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Weekly Indicators for January 18 – 22 at Seeking Alpha

2 days ago

– by New Deal democratMy Weekly Indicators post is up at Seeking Alpha.The pandemic, and the monetary and interest rate responses to it, are dictating which sectors are improving and which are stagnated or worse.But as vaccinations slowly progress, in springtime there may be growth in the garden.As usual, clicking over and reading rewards me a little bit for the work I put in, and brings you up to the moment on the data.

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A detailed, updated look at the housing market

3 days ago

– by New Deal democratExisting home sales for December were reported this morning at 6.76 million annualized, just below the October 10 Year+ high of 6.86 million.Although existing home sales are about 90% of the entire housing market, they are less important economically than new housing construction, which has multiplier effects which last 12-24 months.But right now both existing home sales and new home construction are telling the same story: a market that is turning in its best performance since before the Great Recession. I have updated my detailed look at this very important long leading sector in an article over at Seeking Alpha.Clicking over and reading will bring you thoroughly up to date about this crucial sector, and reward me a little bit for my work.

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Initial jobless claims: still elevated compared with several months ago, another negative jobs report for January a possibility

4 days ago

– by New Deal democratInitial jobless claims this week came within a hair of meeting my criteria for a change to an upward trend. On a unadjusted basis, new jobless claims declined by 151,303 to 960,668. Seasonally adjusted claims also declined by 26,000 to 900,000 (last week’s numbers were also adjusted downward from 965,000 to 926,000). The 4 week moving average, however, rose by 23,500 to 848,000.Here is the close up since the end of July (these numbers were in the range of 5 to 7 million at their worst in early April): There is now a 2 1/2 month trend of YoY% increases in initial claims. Further, by rising to  900,000 or higher for the second week in a row, seasonally adjusted claims hit one of my two markers for a fundamental change of trend. But the 4 week average – by a whopping

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“Those who cannot see must feel:” a retrospective on the Trump presidency

6 days ago

– by New Deal democratFour years ago I wrote “Those Who Cannot See Must Feel,” which isthe translation of an old German saying that I used to hear from my grandmother when I misbehaved.  It is pretty clear that, over the next four years, the American public is going to do a lot of feeling ….  The results will range somewhere in between bad, disastrous, catastrophic, and cataclysmic, depending on how badly foreign affairs are bungled and how much basic norms of republican government irreversibly give way to despotism.  … every [other] country in the world which has a Madisonian presidential system … ha[s] [ ] somewhere along the line fallen into despotism.  I believe that the answer until now has been that the US is the only country which had not succumbed ….I have some hope as to

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NFIB small business optimism vs. reality

7 days ago

– by New Deal democratThis is a really slow news week – on the economy!  My retrospective on the Trump Presidency is nearly complete and will be published tomorrow morning.In the meantime, here is a brief note on the Small Business Optimism index which was updated for December last week, showing a steep decline across the board. Here it is:What happened? Was there some earthshaking economic news? A hidden cataclysm of supply or demand?Hardly.What happened is that it became apparent to the small businessmen who primarily make up the National Federation of Independent Business that Biden had been elected to the Presidency.As has been noted from time to time, Trump’s core constituency is not the white working class, but rather white small businessmen. When Trump shockingly won the 2016

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The Federalist Papers #74 on insurrections, treason, and the pardon power: an argument that such pardons would be invalid as “arising in a case of impeachment”

8 days ago

– by New Deal democratThe Insurrectionists from January 6 are already asking Trump for pardons. Probably the only thing that would hold him back from doing so is his innate selfishness: what would be the benefit to *him*?The thought that Trump could issue Got Out of Jail Free cards to the very people he incited to riot is mind boggling.But it’s at least possible that he might not have the right to do so. Article III, Section 2 of the Constitution provides that “The President … shall have the power to grant] reprieves and pardons for offenses against the United States, EXCEPT IN CASES OF IMPEACHMENT.” That last bit isn’t just my emphasis. It’s also the emphasis placed on the quote in the discussion of the President’s pardoning power in The Federalist No. 74, which also discusses the

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Weekly Indicators for January 11 – 15 at Seeking Alpha

9 days ago

– by New Deal democratMy Weekly Indicators post is up at Seeking Alpha.While initial jobless claims have continued to worsen, there is no sign of a generalized downturn in the coincident data, and the upturn in long term interest rates isn’t enough to change their fundamental positive impact on the economy.As usual, clicking over and reading is rewarding just a little bit for me, and brings you up to the virtual moment as to what is happening in the economy.

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Good news (industrial production) and bad news (retail sales)

10 days ago

– by New Deal democratThis morning’s two reports on industrial production and retail sales for December were a case of good news and bad news.Let’s do the good news first. Industrial production, the King of Coincident Indicators, rose 1.6% in December. The manufacturing component rose 1.0%. Needless to say, these are a strongly positive numbers. As a result, overall production is only -3.3% below its February level, while manufacturing is only down -2.4% since February:Manufacturing has consistently been one of the biggest bright spots in the economy ever since April. Now on to the bad news.Nominal retail sales declined -1.0% in December. Excluding the food services sector which has been especially hard hit by the pandemic and lockdowns, sales were nevertheless down -0.3%. Total sales

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Jobless claims highest in three months – but seasonality still playing a huge role

11 days ago

– by New Deal democratOn a unadjusted basis, new jobless claims rose by 231,335 to 1,151,015. Seasonally adjusted claims also rose by 181,000 to 965,000. The 4 week moving average rose by 18,250 to 834,250.Here is the close up since the end of July (these numbers were in the range of 5 to 7 million at their worst in early April): There is now a 2+ month trend of YoY% increases in initial claims. Further, by rising to over 900,000, seasonally adjusted claims hit one of my two markers for a fundamental change of trend. But the 4 week average, which is still under 850,000, did not.For the last couple of months, I have been cautioning that the holiday season plays havoc with seasonality even in normal years, let alone a year when the pandemic is causing changes in weekly numbers by an order

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December inflation: real aggregate wages fall as real average wages rise due to compositional effects

12 days ago

– by New Deal democratConsumer inflation typically rises as expansions continue, and declines once recessions start. Once a recovery begins, inflation typically steadies again. While the pandemic has affected both consumer demand and the supply chain, overall the paradigm should still apply. With that in mind, let’s take a look at December’s report.For the past 40 years, recessions had typically happened when CPI less energy costs (red) had risen to close to or over 3%/year. As of this month that number is exactly 2%: In other words, there is no troublesome price pressure outside of the pandemic. Because pandemic affects are probably influencing seasonality, I also show non-seasonally adjusted inflation below (red):Typically inflation increases in the first few months of the year, and

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November JOLTS report shows renewed impact of pandemic, partial lockdowns

13 days ago

– by New Deal democratThis morning’s JOLTS report for November (remember – a month in which there were total job gains) showed a jobs market recovery that at least paused due to the increasing effects of the out of control pandemic. Hires were up (good), while quits were unchanged, openings declined (bad) and layoffs and discharges rose (bad).While the JOLTS data is a deep dive into the dynamics of the labor market, since it only dates from 2001, there are only 2 previous recoveries with which to compare the present. Nevertheless it is worthwhile to make the comparison.In the two past recoveries:first, layoffs declinedsecond, hiring rosethird, job openings rose and voluntary quits increased, close to simultaneouslyLet’s examine each of those in turn. In each case, I break out 2001-19 in

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Scenes from the December jobs report

14 days ago

– by New Deal democratFriday’s December jobs report saw the first decline in employment since the lockdowns of March and April. Let’s take a closer look.As I pointed out Friday, the losses were concentrated in the food and dining (restaurant) and amusement and recreation sectors, both of which are shown below normalized to 100 as of February:The two sectors are down 20% and 30% from their February peaks.By contrast, the leading job sectors of manufacturing, residential and overall construction, and temporary help positions all continued with gains, and are close to if not completely recovered from their pandemic losses. Below I show these YoY in two time periods for easier comparison (note two of the series did not begin until the 1980s).1955-1982:1983 – present:This is one of the many

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Programming note

14 days ago

– by New Deal democratFour year ago I wrote a valedictory piece about the Obama Administration, and separately wrote of my fears of what the Trump Administration would wreak.Needless to say, especially in light of events of the past week, I intend to do the same retrospective as to Trump and the current state of the GOP and the Republic. Much of what I have to say is in agreement with disparate threads I have read on twitter, but I want to weave those strands together into one cohesive piece. Hint: I keep thinking about old episodes of Supernanny, where a toddler’s behavior was allowed to get worse and worse without consequence. The longer it went on, the more forceful and resolute the parents’ response ultimately had to be.Hopefully this will be a long-form piece next Sunday.

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Weekly Indicators for January 4 – 8 at Seeking Alpha

16 days ago

– by New Deal democratMy Weekly Indicators post is up at Seeking Alpha.Although yesterday’s employment report was negative, there is still no sign of any broad-based downturn in the broader economy. Rather, losses appear contained to the dining and entertainment sectors.As usual, clicking over and reading should bring you up to the moment, and brings me a tiny jingle in my pocket.Also … in the conclusion, I make reference to the improvement in the daily average of people being vaccinated against COVID-19. Here is the graph with the information I am referring to:

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December jobs report: I told you so – jobs actually declined in December; BUT employment primed for takeoff once pandemic abates

17 days ago

– by New Deal democratImportant: There was a huge amount of seasonality in this report. This is common for December, but the issue was greatly exacerbated because of the outsized impact of the pandemic. Take the large changes in some of the data with many grains of salt.I have been warning for almost 4 weeks that the December employment report might have a negative number. It did. At the same time, the internals are not nearly so bad as the headline.HEADLINES:-140,000 million jobs lost, 95,000 of which were in the private sector and 55,000 were in government. Comparatively, there were 22.1 million job losses in March and April. The alternate, and more volatile measure in the household report indicated a gain of 21,000 jobs, which factors into the unemployment and underemployment rates

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Jobless claims start 2021 continuing flat to increasing trend; negative December jobs number increasingly likely

18 days ago

– by New Deal democratOn a unadjusted basis, new jobless claims rose by 77,400 to 922,072. Seasonally adjusted claims declined by 3,000 to 787,000. The 4 week moving average declined by 18,750 to 818,750. All of these are above their recent lows. Here is the close up since the end of July (these numbers were in the range of 5 to 7 million at their worst in early April): At the same time, neither of these has hit my established markers of renewed upward trend of seasonally adjusted new claims rising to over 900,000 and the 4 week average to over 850,000.Because of the huge distortions caused by the pandemic in seasonally adjusted numbers, and because we are at a time of year when seasonality causes the most distortions in any event, here are the YoY changes in all of the above

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Coronavirus dashboard for January 6, 2021: new infections vastly outpacing vaccinations

19 days ago

– by New Deal democratTotal confirmed COVID-19 infections: 21,046,195*Infections last 7 days average: 219,253Total deaths: 357,258Deaths last 7 days average: 2,670Total vaccinations: 4,836,489*A study just released, based on random blood samples, suggests that as many as 50,000,000 Americans may have already been infected. Because some of the positive tests may be based on exposure to other coronaviruses, I do not think the number is that high. But my own guess is that the “true” number might be about 30,000,000, or 1 in every 11 Americans.Today I want to focus on comparing this winter’s breakout with last spring’s and summer’s, by comparing the top and bottom 25 States with the “poster children” for each of the past breakouts.Seven day average of new infectionsBottom 25Top 25Not only do

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December ISM manufacturing index: manufacturing, like housing, is “on fire”

20 days ago

– by New Deal democratData for December 2020 started out this morning with the ISM manufacturing index.The bottom line is: it was excellent. The overall reading, at 60.7, was only 0.1 below its 20 year peak of 60.8 in 2018. The even more leading new orders subindex rose to 67.9, also equivalent to its 20 year highs:There has been some deceleration in the positive readings from the Regional Fed manufacturing indexes. But it is nowhere evident in this report.Simply put, manufacturing along with housing, are both “on fire.” This is one more piece of evidence that the economy is ready to soar once it is no longer held back by the pandemic.

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November construction spending confirms building surge

21 days ago

– by New Deal democratOne of my consistent themes in the past few months has been how the housing market is priming the economy for strong growth in 2021 as soon as the pandemic is brought under control. In that vein, November construction spending surged, confirming what we have already been seeing in housing permits and starts.First of all, here are both total and residential construction spending for the past 15+ years:Note that in raw, non-inflation-adjusted terms, both are close to their all-time highs, and definitely at 10+ year highs.Of the two, residential construction is the more important because it is more leading, indicator. Commercial and government construction, which are included in the total, relatively speaking lag.Because permits have to be taken out before construction

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Weekly Indicators for Dece3mber 28 – January 1 at Seeking Alpha

23 days ago

– by New Deal democratMy Weekly Indicators post is up at Seeking Alpha.In a sparse data environment, it continues to stand out how surprisingly well – under the circumstances – the economy is doing, and how primed it is to really take off once the pandemic is brought under control.As usual, clicking over and reading brings you up to the virtual moment, and puts a penny or two in my pocket.

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Happy New Year 2021!

24 days ago

– by New Deal democratWishing all of my readers a happy, healthy, and better 2021!I started writing online 17 years ago, and have been here over a decade. This past year was easily the worst of all of them, and at least tied with 1968 if not worse for the worst year historically of my entire life.The pandemic upended everything, so this year for the first time in a long time there’s no point in taking a look back to see how the year-ago economic forecast panned out, and only limited value in a new forecast even now, although I agree with Paul Krugman that once the pandemic has been brought under control, the economy looks likely to spring back strongly.In the meantime, here is one last chuckle about 2020, The Year From Hell – in this ad from match.com, literally!

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Final jobless claims of 2020 continue to show lack of progress

25 days ago

– by New Deal democratNew jobless claims declined for the second week in a row this week, but are still significantly above their recent pandemic lows, while continuing claims, seasonally adjusted, once again made a new pandemic low. There is a sizable but by no means certain likelihood that December’s jobs number will be negative.On a unadjusted basis, new jobless claims declined by 31,736 to 841,111. Seasonally adjusted claims also declined by 19,000 to 787,000. The 4 week moving average, however, rose again by 17,750 to 836,750. All of these are above their recent lows. Here is the close up since the end of July (for comparison, remember that these numbers were in the range of 5 to 7 million at their worst in early April): Because of the huge distortions caused by the pandemic in

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Coronavirus dashboard for December 29: a final look back at the pandemic disaster in 2020

27 days ago

– by New Deal democratTotal US confirmed cases: 19,132,726*Average cases last 7 days: 184,005Total US deaths: 333,118Average deaths last 7 days: 2,207 Total vaccinated: 2,127,143 (per CDC via Bloomberg)*Because many asymptomatic people probably never get tests, actual cases are probably more like 26 million, or about 8% of the US populationSource: COVID Tracking ProjectThe good news is, we finally have started the process of vaccination, and 1% of the population should be vaccinated by the end of this week. The bad news is, at the current rate, it would take over 4 years to vaccinate everyone in the US. I do expect this to ramp up, both as more States get more efficient at administering the vaccine, and because the Biden Administration will be much more activist and competent at ramping

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The Four big coincident indicators as of the end of 2020

28 days ago

– by New Deal democratAll of the important economic data for 2020 has already been released. In this final week only November house prices and one last week of jobless claims remain.So this is a good time to take a look at the current state of the economy as it has unfolded in this pandemic year.The 4 most important components in the NBER’s toolkit for calling recessions and expansions are real sales, real income, production, and employment. With the exception of manufacturers’ and wholesalers’ sales, all of the above components, including retail sales, have already been released through November. Let’s take a look:The onset of the pandemic in March is really obvious, and the outsized distortions, first to the downside, and then to the upside, continued through July. In the last 3

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Weekly Indicators for December 21 – 25 at Seeking Alpha

December 26, 2020

– by New Deal democratMy Weekly Indicators post is up at Seeking Alpha.While there have been some signs of softening in a few of the high profile metrics, overall the economy continues to remain surprisingly resilient.As usual, clicking over and reading should bring you up to the moment, and put a little coin jingle in my pocket.

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Jobless claims continue to show sideways to upward trend

December 24, 2020

– by New Deal democratNew jobless claims declined this week, but are still significantly above their recent pandemic lows, while continuing claims, seasonally adjusted, made a new pandemic low. The downward trend in claims has clearly ended for now, although whether the current trend is sideways or upward remains unclear. In particular, there is a sizable but by no means certain likelihood that December’s jobs number will be negative.On a unadjusted basis, new jobless claims declined by 71,512 to 869,398. Seasonally adjusted claims also declined by 89,000 to 803,000. The 4 week moving average rose by 4,000 to 818,250. All of these are above their recent lows. Here is the close up since the end of July (for comparison, remember that these numbers were in the range of 5 to 7 million at

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Decline in personal income and spending adds to evidence of reversal of economic rebound

December 23, 2020

– by New Deal democratThis morning’s release of personal income and spending for November adds to the evidence that the economic recovery from the onset of the pandemic has stalled, and potentially reversed.Real personal income declined -1.3% in November, the first decline since April. Real personal spending also declined -0.4%. Real personal spending is now down -2.7% from its February peak, while income remains higher by 2.0% (an important reason why the economy has not suffered more):When we factor in “government transfer receipts,” i.e., things like unemployment and supplemental pandemic benefits, income also declined for the first time since April, and is down -1.5% compared with its February peak:Between the cold weather curtailing outdoor activities, renewed lockdown-type

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Coronavirus dashboard for December 22: the pain threshold

December 22, 2020

– by New Deal democratTotal US infections: 18,035,209*Past 7 days average daily infections: 215,429Total US deaths: 319,364Past 7 days average daily deaths: 2,655Source” COVID Tracking Project*Because many asymptomatic cases in particular have probably not been diagnosed, I suspect the truer number is on the order of 25 million, or 1 in every 13 Americans.Here is the latest overall look at new infections and deaths countrywide (note separate scales):Each wave of new infections has been bigger than the one preceding, but deaths only in the past month have risen on a per capita basis to and exceeding the early peak from March and April. In the past 2 weeks, the rate of new infections has stabilized. We can expect deaths to stabilize in the next week or two at the level of one 9/11 each and

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The 2004-2020 political red/blue shift: the intersection of geography, the economy, and ethnic migration

December 21, 2020

– by New Deal democratIt’s a very slow, holiday-shortened economic week. We’ll get new home sales, plus personal income and spending Wednesday, and jobless claims as usual Thursday.In the meantime, here is something I found revealing. It’s a map, created by Nathan Jordan,  a college student from Alabama (I think), showing the county-level change in Presidential voting countrywide (except Alaska) from 2004 through 2020:What was fascinating to me (because I am a nerd) is how closely the changes track some geographical features. The spine of the Appalachians stands out clearly, plus the Ozark mountains, and the red-shaft also appears to closely follow the Mississippi-Missouri-Ohio River valley system.On the first pass, this certainly looks like an “It’s the economy, stupid!” story. But it’s

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