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

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

 

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.”

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

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

This 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 be no “V-shaped” immediate recovery back to pre-pandemic levels. Almost all of which has been totally unnecessary, and has been caused by incompetent leadership at the very top.

But after about a month of stalling, on a very very very relative basis, I will take this “good” news.

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

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

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

 

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

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

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’s 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.

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Q2 GDP does not bode well for early 2021

Q2 GDP does not bode well for early 2021

There 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 corporate profits are delayed by one more month, I use proprietors’ income as a temporary proxy. Let’s look at each in turn.

Real private residential fixed investment decreased by over 10% q/q. Real GDP decreased a little less than 10%:

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Catching up with wages, income, and layoffs

Catching up with wages, income, and layoffs

Yesterday 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 adjusted terms wages for equivalent jobs rose even more for the quarter:

I was expecting very bad news, so I will take this “less good” news with a sigh of relief.

Income

Personal income and spending for June were also released this morning. The bottom line is that income declined slightly, while spending rose:

Boosted by the $1200 relief check in April, and supplemental unemployment assistance of $600/month, income remains 5% higher than in February. Spending, meanwhile, has made up more than 1/2 of its April decline. This is also a positive – but one month ago. Since the supplemental payments end as of today, this picture is likely to change in the high-frequency data beginning in a week or two, although it won’t show up in the monthly data until August’s is released at the end of September.

Layoffs

Yesterday’s initial and continuing claims continued the recent string of bad news. While the important non-seasonally adjusted initial claims did make a pandemic low, these were still over 1.2 million for last week. On an adjusted basis, initial claims rose again:

Continuing claims for two weeks ago also rose on both an adjusted and non-seasonally adjusted basis:

In other words, both layoffs and unemployment are likely increasing. We’ll find out next week with the July employment report whether new hires and rehires continued to outpace layoffs, as they have in the past two months, or not.

So the good news – at least for now – is that we do not appear to be in a wage-deflationary spiral. The bad news is that the underpinnings of the good news has started to go away in the past few weeks.

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

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

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 have created a spreadsheet (below)  showing the 2016 Presidential result, and 2020 Presidential and Senate polling both in the contested States that we know of, and the States where we are flying blind. The final column is the direction of change comparing 2016 vs. 2020 Presidential polling followed by 2016 Presidential result vs. 2020 Senate polling. Discussion follows below the chart (numbers are %-ages):

State 2016
Presidential
Result
2020
Presidential
Polling
2020
Senate
Polling
2020
Change from
2016
Alaska T+14.7 T+3 D-9 D+11.7, D+5.7
Iowa T+9.4 T+1 D+2 D+8.4, D+11.4
Kansas T+20.5 T+12 D+1 D+8.5, D+22.5
Montana T+20.2 T+9 Even D+11.2, D+20.2
Nebraska-2^ T+2 B+7 N/a D+9, N/a
S. Carolina T+14.3 T+5 D-4 D+9.3, D+10.3
Idaho T+21.7 N/a N/a N/a
Nebraska T+25.0 N/a N/a N/a
N. Dakota T+45.7 T+17*(*Mar) N/a D+28.7, N/a
S. Dakota T+29.8 N/a N/a N/a
West Virginia T+42.1 T+35*(*Jan) N/a D+7.1, N/a
Wyoming T+46.3 N/a N/a N/a

^Congressional District

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

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

 

Total 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 the fear generated by big new outbreaks.

The complacency of May gave rise to new outbreaks that showed up in June and deaths that have shown 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 average in cases (solid line) and deaths (dotted line, separate scale) per capita for the US:

 

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June durable goods orders continue rebound

June durable goods orders continue rebound

Last 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!

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

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 even counting States that are only “leaning” in his direction:

But there has been a fair amount of polling in the past week or so. The below map shows only those States that have been polled in the last 10 days. The only change in the color coding is that any “lean” of even less than 1% is shown in the appropriate color (to differentiate polled from non-polled States):

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