Economy Notes From the Final Numbers for 2023

The US Bureau of Labor Statistics showed the December 2023 inflation increase of 0.3% over November prices, led mostly by increases in shelter, gasoline, and electricity. This closed 2023 with a 3.4% inflation rate (unadjusted), much lower than the 6.5% in 2022, and the recent spike of 7% in 2021. The drop in the LA-Long Beach-Anaheim region showed a bump up from November’s 2.8% to end the year at an annualized rate of 3.5%. This is still above the Fed’s target of a 2% annualized inflation, indicating the earlier forecast of only nominal mortgage rate relief through 2024.

Additional good news, for many who are not in the market for low mortgage rates, were the unemployment numbers for January 2023. The 3.7% rate of unemployment extends to two years the figure stayed below 4%. This smashed to prediction that 2023 would end with a 4.6% unemployment rate.

Personal income increased 0.3% in December, to finish 2023 with month-over-month improvement for the period. 

Taken together, these numbers support the belief that we are likely to avoid a recession and not see significant interest rate declines through 2024. Fed Chair Jerome Powell, as pointed out in a February 2 NYT article stated that the strong employment numbers in themselves shouldn’t be a problem for interest rates – so long as inflation continues the path downward.

Please give me a call at Premier Funding Network to answer any of your mortgage questions at 714-283-9900.