Did You Know? 10-12-2022

DID YOU KNOW?

10/12/2022

• The global economy will expand by 2.7% in 2023, down from 3.2% this year and 6% in 2021, according to the latest World Economic Outlook. The new forecast represents a reduction of 0.2 percentage points from its July estimate. The IMF left unchanged its 2023 U.S. growth projection at 1%, but scaled back its 2022 forecast to 1.6%, down from its 2.3% estimate in July, and down significantly from 5.7% in 2021. The current global economic slowdown is expected to wipe out $4 trillion from global growth between now and 2026. (WSJ)
  
  
• While new foreclosure actions rose 15% from July to August, they were still 44% below pre-pandemic levels. (BLACKKNIGHT)
  
  
• These are some of the biggest global risks currently:
  
  

  1. Extended (or worse, expanded) conflict in the Russia – Ukraine War.
     
     
  2. Continued high inflation.
     
     
  3. High interest rates trigger a recession.
     
     
  4. Continued energy shortages.
     
     
  5. A China banking-fueled real estate bust.
     
     
  6. Another large COVID outbreak and lockdowns
     
     
  7. Weather-related crises.
     
     
• Payments to escrow and title are down sharply. Median mortgage payments and rental payments are up over 8%. After-tax income/wages after-tax payments for salaries are up 5.5%. Spending is up 4.5% on credit cards indicating consumers are spending less than they are earning. While down from the torrid spending habits of 2020-21, these numbers are in line with ‘normal’. There is a pulling back on housing, furniture, and goods, but lots of spending is on travel, and consumers intend to travel a lot over the holidays. Credit card spending outside of the US was up 29%. Credit card spending is a good indicator of discretionary spending. (Bofa)