includes everyday items such as food and gas, rose a higher-than-expected 9.1% from a year earlier.

Apparel trends are another mixed metric as economists and industry-watchers try to gauge the strength of the consumer and U.S. economy. In recent weeks, many prominent companies and investors have warned of a recession. Retailers, including Target, Gap and Walmart, announced plans for more markdowns to get rid of unwanted merchandise. The moves were expected to be deflationary.
Yet apparel sales and prices — at least so far — are topping last year’s levels. The labor market remains robust, too: The jobs report for June defied recession fears, as the unemployment rate remain unchanged and payrolls beat expectations.
“It’s all about experience,” said Kristen Classi-Zummo, an industry analyst who covers fashion apparel for The NPD Group. “A return to getting back out is really what’s driving the apparel growth. This experiential re-emergence that we still didn’t see fully last year.”
Some retailers have reported that, too. Levi Strauss & Co.’s revenue grew 15% year over year for the quarter ending May 29. Yet its value brands, which drive a small amount of the company’s overall sales and are sold by Walmart, Target and Amazon, saw mid-single-digit declines from a year ago, CEO Chip Bergh said.
Walmart saw a split in its apparel category, too. It aggressively marked down some of its clothing in the fiscal first quarter, as shoppers pulled back on discretionary merchandise. Yet the company’s merchandising chief, Charles Redfield, told CNBC in early June that the big-box chain could not keep up with demand for its more fashion-forward and higher price point brands, such as sundresses and tops from Scoop.

An abundance of the wrong stuff

Apparel sales in the U.S. grew 5% year over year for the period from January through May, and grew by 13% versus the same time in pre-pandemic 2019, according to NPD, a market research firm.
Formal attire, in particular, has picked up again as Americans head to weddings or spend more time back at the office, she said. When shopping for those occasions, some consumers are willing to spring for items that aren’t on sale.
Sales of women’s dresses grew by 42% year over year from January through May, according to NPD. That was also 14% higher than in 2019, before the pandemic.   
That shift in consumer preference has hurt retailers that stocked up on the wrong things. Gap, which announced this week that CEO Sonia Syngal stepped down, said in its most recent earnings report that customers didn’t want the company’s many fleece hoodies and active clothes. It also had a mismatch of sizes of shoppers, as it made a push into plus-sized.
Abercrombie & Fitch and American Eagle Outfitters both reported a steep jump in inventory levels, up 45% and 46%, respectively, from a year ago from a mix of items not selling and supply chain delays easing.
Typically, an abundance of inventory sparks higher levels of sale promotions — something that’s already playing out at Walmart and Target, not just in apparel, but also in other categories such as home goods. June’s retail sales numbers, another closely watched economic indicator, will be reported by the Commerce Department on Friday.
Apparel is showing some signs of a pullback, however. As apparel sales rise by dollars, units have fallen about 8% versus the same year-ago time period, according to NPD — something that could drag down sales over time.
A survey by equity research firm Jefferies in June found that about 35% of consumers plan to or are currently buying less apparel.
There was a split between consumers in the survey, too. Those making $100,000 or more a year said they planned to or were currently spending less on services, such as restaurants and travel. Those with lower incomes were more likely to report they were already cutting back on apparel and groceries.

‘Tale of two consumers’

A year ago, apparel retailers had several factors that wound up working in their favor. Americans had extra dollars from stimulus checks. Some were still wary of spending those dollars on bigger trips, dining out or other services because of Covid concerns. Supply chain snarls limited inventory levels.
Retailers had a chance to “reset” and break a “vicious sales cycle,” Classi-Zummo said. That all contributed to retailers selling more apparel at full price.
Now, she said, apparel retailers have had to pass on more of their costs — such as higher prices for raw materials used to make clothing or gas needed to transport it. That’s driven up price tags on shirts, dresses and more.
Higher-income shoppers are helping buoy apparel sales, as they still have the means and willingness to pay for pricier brands and clothing items sold for full price. That may partially explain the inflated prices of apparel, Classi-Zummo said.
For instance, swimwear sales overall have declined after surging last year. But this year, the fastest growing segment is swimwear priced at $100 and over. Swimwear priced under $70 is driving the year-over-year drop, NPD found.
“There’s a bit of a tale of two consumers,” she said. “A lower-income household consumer might be thinking twice about an apparel purchase, whether it’s on sale or not. A higher-income consumer has not been affected yet — they’re still buying at a higher rate. The luxury market has still been on fire.”
—CNBC’s Lauren Thomas contributed to this reporting

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