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Hale Stewart: Bonddad Blog

The Bonddad Blog is authored by Hale Stewart, a financial advisor. His blog publishes an invaluable weekly economic review on the Bond Market, International Economics, and Equity and Economics. These links along with his highly detailed review of economic trends makes this one of the top economics blogs

New jobless claims rise sharply; is the Delta wave beginning to take its economic toll?

 - by New Deal democratNew jobless claims are the most important weekly economic datapoint with regard to the effects of vaccination progress. At this point, it is also a test of how much the “delta wave” of new cases is setting economic progress back. Three weeks I wrote that, because progress in vaccinations had largely stalled, “that implies at least a stall in the decline in new claims, and - I actually suspect - an increase, perhaps to about 450,000 per week or so.”This week’s number...

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Coronavirus dashboard for July 21: brace yourself for the surge in deaths

 - by New Deal democratI have been warning since late June that the situation would likely look very different by the end of July. By 2 weeks ago, I wrote:“In the near future, there appears to be bad news and *relatively* “good” news for the US. The bad news is that the “delta wave” is spreading, and we should expect a real outbreak on the order of last summer’s by early August. The *relatively* “good” news is that the death rate is likely not to be nearly so bad, if the experience in the UK...

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Housing permits continue decline in June; more challenging YoY comparisons ahead

 - by New Deal democratFirst, a brief comment about the NBER’s declaration yesterday that the COVID recession ended in April 2020. I am not surprised at all that they chose that date. It has been clear for a year that the trough in economic activity across the board was that month (which we’ll see below as to housing, for example).  Remember that a recovery starts when economic activity improves, even if that improvement is from totally awful to almost totally awful. The only thing that...

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Coronavirus dashboard for July 19: The UK as Delta wave trailblazer for the US

 - by New Deal democratAn initial note: I am on vacation this week, so posting is likely to be sporadic. I’ll still hit the important data.Now that the Delta wave is well and truly here in the US, let’s compare it with the UK experience, which has been about 7 weeks ahead, to get an idea where we are going.Here is the long term view: As I said, the UK resurgence due to Delta started about 7 weeks before that in the US.So the experience in the UK is likely to give us a good idea where the US...

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Weekly Indicators for July 12 – 16 at Seeking Alpha

 - by New Deal democratMy “Weekly Indicators” post is up at Seeking Alpha.All timeframes continue positive, but the renewed outbreak of COVID - indeed, its uncontrolled exponential spread - is the proverbial elephant in the room, and is quite likely to Bigfoot the entire forecast and nowcast. And with the many crosscurrents, is effect on the economy is fiendishly difficult to forecast.As usual, clicking over and reading should be rewarding for you, and for me as well to the tune of a penny...

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June retail sales decline after taking inflation into account, but overall pandemic gains “stick”

 - by New Deal democratAs usual, retail sales is one of my favorite indicators, because it gives us so much information about the consumer economy. The news for June was mixed. Nominally retail sales were up +0.6% for the month. But after taking into account consumer inflation, real retail sales declined -0.3%. Still, nominal retail sales are up over 18% since just before the pandemic started, and up +12.9% taking into account inflation:Here’s what the monthly changes in real retail sales...

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Jobless claims make new pandemic lows; but the virus is back in control

 - by New Deal democratNew jobless claims are the most important weekly economic datapoint with regard to the effects of vaccination progress. At this point, it is also a test of how much the “delta wave” of new cases is setting economic progress back. Two weeks I wrote that, because progress in vaccinations had largely stalled, “that implies at least a stall in the decline in new claims, and - I actually suspect - an increase, perhaps to about 450,000 per week or so.”That certainly didn’t...

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Industrial production slightly positive overall, but with negative revisions

 - by New Deal democratIndustrial production is the King of Coincident Indicators. It is the single datum that most frequently coincides with the NBER determination of the beginning and end of recessions.Production increased 0.4% in June, but May’s result was reduced by -0.2%. The manufacturing component declined less than -0.1%, and May’s result was also reduced, by -0.3%. As a result, overall manufacturing remains 1.2% below its pre-pandemic level, and the manufacturing component is -0.2%...

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Real wages decrease sharply – at least, if you include used vehicle prices

 - by New Deal democratAs I pointed out yesterday, the big increase in inflation over the past few months has made the YoY change in real wages for nonsupervisory workers negative. Let’s take a little closer look.Here is a graph of wages for nonsupervisory workers taking overall inflation into account, normed to 100 as of January 1973 (its peak previous to the pandemic):Wages had been gradually increasing in real terms for several decades before the pandemic. The big surge in spring 2020 was...

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Consumer inflation rises the most in over a decade; will it draw the Fed’s attention?

 - by New Deal democratLet me start my take on this month’s inflation report with my concluding remarks last month: “this is not a big deal if it only lasts another month or two. But if the trend continues longer than that, it will begin to impact consumer spending, and it will get the Fed’s attention.”Well, it has definitely lasted another month. In spades.  The 0.9% increase in June was the highest since June 2008’s 1.0% increase (driven by $4+ gas).(red in the graph below) More...

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