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

US confirmed cases: 19,132,726*
Average cases last 7 days: 184,005
Total US deaths: 333,118
Average 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 population

Source: COVID Tracking Project

The 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 up production and improving the supply chain.

As we end 2020, let’s take a look at total infections and deaths per capita so far.

The Four big coincident indicators as of the end of 2020

All 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:

Figure one

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 months, the gains have slowed dramatically, and in November two of the four components went negative.

Jobless claims continue to show a sideways to an upward trend

New 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 an 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 their worst in early April): 


Figure 1

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, let’s also take a look at the YoY changes in all of the above metrics:

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

This 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:

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

It’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 more complicated than that.

Housing permits and starts for November: yet more evidence of an economy primed for takeoff in 2021

If there was bad news yesterday in the further increase of initial jobless claims, there was also good news in the 10+ year highs in new housing permits.

Here’s the graph of permits (blue), single-family permits (red, right scale), and housing starts (green):

Not only total permits but also the much less noisy single-family permits made 13-year highs. While the much noisier starts didn’t, the only months in the past 13 years that were better were last December through this February.

November retail sales poor m/m, but trend still good

Retail sales for November clocked in at -1.1% without adjusting for inflation. After inflation, the number was -1.3% m/m.
While the seasonally adjusted headline was certainly bad, this year tracking the unadjusted numbers is also important due to the havoc COVID is playing with consumption and employment. So the below graph shows the m/m changes over the past 5 years of both the adjusted (blue) and unadjusted (red) numbers:

As you can see, comparing this way shows that the November downturn is, relatively speaking, just a blip. Over the past 10 years November sales, unadjusted, had typically improved over 3% m/m as the Christmas season ramped up. This year sales declined -0.2%. So at the very least, we need to see if December changes the holiday dynamic this year.

Jobless claims negative trend reversal likely; expect a poor December jobs number

This week new jobless claims rose further from their recent pandemic lows, while continuing claims, seasonally adjusted, made a new pandemic low. Nevertheless, I strongly suspect the downward trend has broken.

On an unadjusted basis, new jobless claims declined by 21,335 to 935,138. Seasonally adjusted claims, on the other hand, rose by 23,000 to 885,000. The 4-week moving average also rose by 34,250 to 812,500, the highest reading in over a month. 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 seasonally adjusted numbers, and because we are at a time of year when seasonality causes the most distortions in any event, let’s also take a look at the YoY changes in all of the above metrics:

Industrial production continues to progress, at a slower rate, in November

I call industrial production the “King of Coincident Indicators” because it is the metric that is usually the decisive one for the NBER in determining when recessions and expansions begin and end.

November’s report continues the trend of a strong rebound in production, as overall production increased 0.4% from October, and manufacturing 0.8%. Total production has recovered about 70% from its April low compared with February just before the pandemic struck, and manufacturing has recovered over 80% from that point:

Even so, both are currently off their peaks by about the same percentage as the worst of the 2001 recession, and the 2016 “shallow industrial recession.”
The next graph compares overall production (blue) with nonfarm payrolls (red), both normed to 100 as of February:

Industrial production continues to progress, at a slower rate, in November

I call industrial production the “King of Coincident Indicators” because it is the metric that is usually the decisive one for the NBER in determining when recessions and expansions begin and end.

November’s report continues the trend of a strong rebound in production, as overall production increased 0.4% from October, and manufacturing 0.8%. Total production has recovered about 70% from its April low compared with February just before the pandemic struck, and manufacturing has recovered over 80% from that point:

Even so, both are currently off their peaks by about the same percentage as the worst of the 2001 recession, and the 2016 “shallow industrial recession.”
The next graph compares overall production (blue) with nonfarm payrolls (red), both normed to 100 as of February: