Monday , April 6 2020
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Sunday Night Futures

23 hours ago

Weekend:• Schedule for Week of April 5, 2020Monday:• No major economic releases scheduled.From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 37 and DOW futures are up 275 (fair value).Oil prices were up over the last week with WTI futures at $26.19 per barrel and Brent at $31.97 barrel.  A year ago, WTI was at $63, and Brent was at $70 – so oil prices are down by more than 50% year-over-year. Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $1.92 per gallon. A year ago prices were at $2.73 per gallon, so gasoline prices are down 81 cents per gallon year-over-year.

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April 5 Update: US COVID-19 Test Results

1 day ago

Note: the large increase yesterday in test results reported was due to California working through the backlog of pending tests.Test-and-trace is a key criteria in starting to reopen the country.   My current guess is test-and-trace will require around 300,000 tests per day at first since the US is far behind the curve.  Some scientists believe we need around 800,000 tests per day.Notes: Data for the previous couple of days is updated and revised, so graphs might change.Also, I’m no longer including pending tests.  So this is just test results reported daily.There were 138,243 test results reported over the last 24 hours. Click on graph for larger image.This data is from the COVID Tracking Project.The percent positive over the last 24 hours was 19% (red line).  The US needs enough tests to

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April 4 Update: US COVID-19 Test Results Increase; California to Increase Testing Fivefold

2 days ago

From the LA Times: Gov. Gavin Newsom said he ‘owns’ coronavirus testing lapses, announces task force In a Saturday news conference, Newsom announced a task force that he said will work toward a fivefold increase in daily testing in the state by identifying supply shortages and adding testing locations.The announcement comes as California continues to see dramatic increases in people hospitalized with the virus, with 2,300 patients in the state. Another 3,267 people hospitalized are suspected of having COVID-19, but are awaiting testing results.Overnight, the number of coronavirus patients in California’s intensive care unit beds rose nearly 11% to 1,008 people.In all, Newsom said 126,700 people have been tested in California, a state of nearly 40 million people. Of those who have been

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Schedule for Week of April 5, 2020

2 days ago

The key report this week is the March CPI.The FOMC minutes on Wednesday might be interesting.—– Monday, Apr 6th —–No major economic releases scheduled.—– Tuesday, Apr 7th —–10:00 AM ET: Job Openings and Labor Turnover Survey for February from the BLS. This graph shows job openings (yellow line), hires (purple), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS. Jobs openings increased in January to 6.963 million from 6.552 million in December.The number of job openings (yellow) were down 7% year-over-year, and Quits were up slightly year-over-year.10:00 AM: Corelogic House Price index for February.3:00 PM: Consumer Credit from the Federal Reserve.—– Wednesday, Apr 8th —–7:00 AM ET: The Mortgage Bankers Association (MBA) will release

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April 3 Update: US COVID-19 Test Results per Day; More Testing Needed

3 days ago

Germany is conducting 50,000 tests per day, and scientists are advising Germany to increase testing to 200,000 per day.The population of Germany is 83 million, about one-fourth of the US. To match Germany’s current testing level, the US needs 200,000 tests per day, and the US needs four times that many based on the advice of some scientists.The US testing shortfall continues. We need someone in charge resolving any bottleneck issues – PPE, manpower, swabs, reagents – whatever the issue, someone needs to be fixing it.Test-and-trace is a key criteria in starting to reopen the country.   My current guess is test-and-trace will require around 300,000 tests per day at first since the US is far behind the curve.Notes: Data for the previous couple of days is updated and revised, so graphs might

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AAR: March Rail Carloads down 6.0% YoY, Intermodal Down 12.2% YoY

3 days ago

Note: The graphs are six week averages, and the economy was very different at the end of March – so next month we will see a sharp decline in traffic due to COVID-19.From the Association of American Railroads (AAR) Rail Time Indicators. Graphs and excerpts reprinted with permission. A confluence of factors caused weekly average U.S. rail carloads in March 2020 to fall to their lowest level since sometime before January 1988, when our data begin. Total U.S. carloads in March 2020 were down 6.0% from March 2019 and down 3.0% from February 2020. Meanwhile, U.S. intermodal volume in March 2020 was down 12.2% from March 2019 (its biggest year-over-year percentage decline since September 2009) and down 6.3% from February 2020.The clearest example so far of the impact of the coronavirus on rail

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CDC: Seasonal Flu Activity Decreased Sharply, Now "Low"

3 days ago

Seasonal flu activity has slowed sharply, and is now low, and that will help with the rapidly increasing COVID-19 pandemic.From the CDC: Weekly U.S. Influenza Surveillance ReportLaboratory confirmed flu activity as reported by clinical laboratories continues to decrease sharply and is now low. Influenza-like illness activity, while lower than last week, is still elevated..…Nationally, the percent of laboratory specimens testing positive for influenza at clinical laboratories continued to decrease and is now low. … Recent changes in healthcare seeking behavior, including increasing use of telemedicine and recommendations to limit emergency department (ED) visits to severe illness, as well as increasing levels of social distancing, are affecting the number of persons with ILI and their

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Comments on March Employment Report

3 days ago

The March report was much worse than expected (due to uncertainty about the timing of layoffs), but the report is already "stale". The April report will be much worse with job losses in the millions (The April report will show the most job losses ever).The headline number for March was 701 thousand jobs lost, and the previous two months were revised down 57 thousand, combined. The unemployment rate increased to 4.4%. The BLS noted many issues with the employment report this month (see Frequently asked questions: The impact of the coronavirus (COVID-19) pandemic on The Employment Situation for March 2020) and it appears the unemployment rate might be a percentage point higher (but that will seem like a small error next month). Earlier: March Employment Report: 701,000 Jobs Lost (718,000

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ISM Non-Manufacturing Index decreased to 52.5% in March

3 days ago

The March ISM Non-manufacturing index was at 52.5%, down from 57.3% in February. The employment index decreased to 47.0%, from 55.6%. Note: Above 50 indicates expansion, below 50 contraction. From the Institute for Supply Management: March 2020 Non-Manufacturing ISM Report On Business® conomic activity in the non-manufacturing sector grew in March for the 122nd consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business.®The report was issued today by Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management® (ISM®) Non-Manufacturing Business Survey Committee: “The NMI® registered 52.5 percent, 4.8 percentage points lower than the February reading of 57.3 percent. This represents continued

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March Employment Report: 701,000 Jobs Lost (718,000 Lost ex-Census), 4.4% Unemployment Rate

3 days ago

From the BLS: Total nonfarm payroll employment fell by 701,000 in March, and the unemployment rate rose to 4.4 percent, the U.S. Bureau of Labor Statistics reported today. The changes in these measures reflect the effects of the coronavirus (COVID-19) and efforts to contain it. Employment in leisure and hospitality fell by 459,000, mainly in food services and drinking places. Notable declines also occurred in health care and social assistance, professional and business services, retail trade, and construction. … Federal government employment rose by 18,000 in March, reflecting the hiring of 17,000 workers for the 2020 Census….The change in total nonfarm payroll employment for January was revised down by 59,000 from +273,000 to +214,000, and the change for February was revised up by

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Friday: Employment Report

4 days ago

Friday:My March Employment Preview.Goldman’s March Payrolls preview.Friday:• At 8:30 AM ET, Employment Report for March.   The consensus is for 100,000 jobs lost, and for the unemployment rate to increase to 3.9%.• At 10:00 AM, the ISM non-Manufacturing Index for March.   The consensus is for a reading of 48.1, down from 57.3.

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April 2 Update: US COVID-19 Test Results per Day; More Testing Needed

4 days ago

The testing shortfall continues. We need someone in charge resolving any bottleneck issues – PPE, manpower, swabs, reagents – whatever the issue, someone needs to be fixing it.Test-and-trace is a key criteria in starting to reopen the country.   My current guess is test-and-trace will require around 300,000 tests per day at first since the US is far behind the curve.Notes: Data for the previous couple of days is updated and revised, so graphs might change.Also, I’m no longer including pending tests.  So this is just test results reported daily.There were 103,940 test results reported over the last 24 hours. Click on graph for larger image.This data is from the COVID Tracking Project.The percent positive over the last 24 hours was 26% (red line – going the wrong way).Test. Test. Test.

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Goldman: March Payrolls Preview

4 days ago

A few brief excerpts from a note by Goldman Sachs economist Spencer Hill:We estimate nonfarm payrolls declined 180k in March, below consensus of -100k….We estimate the unemployment rate rose three tenths to 3.8%, with risks skewed towards a larger increase (consensus 3.8%).…While we look for a weaker-than-consensus report tomorrow, the March employment numbers are already fairly stale and insignificant in our view, because the April report will likely show job losses in the millions.emphasis added

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March Employment Preview

4 days ago

Important Notes:1. The BLS reference week includes the 12th of the month. Massive COVID-19 layoffs started after the reference week (although there was a pickup in layoffs during the reference week).2. Watch for Special Notes in the release. There could be some important announcements on how the BLS will be handling unemployment numbers and seasonal adjustments.3. The 2020 Decennial Census was expected to increase hiring in March. This is unclear now – some of the hiring will be delayed.On Friday at 8:30 AM ET, the BLS will release the employment report for March. The consensus is for a decrease of 100,000 non-farm payroll jobs, and for the unemployment rate to increase to 3.9%.Last month, the BLS reported 273,000 jobs added in February (266,000 ex-Census).Here is a summary of recent

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Hotels: Occupancy Rate Declined 67% Year-over-year to All Time Record Low

4 days ago

From HotelNewsNow.com: STR: US hotel results for week ending 28 MarchReflecting the continued impact of the COVID-19 pandemic, the U.S. hotel industry reported significant year-over-year declines in the three key performance metrics during the week of 22-28 March 2020, according to data from STR.In comparison with the week of 24-30 March 2019, the industry recorded the following:• Occupancy: -67.5% to 22.6%• Average daily rate (ADR): -39.4% to US$79.92• Revenue per available room (RevPAR): -80.3% to US$18.05“Year-over-year declines of this magnitude will unfortunately be the ‘new normal’ until the number of new COVID-19 cases slows significantly,” said Jan Freitag, STR’s senior VP of lodging insights. “Occupancy continues to fall to unprecedented lows, with more than 75% of rooms empty

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BEA: March Vehicles Sales decreased to 11.4 Million SAAR

4 days ago

The BEA released their estimate of March vehicle sales this morning. The BEA estimated light vehicle sales of 11.37 million SAAR in March 2020 (Seasonally Adjusted Annual Rate), down 32.1% from the revised February sales rate, and down 34.1% from March 2019.Sales in February were revised down from 16.83 million SAAR to 16.73 million SAAR.Click on graph for larger image.This graph shows light vehicle sales since 2006 from the BEA (blue) and an estimate for March 2020 (red).My view – before the health crisis – was that sales  would move mostly sideways at near record levels this year.  Going forward, the impact of COVID-19 will be significant.The second graph shows light vehicle sales since the BEA started keeping data in 1967.Note: dashed line is current estimated sales rate of 11.37

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Trade Deficit decreased to $39.9 Billion in February

4 days ago

Note: This data was for February and the outbreak of COVID-19 likely impacted trade with China.From the Department of Commerce reported:The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $39.9 billion in February, down $5.5 billion from $45.5 billion in January, revised.February exports were $207.5 billion, $0.8 billion less than January exports. February imports were $247.5 billion, $6.3 billion less than January importsemphasis added Click on graph for larger image.Both exports and imports decreased in January. Exports are 26% above the pre-recession peak and down slightly compared to February 2019; imports are 7% above the pre-recession peak, and down 5% compared to February 2019.In general, trade both imports and

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Weekly Initial Unemployment Claims Increase to 6,648,000

4 days ago

The DOL reported:In the week ending March 28, the advance figure for seasonally adjusted initial claims was 6,648,000, an increase of 3,341,000 from the previous week’s revised level. This marks the highest level of seasonally adjusted initial claims in the history of the seasonally adjusted series. The previous week’s level was revised up by 24,000 from 3,283,000 to 3,307,000. The 4-week moving average was 2,612,000, an increase of 1,607,750 from the previous week’s revised average. The previous week’s average was revised up by 6,000 from 998,250 to 1,004,250. emphasis addedThe previous week was revised up.The following graph shows the 4-week moving average of weekly claims since 1971.Click on graph for larger image.The dashed line on the graph is the current 4-week average. The four-week

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Thursday: Unemployment Claims, Trade Deficit

5 days ago

Thursday:• At 8:30 AM, The initial weekly unemployment claims report will be released. The consensus is for a 3.000 million initial claims, down from 3.283 million the previous week.• At 8:30 AM, Trade Balance report for January from the Census Bureau. The consensus is the trade deficit to be $40.0 billion.  The U.S. trade deficit was at $45.3 billion in January.• Early, BEA Light vehicle sales for March. The consensus is for light vehicle sales to be 11.9 million SAAR in March, down from 16.8 million in February (Seasonally Adjusted Annual Rate).

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April 1 Update: US COVID-19 Tests per Day; More Testing Needed

5 days ago

There is still far too little testing in the U.S.We need:1) More testing.2) Better reporting (all tests, positive and negative).3) A national test-and-trace program. Name the head of the program now – so that person can update everyone on the progress.Test-and-trace is a key criteria in starting to reopen the country.   My current guess is test-and-trace will require around 300,000 tests per day at first since the US is far behind the curve.Notes: Data for the previous couple of days is updated and revised, so graphs might change.Also, I include all tests in the total including pending.The percent positive excludes the pending tests.There were 101,147 tests reported over the last 24 hours. Click on graph for larger image.This data is from the COVID Tracking Project.The percent positive

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Zillow Case-Shiller February Forecast: "Ancient History"

5 days ago

The Case-Shiller house price indexes for January were released yesterday. Zillow forecasts Case-Shiller a month early, and I like to check the Zillow forecasts since they have been pretty close.From Matthew Speakman at Zillow: January Case-Shiller Results & February Forecast: Ancient HistoryIt may have been only two months ago, but in many ways it might as well be ancient history. …The national Case-Shiller Home Price Index rose 3.9% year-over-year in January. The smaller 10- and 20-city composite indices grew more slowly, at 2.6% and 3.1% year-over-year, respectively.emphasis addedThe Zillow forecast is for the year-over-year change for the Case-Shiller National index to be at 4.0% in February, up from 3.9% in January. The Zillow forecast is for the 20-City index to be up 3.2% YoY in

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Fannie Mae: Mortgage Serious Delinquency Rate Declined in February, Lowest Since 2007

5 days ago

Fannie Mae reported that the Single-Family Serious Delinquency was declined to 0.65% in February, from 0.66% in January. The serious delinquency rate is down from 0.76% in February 2019.These are mortgage loans that are "three monthly payments or more past due or in foreclosure".  This is the lowest serious delinquency rate for Fannie Mae since June 2007.The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%.Click on graph for larger imageBy vintage, for loans made in 2004 or earlier (2% of portfolio), 2.46% are seriously delinquent. For loans made in 2005 through 2008 (4% of portfolio), 4.07% are seriously delinquent, For recent loans, originated in 2009 through 2018 (94% of portfolio), only 0.35% are seriously delinquent. So Fannie is still working through a few poor

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Construction Spending Decreased in February

5 days ago

From the Census Bureau reported that overall construction spending increased in February:Construction spending during February 2020 was estimated at a seasonally adjusted annual rate of $1,366.7 billion, 1.3 percent below the revised January estimate of $1,384.5 billion. The February figure is 6.0 percent above the February 2019 estimate of $1,289.0 billion. emphasis addedBoth private and public spending decreased:Spending on private construction was at a seasonally adjusted annual rate of $1,025.8 billion, 1.2 percent below the revised January estimate of $1,038.5 billion. …In February, the estimated seasonally adjusted annual rate of public construction spending was $340.9 billion, 1.5 percent below the revised January estimate of $345.9 billion. Click on graph for larger image.This

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ISM Manufacturing index Decreased to 49.1 in March

5 days ago

The ISM manufacturing index indicated contraction in March.  The PMI was at 49.1% in March, down from 50.1% in February. The employment index was at 43.8%, down from 46.9% last month, and the new orders index was at 42.2%, down from 49.8%.From the Institute for Supply Management: March 2020 Manufacturing ISM® Report On Business® Economic activity in the manufacturing sector contracted in March, and the overall economy grew for the 131st consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee: “The March PMI® registered 49.1 percent, down 1 percentage point from the February reading of

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ADP: Private Employment decreased 27,000 in March

5 days ago

From ADP: ADP National Employment Report: Private Sector Employment Decreased by 27,000 Jobs in March; the March NER Utilizes Data Through March 12 and Does Not Reflect the Full Impact of COVID-19 on the Overall Employment SituationPrivate sector employment decreased by 27,000 jobs from February to March according to the March ADP National Employment Report®. … The report utilizes data through the 12th of the month. The NER uses the same time period the Bureau of Labor and Statistics uses for their survey. As such, the March NER does not reflect the full impact of COVID-19 on the overall employment situation. …“It is important to note that the ADP National Employment Report is based on the total number of payroll records for employees who were active on a company’s payroll through

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MBA: Mortgage Refinance Applications Increased, Purchase Applications down 24% YoY

5 days ago

From the MBA: Mortgage Applications Increase in Latest MBA Weekly SurveyMortgage applications increased 15.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 27, 2020…. The Refinance Index increased 26 percent from the previous week and was 168 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 11 percent from one week earlier. The unadjusted Purchase Index decreased 10 percent compared with the previous week and was 24 percent lower than the same week one year ago….“Mortgage rates and applications continue to experience significant volatility from the economic and financial market uncertainty caused by the coronavirus crisis. After

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Wednesday: ADP Employment, ISM Mfg, Construction Spending, Vehicle Sales

6 days ago

Wednesday:• At 7:00 AM ET, The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.• At 8:15 AM, The ADP Employment Report for March. This report is for private payrolls only (no government). The consensus is for 154,000 payroll jobs lost in March, down from 183,000 added in February. • At 10:00 AM, ISM Manufacturing Index for March. The consensus is for the ISM to be at 45.0, down from 50.1 in February.• At 10:00 AM, Construction Spending for February. The consensus is for a 0.6% increase in construction spending.• At Late, Light vehicle sales for March. The consensus is for light vehicle sales to be 11.9 million SAAR in March, down from 16.8 million in February (Seasonally Adjusted Annual Rate).

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March 31 Update: US COVID-19 Tests per Day #TestAndTrace

6 days ago

There is still far too little testing in the U.S.Test-and-trace is a key criteria in starting to reopen the country.   My current guess is test-and-trace will require around 300,000 tests per day at first since the US is far behind the curve.When I first started posting this data (thanks to the COVID Tracking Project), testing was so low, that just tracking the number of tests made sense.The percentage positive is also critical. Unfortunately some states and labs don’t report all negative tests, although that is supposed to change soon.The real key is to have enough tests that the US can test all people with symptoms (even mild), all close contacts of those testing positive (aka Test-and-Trace), healthcare workers and first responders fairly regularly (upon request), staff at retirement

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The Economic Outlook

6 days ago

This is a healthcare crisis, and the economic outlook is based on presumptions about the course of the pandemic.  A key model suggests peak healthcare resource use will be around April 15th, but the peak will not be until May in many areas of the country.   Of course, this requires cooperation of the public.Before areas can start easing restrictions, the US will need to have sufficient healthcare services and equipment, masks for everyone (it seems likely that it will be recommended that everyone wear a mask), and adequate testing to do surveillance monitoring. Right now we are well short of all of these requirements, but making progress.   It is possible we could see some restriction easing in June.Some impacts are already clear: travel is down significantly impacting airlines and hotels,

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Update: A few comments on the Seasonal Pattern for House Prices

6 days ago

Note: With COVID-19, there will be far fewer real estate transaction for several months. This could distort the house price indexes – since there will be far fewer repeat sales.CR Note: This is a repeat of earlier posts with updated graphs.A few key points:1) There is a clear seasonal pattern for house prices.2) The surge in distressed sales during the housing bust distorted the seasonal pattern.3) Even though distressed sales are down significantly, the seasonal factor is based on several years of data – and the factor is now overstating the seasonal change (second graph below).4) Still the seasonal index is probably a better indicator of actual price movements than the Not Seasonally Adjusted (NSA) index.For in depth description of these issues, see former Trulia chief economist Jed

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