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Articles by New Deal Democrat

Initial and continuing claims: the most “less awful” so far

12 hours ago

– by New Deal democratThis morning’s initial and continued jobless claims continue the trend of “less awful” numbers that resumed last week.

New jobless claims, which fell to under 1,000,000 for the first time on an un-adjusted basis last week, declined about 150,000 further to 831,856 (red in the graph below), and on an adjusted basis (blue) declined to 963,000, the first time since the pandemic that number was also under 1 million: 

Continuing claims, on both an un-adjusted (red), and seasonally adjusted (blue) basis, also made new pandemic lows under 16 million, at roughly 15.2 million and 15.5 million respectively:

All of these remain at far worse levels than even at their worst during the Great Recession, as shown below in the seasonally adjusted numbers (initial claims,

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July inflation consistent with early recovery; no compelling evidence of wage deflation

1 day ago

– by New Deal democratThis morning July consumer prices were reported to have increased 0.6% for the second month in a row (as did core inflation, ex-food and energy):

As a result, YoY inflation has increased to 1.0%:

The widespread price increases are signs of increased demand, which in these circumstances is a good thing. In the past, deflationary recessions, most notably the “great contraction” of 1929-32, ended when the YoY change in producer and consumer prices bottomed out. In this recession they did so in April, so this adds to the evidence that *technically* a recovery has been in progress thereafter (even though in absolute terms things remain awful. They are simply “less awful” than before).Because I have been looking for signs of wage deflation, let’s put this

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Coronavirus dashboard for August 10: some good news to balance the bad

3 days ago

– by New Deal democratTotal US cases:  5,060,880
Average last 7 days: 52,393/day

Total US deaths: 154,947

Average last 7 days: 1,045/day

Source: COVID Tracking ProjectLet’s take a look at some good news as well as continued bad news today.

First, the bad news. Here are the top 10 States for coronavirus infections: 

And here are the top 10 States for deaths:

Note that with the exception of Nevada and Idaho, all of the top 10 States in both categories are from the Confederacy. About the best that can be said is that for most of them, cases and deaths may be leveling off. I can’t help but think that the racial demographics of who is getting seriously ill and dying plays a role in why these States are so recalcitrant.

But there is some good news as well.

First,

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Did July’s headline jobs number miss business closures, and so overcount job gains?

3 days ago

– by New Deal democratA few issues arose with regard to last Friday’s jobs number; in particular, the effect of government jobs in the form of Census and teaching jobs, whether seasonal adjustments are unhelpful at this time; and whether the birth/death model used by the BLS has undercounted job losses (due to increased non-reporting by closed businesses). I’m going to examine this in two posts. Tomorrow (hopefully!) I’ll go into detail as to what withholding taxes can tell us about the employment numbers. Today I want to compare the BLS payrolls data with the Census’s household survey.

Let’s start with the issue of government employment. Since there were lots of layoffs in schools earlier, the lack of new layoffs in July meant that “seasonally” over 200,000 gains  of the 1.763

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The 2020 Presidential election nowcast: polling trends favorable to Biden continue

4 days ago

– by New Deal democrat
Here is my weekly update on the 2020 elections, based on State rather than national polling in the past 30 days, since that directly reflects what is likely to happen in the Electoral College.Let me begin with a reminder that polls are really only nowcasts, not forecasts. There is nothing inherent in their current lean which tells you they will remain in the same category in early November. Which is why I take issue somewhat with the following tweets by forecaster Harry Enten:
This past week Prof. Allan Lichtman, who predicted Trump would win in 2016, predicted that Biden will win the election this year, based on his 13 “keys.” 

Lichtman said that 7 of the 13 keys favor Biden: 

1. The Democrats won more seats in the 2018 midterms than they held after the 2014

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Weekly Indicators for August 3 – 7 at Seeking Alpha

6 days ago

– by New Deal democratMy Weekly Indicators post is up at Seeking Alpha.The indicators in the short leading and coincident timeframes have improved. In other words, if it were left to its own devices, the economy “wants” to get better.But we are still at the mercy of the pandemic, and the federal and State responses to it. And on that score, I don’t see any meaningful progress that is going to be made in the next 5 months.

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July jobs report: a very good *relative* gain – perhaps the last

7 days ago

– by New Deal democrat
HEADLINES:
1,763,000 million jobs gained. Together with the gains of May and June, this makes up about 42% of the 22.1 million job losses in March and April.
U3 unemployment rate declined -0.9% from 11.1% to 10.2%, compared with the January low of 3.5%.
U6 underemployment rate declined -1.5% from 18.0% to 16.5%, compared with the January low of 6.9%.
Those on temporary layoff decreased -1,300,000 to 9.225 million.
Permanent job losers decreased by -6,000 to 2.877 million.
May was revised upward by 26,000. June was revised downward by -9,000 respectively, for a net of 17,000 more jobs gained compared with previous reports.

Leading employment indicators of a slowdown or recession

I am still highlighting these because of their leading nature for the economy

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Initial and continuing jobless claims: back to being “less awful”

8 days ago

– by New Deal democratThis morning’s initial and continued jobless claims resume the trend of “less awful” numbers.

New jobless claims fell to under 1,000,000 for the first time on an un-adjusted basis – 984,192, to be specific (gold in the graph below). After seasonal adjustment, they declined 249,000 to a new pandemic low of 1,186,000 (blue), also a new pandemic low:

Continuing claims (red, right scale), reported for the prior week, also made a new pandemic low of 16,107,000.

All of these remain at far worse levels than even at their worst during the Great Recession. Further, that there are still 1 million *new* layoffs a week almost 5 months into the pandemic indicates that longer term damage is being done to the economy, I.e., if there were a vaccine tomorrow, there would

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Coronavirus dashboard for August 4: US regional breakdown

8 days ago

– by New Deal democrat
US cases August 4: 51,568
Average last 7 days: 59,182
US deaths August 4: 1,176

Average last 7 days: 1,057

(Source: COVID Tracking Project)

This is CNN’s latest map of States that require the wearing of masks (red):

And here is the NYT’s latest map of counties based on the growth in new cases of COVID-19:

The two maps are very similar, with the notable exception of parts of Texas, which has had a mask-wearing requirement for the past month in most urban counties.

From 91-divoc.com, here is the breakdown in cases by region:

And here is the breakdown in deaths:

Because the above graphs place the Baltimore and DC metro areas in the South vs. the Northeastern megalopolis, below I have separately broken out DE, MD, DC, and VA and compared

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Manufacturing, housing, vehicles: the economy “wants to” recover

10 days ago

– by New Deal democratYesterday we got two of the three typical leading data metrics that start the month: the ISM manufacturing index and construction spending. The third, vehicle sales, will be reported later today but is much less important than it used to be because US manufacturers only report actual numbers at the end of the quarter.

The ISM manufacturing new orders index is a good short leading indicator for the producer side of the economy. And it roared back to very positive in July:

The overall ISM index came in at a solid 54.2 (any number above 50 shows expansion), and the new orders sub-index rose from June’s 56.4 to 61.5, which isn’t just positive, but can be considered a “booming” number.

Meanwhile, residential construction spending (blue in the graph below),

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The 2020 Presidential and Senate elections nowcast: reverting towards the mean

11 days ago

– by New Deal democrat
Here is my weekly update on the 2020 elections, based on State rather than national polling in the past 30 days, since that directly reflects what is likely to happen in the Electoral College.

The theme this week is that Trump’s approval is reverting to the mean, and so are the Presidential polls. 

Here is Nate Silver’s Trump approval vs. disapproval graph: 

For most of the past month, Trump approval has been languishing at 40%, equivalent to the worst levels of his Presidency. But as always been the case before, his partisans come back to approving him after the immediate moment has passed.

This is reflected in the Presidential polling. To refresh, here is how the below map  works:

– States where the race is closer than 3% are shown as toss-ups.-

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Weekly Indicators for July 27 – 31 at Seeking Alpha

12 days ago

– by New Deal democratMy Weekly Indicators post is up at Seeking Alpha.The two most noteworthy short leading indicators, stock prices and initial jobless claims, have started to go in two different directions in the past several weeks.As always, clicking over and reading should bring you right up to the moment, and put a little coin in my pocket as thanks.

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Catching up with wages, income, and layoffs

13 days ago

– by New Deal democratYesterday and today have seen several significant data releases. Let’s catch up.

Wages

The Employment Cost Index was released for Q2 this morning. This is a particularly important release, because unlike the monthly “average hourly wages” number, this report normalizes by job category, e.g., it compares clerks’ wages in Q1 with clerks’ wages in Q2. So if clerks have experienced widespread wage cuts, it should show up here. Given the many anecdotes of wage cuts I have read and heard about since the pandemic began, I have been waiting to see what this number would be.

And the answer is . . . Wages did rise, albeit at one of the slowest rates in over 10 years, less than 0.4%, in Q2:

Because consumer prices fell close to -0.9% in Q2, in real inflation

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Q2 GDP does not bode well for early 2021

14 days ago

– by New Deal democratThere are two components of quarterly GDP that are long leading indicators, giving us information about the economy 12 months from now. If you think, as I do, that it is likely there will be a new Administration in Washington next year, which will competently follow the science, then there is every reason to believe that by 12 months from now the pandemic will have been contained, and so the long leading indicators are more likely to be valid.

In that regard, this morning’s Q2 2020 GDP was not grounds for optimism.

As an initial matter, the GDP decline of -9.5% annualized was the biggest decline since the Great Depression:  

The two forward-looking components of GDP are (1) private fixed residential investment, and (2) corporate profits. Because

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Three long-shot Senate races worth polling: Idaho, Nebraska, and South Dakota

15 days ago

– by New Deal democrat
On Sunday I wrote that it would be really helpful to have statewide polling in some Senate races that look on the surface like safe bets for the GOP, but might actually be worth contesting.

The reason for this is that, not only are the 4 Senate seats most likely to flip from GOP to Democrat — Colorado, Arizona, Maine, and North Carolina — all showing consistent leads for the democratic challenger in the past two months, but in several other States — most notably Iowa and Kansas — the democrat has *also* taken the lead, in the case of Iowa, a small but consistent one. In several other States — Alaska and South Carolina — the democrat has polled within striking distance in one or more recent polls.

Because there is no Senate polling available in other States, I

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Coronavirus dashboard for July 28: the “pain threshold” exists, and leads to a decline in new cases

16 days ago

– by New Deal democratTotal US coronavirus cases: 4,275,188
Average daily cases last 7 days: 65,896

Total US coronavirus deaths: 140,309

Average daily deaths last 7 days: 1,004

(Source: COVID Tracking Project)

Several months ago I wrote:

my forecast over the past month [has been] that the population of the US as a whole lacks the political and social will to beat the coronavirus. As a result, the outbreak will continue to wax and wane as complacency alternates with fear generated by big new outbreaks.
 The complacency of May gave rise to new outbreaks that showed up in June and deaths that have showed up in July. Case statistics over the past week show that the surge in cases and deaths in turn has caused the fear to kick back in, as shown in the below graph of the 7 days

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June durable goods orders continue rebound

17 days ago

– by New Deal democratLast week I wrote a synopsis of the short leading indicators and what they suggested about the ultimate Presidential election result in November. Basically they have improved over the last several months, and suggested the polls would tighten compared with the present.

Among the missing June indicators were durable goods. They were reported this morning, and continued their sharp rebound from May, making up in total about half of their pandemic decline:

This adds to the evidence that the economy is likely to be better in November than it was in Q2, so adds incrementally to the idea that the race will tighten somewhat compared with recent polls.

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The 2020 Presidential and Senate polling nowcasts: we need more small State polling!

19 days ago

– by New Deal democrat
For the past five weeks I have posted a projection of the Electoral College vote based solely on State rather than national polls (since after all that is how the College operates) that have been reported in the last 30 days, using the following formula:- States where the race is closer than 3% are shown as toss-ups.- States where the range is between 3% to 5% are light colors.- States where the range is between 5% and 10% are medium colors.- States where the candidate is leading by 10% plus are dark colors.As I emphasized last week, polls are really just nowcasts, snapshots in time that will change as circumstances change.To cut to the chase, there are no changes this week compared with last week. Biden is leading comfortably in the Electoral College vote, not

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Weekly Indicators for July 20 – 24 at Seeking Alpha

20 days ago

– by New Deal democratMy Weekly Indicators post is up at Seeking Alpha.There was no significant change this week in any of the indicator time frames.  I expect that to change in a hurry once the pain of the ending of the supplemental $600/week unemployment benefits is felt. That was all going to spending, and that spending is going to very abruptly stop.As usual, clicking over and reading brings you up to the virtual moment on the economy, and rewards me a little bit for the work I do.

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New home sales roar back to pre-pandemic levels

20 days ago

– by New Deal democrat
At some point – probably three or four months after Joe Biden takes the oath of office on January 20 of next year, G*d willing – the coronavirus pandemic is going to be brought under control in the US. At that point the long leading indicators are going to be very important in terms of the immediate direction of the US economy.

And the news on that score is very good, as shown by new home sales for June, reported this morning.

New home sales are extremely noisy and heavily revised, but they are the most leading of all of the housing metrics – even before permits. This morning they were reported at 776,000 units annualized (blue in the graph below), the highest since the onset of the Great Recession over 12 years ago:

Single family home permits (red in the

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Initial claims: a jolt of bad news, as Mitch McConnell and the GOP dawdle on an emergency benefit extension

22 days ago

– by New Deal democratThis morning’s report on initial and continuing claims, which give the most up-to-date  snapshot of the continuing  economic impacts of the coronavirus on employment, was a jolt of bad news, as claims increased by over 100,000 to the worst level in 4 weeks. The trend of slight improvement to “less awful” since the end of March was broken, and there was also a slight negative revision to last week’s number.Here is the week over week % change since the end of March:There were 1.416 million new claims, 109,000 more than one week ago.Continuing claims (red in the graph below, right scale), which lag by one week, did continue to decline by just over 1.1 million, from 17.304 million to 16.197 million, as opposed to the increase in initial claims (blue, left scale):I

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The short leading indicators and the 2020 Presidential election forecast

23 days ago

– by New Deal democrat
As I pointed out on Sunday, polls and poll aggregations really aren’t forecasts, they are nowcasts. They tell you who would win and by how much *if the election were held today.* They don’t tell you whether or by how much that is likely to change over the next few months. Further, candidates, campaigns, and voters react to them, and so change the dynamics. And in the case of several of them, most notably Nate Silver’s aggregations, since they only give you *probabilities* of each candidate winning, in a fundamental sense they are non-falsifiable — e.g., “well I *told* you that Candidate X had a 6% chance of winning, my model was correct!”

Models based on economic fundamentals, however, *can* forecast, because in the case of leading indicators, what the data is

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The 2020 Presidential election nowcast based on State polling: Trump support deteriorating even in red States

25 days ago

– by New Deal democrat
For the past four weeks I have posted a projection of the Electoral College vote based solely on State rather than national polls (since after all that is how the College operates) that have been reported in the last 30 days.Here’s how it works:
– States where the race is closer than 3% are shown as toss-ups.
– States where the range is between 3% to 5% are light colors.
– States where the range is between 5% and 10% are medium colors.
– States where the candidate is leading by 10% plus are dark colors.

Before I proceed further, let me emphasize that polls are *not* forecasts, only nowcasts. They tell us the likely result if the election were held today. Since voters, campaigns, and decision-makers respond to the polling, it is inherently fluid. The only true

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Weekly Indicators for July 14 – 18 at Seeking Alpha

27 days ago

– by New Deal democratMy Weekly Indicators post is up at Seeking Alpha.With the coronavirus beginning to rage out of control again in a majority of US States, improvement in the coincident and short leading indicators has generally halted.As usual, clicking over and reading will bring you up to the moment, and bring me a penny or two.

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Improvement slows in initial claims; expect recent job growth to slow as well

28 days ago

– by New Deal democratA preliminary note: this morning’s report on housing permits and starts showed improvement across the board in June, although the absolute levels are no better than the low points of 2017 and late 2018-early 2019:I’ll have more at Seeking Alpha later.Now let’s turn to yesterday’s report on initial and continuing claims, which have been giving the most up-to-date  snapshot of the continuing  economic impacts of the coronavirus on employment. This week continued the trend of slight improvement to “less awful,” as shown in the below graph of the week over week % change:There were 1.300 million new claims, only 10,000, or -0.8%, less than one week ago. This is the smallest weekly decline since the peak in claims in early April.As for continuing claims for the previous

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June retail sales: some actual good news; the entirety of the pandemic decline has been reversed

29 days ago

– by New Deal democratRetail sales are the third report for June out of the four main coincident indicators that show whether the economy is in recession or expansion. And they were the third that grew again for the month. In fact, in real, inflation-adjusted terms they were higher than in February, the last month before the coronavirus pandemic hit:

They were also only 0.4% lower than their all-time high set last August.

And they were also slightly *higher* YoY (0.4%), as shown in the below graph:

Beyond that, over the long haul, real retail sales have been a good if noisy short term leading indicator for job growth:

(Note that real retail sales are divided by 2 for scale in the above graph).

Here’s a close-up of the same since Trump took office:

This is a good

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Industrial production rebounds, but will manufacturing employment continue to do so?

July 15, 2020

– by New Deal democratIndustrial production is the King of Coincident Indicators. The NBER almost always identifies month of the end, and frequently the beginning, of recessions based on the top and bottom of this statistic. This morning it was reported to have risen for the second month in a row in June. Let’s take a little deeper look.

First, here’s the graph of both overall (blue) and manufacturing (red) production since Trump was inaugurated in January 2017:

Both rose by a total of 5% or more until December 2018. In that month both peaked, and both have been in declines since then, first shallow, and then collapsing when the coronavirus hit in March. As of this morning’s report, overall production has regained about 1/3 of its loss since December 2018. Manufacturing has

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Coronavirus dashboard for July 14: A few US States are containing the coronavirus

July 14, 2020

– by New Deal democratHeadlines for the US:Total infections: 3,364,7047 day average: 60,997Total deaths: 135,6157 day average: 780We all know that, taken as a whole, the US is failing abysmally in controlling the coronavirus. At least 13 States most notably including California are “re-closing” at least in part.  In the last week, deaths, which had continued to decline despite the renewed exponential rise in cases in many areas, finally started to rise as well:
But, in view of the announcement yesterday that, for the first time in months, on Sunday New York City did not have even a single death from the coronavirus, I thought I would take a look to see if New York, or any other States, have continued to “crush the curve.” There are a few slivers of good news.

For a benchmark, let’s

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The 2020 Presidential election nowcasts and forecast: growing evidence for a likely Biden blowout

July 12, 2020

– by New Deal democratFor the past three weeks I have posted a projection of the Electoral College vote based solely on State rather than national polls (since after all that is how the College operates) that have been reported in the last 30 days.Here’s how it works:- States where the race is closer than 3% are shown as toss-ups.- States where the range is between 3% to 5% are light colors.- States where the range is between 5% and 10% are medium colors.- States where the candidate is leading by 10% plus are dark colors.Here is the updated map through July 11:
There are no flips, except that I noticed I had overlooked a poll last month of Nebraska that actually showed a slight Biden lead. In Biden States, Arizona weakened and several others strengthened. In Trump States, a number in the

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Weekly Indicators for July 6 – 10 at Seeking Alpha

July 11, 2020

– by New Deal democratMy Weekly Indicators post is up at Seeking Alpha. While the forecasts remain inexplicably positive, the nowcast worsened slightly.As usual, clicking over and reading should bring you up to the moment on the economy, and will also reward me ever so slightly for my work.

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