Economy

Demand for single-family rental homes is soaring, pushing prices to record highs, as Americans begin to emerge from two years of pandemic hardship and return to big cities.
Single-family rents gained a record 12.6% year over year in January, according to a new report from CoreLogic. That compares to an increase of 3.9% in January 2021.
Single-family rents soared 38.6% in Miami, up from just 2% the previous January.

A house for rent in Corona Del Mar, California.
Scott Mlyn | CNBC

Demand for single-family rental homes is soaring, pushing prices to record highs, as Americans begin to emerge from two years of pandemic hardship and return to big cities.
Single-family rents gained a record 12.6% year over year in January, according to a new report from CoreLogic. That compares to an increase of 3.9% in January 2021.

Every major market saw increases, but cities in the Sun Belt saw truly stunning numbers.
For example, single-family rents soared 38.6% in Miami, up from just 2% the previous January. Orlando, Fla., and Phoenix were next in line, with gains of 19.9% and 18.9%, respectively, as Americans continued their migration to warmer parts of the nation. The Washington, D.C., area saw the lowest annual growth in rent prices — but they were still up 5.6%.
“Single-family-rent growth extended its record-breaking price growth streak to 10 consecutive months in January,” said Molly Boesel, principal economist at CoreLogic.
Demand for single-family rentals is so strong partly because the market for potential homebuyers is so tough. Not only are home prices up 19% from a year ago, but the number of listings are still historically low. That means homes that are listed often sell in a matter of weeks, if not days.
Rent growth is strongest in the middle of the market, according to the report. CoreLogic looked at four tiers of rental prices and found the weakest growth on the edges:

Lower-priced (75% or less than the regional median): up 12%, compared with 3% in January 2021
Lower-middle priced (75% to 100% of the regional median): up 13.3%, from 3.2% in January 2021
Higher-middle priced (100% to 125% of the regional median): up 13.4%, from 3.6% in January 2021
Higher-priced (125% or more than the regional median): up 12.2%, from 4.5% in January 2021

Apartment rents also are still rising, but the gains are moderating slightly, as more supply comes on the market to meet demand.
But the same is not true for the single-family rental market. While more builders and investors opt for build-for-rent projects, the available inventory is still on the low side, with building hampered by supply chain disruptions and the industry labor shortage.

WATCH LIVEWATCH IN THE APP More

LONDON (Reuters) – Andrew Bailey is leading the Bank of England into one of its most complex challenges in decades while facing criticism of his record in a key part of the job – how to explain his thinking and that of the central bank. Bailey marks two years as governor on Wednesday after succeeding Mark Carney in March 2020, just as the world’s fifth-biggest economy was sliding into its historic COVID-19 slump.The BoE cut interest rates a few days before Carney left and did so again four days after Bailey took over. It also expanded its bond-buying scheme by 200 billion pounds ($260 billion).The swift response helped settle near-panic in financial markets and earned the BoE plaudits.But since then Bailey has drawn criticism from investors, trade unions and by some people who have worked with him. The International Monetary Fund said in late February that “predictability and clear communications about forward guidance would improve policy effectiveness” by the BoE.Also last month, Bailey angered unions and was rebuffed by Prime Minister Boris Johnson’s spokesman when he called for pay restraint in the face of fast-rising inflation.Other BoE policymakers tried to shift the focus to pricing decisions by companies but Bailey hit the headlines again when he struggled to answer a question about his own pay – 575,000 pounds including pension contribution – from a lawmaker.It was not the first messaging problem for Bailey, whose career has mostly been as a financial regulator.Late last year, many investors thought comments he made meant the BoE was poised to tighten monetary policy. Goldman Sachs (NYSE:GS) and other banks predicted a first rate hike in November.When the Monetary Policy Committee kept rates on hold, British government bond prices jumped by the most since the 2016 Brexit shock. Sterling fell by the most in over 18 months.Many investors were also caught out when the BoE did start to raise rates in December.”He has shown a lack of appreciation for the impact that his comments can make in the markets,” Oliver Blackbourn, portfolio manager on a UK-based multi-asset team at Janus Henderson Investors, said. “There is a really fine line in the way central banks communicate. I think that they have completely misjudged that at times.”Market forecasts for UK interest rates to peak in 18-24 months’ time reflected worries about the BoE managing to control inflation without starting a recession, Blackbourn said.Britain faces a severe cost-of-living squeeze as inflation looks set to rise above 8% – four times the BoE’s target – as the fallout from Russia’s invasion of Ukraine adds to a surge in energy prices and COVID-19 supply-chain bottlenecks.The BoE is expected on Thursday to announce a third interest rate since December.The BoE’s press office declined to comment when contacted by Reuters for this story.Bailey has defended his comments in the run-up to November’s policy decision, saying he never pre-committed to any move.MIXED MESSAGESBailey’s messaging problems began in 2020 when he said the BoE’s bond-buying, as well as helping to get inflation back up to target, would smooth the government’s borrowing needs.Some commentators said that blurred the BoE’s independence.Other top BoE policymakers then stressed that the bond-buying was increased purely to meet the inflation target. But last July, the Economic Affairs Committee in the upper house of Britain’s parliament said Bailey’s comments were likely to have added to the perception that the jump in bond-buying was at least partially motivated to help finance the government.”If this perception continues to spread, the Bank of England’s ability to control inflation and maintain financial stability could be undermined significantly,” the committee said in a report.People who have worked with Bailey at the BoE said he sometimes made unprepared comments, in contrast to Carney who rehearsed more before speaking in parliament and to the media.Carney had his own messaging problems, chiefly the way his trademark “forward guidance” about the likely path of interest rates on occasions was overtaken by shifts in the economy.But the Canadian was so focused on the details that his aides made sure he knew the price of milk and bread in case he was asked, a level of preparation that Bailey does not follow, a senior BoE official said.Bailey is not the only top finance official who has struggled to communicate. The leaders of central banks including the U.S. Federal Reserve have had to backtrack on their view that the jump in inflation was probably transitory.Investors have also been wrong-footed by European Central Bank President Christine Lagarde’s attempts to finesse divisions within the ECB.But a person familiar with debates inside the BoE said Bailey could be stubborn about sticking to his own view, even when colleagues more experienced than him on macroeconomic policy issues tried to change his mind. Such differences included Bailey’s linking of bond purchases to the government’s fiscal policy in 2020 and publicly voicing concern about the size of the central bank’s debt stockpile, something colleagues warned could add to the perception that the BoE’s independence was being weakened, the person said.Another BoE official defended Bailey, saying he prepared extensively for all his duties and that he spent no less time getting ready for public events than any previous governor. Bailey liked to provide direct answers to direct answers and also made plenty of time available to talk to colleagues and staff, that official said.The communications challenge for Bailey is only likely to grow in his third year as governor as inflation and recession risks mount.”Looking forward, given the way markets are worried about policy mistakes and the way inflation and growth outlooks are evolving, investors could really do with a steadier hand on the tiller from here,” Blackbourn of Janus Henderson said. ($1 = 0.7681 pounds) More

The G7 nations announced on Friday they were revoking Russia’s “most favoured nation” (MFN) status, clearing the way for them to hit Russian imports with higher tariffs than applied to other WTO partners or to ban certain Russian goods entirely.European Commission vice-president Dombrovskis said in a statement that Albania, Australia, Iceland, Moldova, Montenegro, New Zealand, North Macedonia and South Korea would also stop according Russia MFN status. Dombrovskis said the move deepened Russia’s position as a pariah in the eyes of the global community, adding the western group would also suspend accession of Russian ally Belarus to the World Trade Organization. More

COLOMBO (Reuters) -Opposition leaders led a march of hundreds of protesters through Sri Lanka’s main city of Colombo on Tuesday as anger grows over a worsening economic crisis that has brought fuel shortages and spiralling food prices.President Gotabaya Rajapaksa’s government said it will begin talks next month with the International Monetary Fund (IMF) for assistance, while Finance Minister Basil Rajapaksa flew into New Delhi to sign a $1-billion credit line to tackle the situation.”Even after working about 14 to 16 hours a day, we still can’t make enough money to support our families,” said rickshaw driver Nissanka Gunewardena, one of those who marched on a tree-lined boulevard in central Colombo.”How can anyone live like this?” added Gunewardena, 34, who has two young children and wore a black headband that read “Gota Go Home”, referring to the president. Historically weak government finances, badly timed tax cuts and the COVID-19 pandemic, which hit the lucrative tourism industry and foreign remittances, have wreaked havoc on the economy, leading to a currency devaluation last week.Sri Lanka’s foreign exchange reserves have fallen 70% in the last two years to about $2.31 billion, leaving the Indian Ocean island nation struggling to pay for essential imports, including food and fuel.Last week’s devaluation stoked further inflation, inflicting more distress on Sri Lankans battling rolling power cuts and fuel shortages.”We have told the government time and again to change their policies,” said Eran Wickramaratne, a leader of the opposition alliance, Samagi Jana Balawegaya.The government, led by the Rajapaksa brothers, another of whom is Prime Minister Mahinda Rajapaksa, has pushed Sri Lanka’s 22 million people deep into hardship, he added.”This is the only country in the world where the president and the finance minister have no idea about economic management.” IMF TALKSAfter months of resistance to seeking IMF help, Rajapaksa’s government said on Tuesday it would begin talks with the multilateral lender next month after cabinet authorised the finance minister to draw up proposals.Cabinet spokesman Ramesh Pathirana said the government would firm up plans on IMF assistance in the next few weeks as the finance minister prepares to visit Washington D.C. in mid-April for the discussions.In New Delhi this week, the finance minister will sign the $1-billion credit line previously agreed with India to bring in key imports of medicine, food and fuel. He will also meet India’s finance and energy ministers.”Now we are all very disappointed,” said Gunewardena, the protester, adding that he had voted for Rajapaksa in the last presidential election in 2019.”We think this government should go. We want change.”(Reporting Uditha Jayasinghe, Writing by Devjyot Ghoshal; Editing by Jacqueline Wong and Clarence Fernandez) More

The auction’s limit was set at 3 trillion roubles. The bank also said it had raised 1.5 trillion roubles at a one-day deposit auction. ($1 = 112.2470 roubles) More

Investing.com — China’s stock market continues to tank on fears of a Covid-driven slowdown and political pressure from the U.S. on Beijing. China again refused to condemn Russia’s invasion of Ukraine after seven hours of ‘intense’ talks with the U.S. officials on Monday. Russian bombardments intensify, and European data show growing evidence of stagflation. The Fed’s two-day policy meeting starts, and oil is back under $100 a barrel as OPEC prepares to put out its monthly report. Here’s what you need to know in financial markets on Tuesday, 15th March.1. Russian bombardment intensifies after inconclusive talksRussia’s air and artillery bombardment of Ukrainian cities intensified after a day of intense diplomacy that ultimately yielded little. Chinese officials repeated that they want to avoid Western sanctions but again refused to condemn Russia’s invasion.Russian attacks have meanwhile spread to western Ukraine, while at least two of its drones have violated the airspace of NATO members Poland and Romania.  The European Union extended its sanctions list late on Monday and also imposed a ban on exports of luxury goods to Russia. That led the stock prices in that sector to underperform on what was, in any case, a bad morning for European stocks, marked by a bad miss on the key German ZEW sentiment indicator and another overshoot in French inflation.2. U.S. PPI due as Fed meeting starts; U.K. jobs data keep rate hike on trackInflation is on the radar later in the U.S. too, as February’s producer price inflation data are released. Analysts expect a 0.9% rise on the month, taking the annual rate up to 10.0% – a somber backdrop for the start of the Federal Reserve’s two-day policy meeting.The Fed is widely expected to raise the target for the fed funds rate by 25 basis points, its first rate hike since 2018. A more aggressive hike of 50 basis points is seen as less likely, following hints from Fed Chair Jerome Powell at his Congressional testimony a couple of weeks back. The sharp drop in oil prices in the last couple of days may have ended what little risk there was of such an eventuality.In the U.K. too, economic data continued to support the case for what would be a third straight interest rate rise when the Bank of England meets later this week. The jobless rate fell below its pre-pandemic level in February, while average earnings growth accelerated well above expectations.3. Stocks set to open lower  U.S. stock markets are set to open mostly lower later, under pressure from weakness in both Europe and China (see below).By 6:15 AM ET, Dow Jones futures were down 81 points, or 0.3%, while S&P 500 futures were down 0.2% and Nasdaq 100 futures were effectively unchanged. That reverses the pattern of Monday, when the tech-heavy Nasdaq underperformed.In addition to the PPI, the New York Empire State Manufacturing survey is also due, while Dole heads a sparse earnings calendar.Other stocks likely to be in focus include Nielsen (NYSE:NLSN), after reports that it’s in talks to sell itself to a consortium including Elliott Management.4. Chinese stock rout deepens; Covid wave overtakes strong dataChina’s stock rout deepened, as investors continued to flee from a growing number of risks.Talks between U.S. and Chinese officials on Monday did little to banish fears that China could get drawn into the web of western sanctions as a result of its continued support for Russia’s invasion of Ukraine, while authorities have now locked down over 45 million people in two big industrial hubs at opposite ends of the country to stop the spread of Covid-19.Technology stocks remain particularly stressed: the Hang Seng TECH index lost another 11% on Tuesday and has now unwound all of its pandemic-era gains. Other benchmark cash indices lost between 2% and 5%.That all happened despite data showing that both industrial production and retail sales were ahead of expectations in February. The data have been somewhat overtaken by events in the meantime. The yuan weakened to a two-month low.5. Oil back under $100 on China slowdown fears; API inventories, OPEC monthly report dueCrude oil prices fell below $100 a barrel for the first time this month, and spikes in other commodities also continued to unwind on fears of a Chinese economic slowdown due to its problems containing the coronavirus.  Such fears are outweighing fresh signs of geopolitical tension, with agents suspected of having links to Iran having launched the biggest-ever cyberattack on Israel late on Monday.By 6:25 AM ET, U.S. crude futures were down 5.9% at $96.97, while Brent was still holding just above the $100 level at $100.70, down 5.8%.The U.S.-based American Petroleum Institute will release its weekly inventory assessment at 4:30 PM ET, while the Organization of Petroleum Exporting Countries will release its monthly report on the global oil market. It’s expected to repeat the bloc’s message that there is no physical shortfall of supplies (despite failing to meet its own production targets in recent months). More

WASHINGTON (Reuters) – New economic projections from the Federal Reserve this week will show how far and how fast policymakers see interest rates rising this year, in a first test of the impact of the Ukraine war and surging inflation on the coming shift in U.S. monetary policy. The Fed’s policy-setting committee is expected to raise borrowing costs by a quarter of a percentage point at the end of its two-day meeting on Wednesday, a session that will set the tone for the central bank’s reaction to a war-driven energy shock that is colliding with an end-of-pandemic economic reopening and strong consumer demand.The latest quarterly economic projections, due to be issued along with a policy statement at 2 p.m. EDT (1800 GMT) on Wednesday, will show what officials anticipate in terms of key indicators, including GDP growth, inflation and unemployment. In particular, updated outlooks will signal how aggressive policymakers may be in raising interest rates and whether that could jeopardize an expected record-setting run of low unemployment.Fed Chair Jerome Powell is scheduled to hold a news conference shortly after the materials are released to discuss the meeting and outlook.As of December, policymakers saw a relatively benign battle with inflation that required only modest rate increases and no change to an unemployment rate seen lodged at 3.5% through 2024 – an employment outcome not seen since the early post-World War II boom in the 1950s.This week’s meeting “is complicated” by the need to respond quickly to inflation, now running at a 40-year high, but also by a desire to control prices without increasing the unemployment rate, said Steve Englander, head of macro research for North America at Standard Chartered (OTC:SCBFF) Bank. Fed officials in December projected that raising the benchmark overnight interest rate, or federal funds rate, by a total of three-quarters of a percentage point would be enough in 2022 to start easing inflation back towards the 2% target. Since then, price increases have accelerated – the Fed’s preferred inflation measure is currently 6% – and the outbreak of war in Europe has added a new set of risks. But Englander said Fed officials may still shy from the sort of restrictive policy that might raise the risk of recession, and rising joblessness, in coming years.”We are not convinced by the ultra-hawkish arguments” that see the Fed raising rates at each of its remaining seven policy meetings this year or signaling, at this point anyway, that rates will need to become restrictive to win the inflation fight, he said. HAWKISH MESSAGEEnglander said he expects the Fed will signal rate increases totaling 1.25 to 1.50 percentage points this year, which is less than many investors currently expect. The median estimate of economists polled by Reuters also projects the Fed will lift the target federal funds rate from the current near-zero level to a range of between 1.25% to 1.50% by the end of 2022, equivalent to five quarter-percentage-point increases. Investors in futures contracts linked to the target federal funds rate currently see the Fed hiking borrowing costs at a slightly faster pace to end the year with its policy rate between 1.75% and 2.00%.Since the onset of the COVID-19 pandemic the Fed’s projections for the U.S. economy have been out of sync with how things actually evolved.The unemployment rate fell faster, growth accelerated more quickly, and, perhaps most notably, the rate of inflation surged well beyond what was anticipated.As the Fed’s projections caught up with the economy, the policy outlook adjusted as well, with officials penciling in more and more rate hikes for the coming year and beyond.Yet as of December they held firmly to the hope of a “soft landing.”The federal funds rate would only need to rise to around 2.10% by the end of 2024 for inflation to ease, a rate that is low by historic standards and loose enough to keep economic growth above trend and the unemployment rate at a steady 3.5% through 2024.It may not all look so rosy when the dust settles on Wednesday.”Growth and unemployment should be revised lower while headline and core (personal consumption expenditures) inflation get revised higher … We expect a hawkish message from Chair Powell, who will likely reiterate that the Fed needs to get serious about price stability,” Bank of America (NYSE:BAC) analysts wrote. More

Pressure on the UK’s labour market increased over the winter, with official data showing the number of unfilled jobs rose to a record of more than 1.3mn as people continued to leave the workforce.Businesses remained keen to hire. The Office for National Statistics said on Tuesday that the unemployment rate had fallen to 3.9 per cent in the three months to January, down from 4.1 per cent in the previous quarter, while the employment rate had increased by 0.1 percentage point to 75.6 per cent.The data showed the strains rising inflation is putting on both households and businesses. The ONS said average earnings excluding bonuses were 3.8 per cent higher than a year earlier over the November to January period — equivalent to a real terms fall of 1 per cent, after taking account of rising prices.But strong bonus payments mean that total pay had just kept pace with inflation, rising by 0.1 per cent from a year earlier.Employment was a full percentage point below its pre-pandemic level, because of an increase in the number of people who were economically inactive — neither in work nor looking for a job.The ONS said the inactivity rate stood at 21.3 per cent, 1.1 percentage points higher than its pre-pandemic level, with the latest increase driven by older workers opting out.Suren Thiru, head of economics at the British Chambers of Commerce, said record levels of vacancies were a sign of “chronic imbalances in the UK labour market”, with recruitment difficulties set to remain a drag on economic output — although he also said hiring could slacken soon due to rising cost pressures, impending tax rises and a weakening economic outlook.Tony Wilson, at the Institute for Employment Studies, said unemployment was falling only because people were leaving the labour market “at a worryingly high rate”, despite record vacancies, with the exodus led by older workers and 100,000 fewer in the workforce than three months earlier.“The huge increase in older workers exiting the labour market suggests we may be reaching the limits of Britain’s jobs recovery,” said Nye Cominetti, senior economist at the Resolution Foundation, adding that wage growth in January had been stronger among high earners, leaving those who could least afford it more exposed to rising living costs.Kitty Ussher, chief economist at the Institute of Directors, said the strength of bonuses suggested pay was more likely to be keeping up with inflation in the private sector than for public sector workers, but warned that the bigger concern was the rise in economic inactivity among the over 50s.People who had built up savings earlier in their career “may have sufficient resources to weather the cost-of-living storm”, she said, but many newly inactive people who had worked in low pay sectors could be hit by rising living costs without yet qualifying for a pension.

Yael Selfin, chief economist at KPMG, said the data was showing “the limits to which vacancies can be filled by those re-entering the labour market”, warning that staff shortages could prove enduring if demand remained strong.But Samuel Tombs, at the consultancy Pantheon Macroeconomics, said the labour market “will not tighten materially further from here”, because demand for staff would be hit by April’s increase in employers’ national insurance contributions, and the workforce should start to grow again as immigration recovered and the squeeze on real wages impelled people to work longer hours.Mims Davies, employment minister, said that with vacancies at record levels, the government’s focus would be on “helping people build their skills and improve their prospects by moving into work”, while Rishi Sunak, chancellor, said the government was providing direct support worth £20bn over two years to help people with cope with the rising cost of living. More