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When should we begin a see a real improvement back towards “full employment”?

Pandemic job losses: when should we begin a see a real improvement back towards “full employment”?

Let’s take a deeper look at where employment stands as we begin to see the end of the pandemic in sight.

As I and many others noted last Friday, although with the exception of one month there have been job gains every month starting last May, at the pace of the last few months it would take 2 years or more just to get back to the level of employment just before the pandemic struck.

But breaking down those losses between aggregate hours and aggregate payrolls is illuminating. Here’s a look at the YoY% change in jobs, hours, and payrolls for the last 3 recessions and recoveries:

Coronavirus dashboard for March 8: Update on the effect of vaccinations

Coronavirus dashboard for March 8: Update on the effect of vaccinations

My first post on the coronavirus was almost exactly one year ago, on March 10, 2020, “This is what exponential growth looks like,” warning that exponential spread was exactly what had started to happen in the US.
 We are now finally averaging the administration of over 2 million doses of vaccine per day, and according to the CDC almost 60 million people constituting nearly 20% of the US population have already received at least their first dose:



Nursing home cases have declined by about 55,000 per week since vaccines started to be administrated, although it is noteworthy that there has been a plateau in the past 3 weeks:

Initial jobless claims make further progress towards November lows

Initial jobless claims make further progress towards November lows

Last week I “pre-debunked” the idea that a lack of reporting in Texas skewed the big decline in claims, concluding that “being very generous, the ‘real’ seasonally adjusted number of initial claims at worst probably would have been only about 30,000 higher – I.e., 760,000 – but for Texas issues.” 

That observation was validated this week, as last week’s 730,000 number was only revised higher by 6,000 to 736,000. And the *relatively* good news continued.

This week, on a unadjusted basis, new jobless claims increased by 31,519 to 748,078. Seasonally adjusted claims increased by 9,000 to 745,000. The 4 week moving average declined by 17,250 to 790,750. 

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): 

Household debt and the pandemic

Household debt and the pandemic

This is something I used to pay a lot more attention to back around the time of the Great Recession. How stretched were American households in paying their monthly bills? The Federal Reserve publishes a quarterly update tracking this issue. Two of the metrics in that quarterly update are debt service payments and financial obligations, respectively, as percents of household disposable income. The last update was in December, for Q3 2020. The Q4 figure should be released later this month.


And the story is how strong of an impact the pandemic stimulus has made on household balance sheets. Here’s the graph, that pretty much speaks for itself:

Both measures were by far at all-time lows in Q2, and increased slightly in Q3.

The Dakotas already appear to be shambling towards herd immunity

Coronavirus dashboard for March 3: as good news on vaccinations accumulates, the Dakotas already appear to be shambling towards herd immunity

There is more and more good news on the vaccination front. In addition to the fact that the single-dose Johnson and Johnson vaccine has been approved, President Biden has made use of the Defense Production Act to enlist competitor Merck in additional production of the J&J vaccine. Biden also announced that there would be enough vaccine produced to supply doses for every American adult by the end of May.


Further, the pace of vaccination has picked up to new highs since the setbacks due to recent weather, with the 7 day average just short of 2 million per pay at 1.946 million as of yesterday:


And just shy of 80 million doses have been administered – 78.6 million as of yesterday:

Manufacturing and housing – turn even hotter

Two leading sectors of the economy – manufacturing, and housing – turn even hotter

Last month I wrote that both the manufacturing and housing sectors were “on fire.” If anything, this month they turned white hot, with both construction spending and ISM manufacturing data at levels not seen in years.


The overall ISM manufacturing reading rose from 58.7 to 60.8, tying the highest reading since the Great Recession, and indeed since 2004. The even more leading new orders subindex also rose from 61.1 to 64.8, not quite as high as readings earlier in autumn 2020:

January personal income and spending show how important government stimulus has been to keeping the economy afloat

January personal income and spending show how important government stimulus has been to keeping the economy afloat

This morning’s report on January personal income and spending shows just how important the stimulus packages enacted by the federal government both last spring and last month have been to sustaining the economy.
After adjusting for inflation both personal income and spending rose in January, by +9.7% and +2.0%, respectively:



The huge increase in income is not a mistake. It follows from the renewed Congressional stimulus package providing $600 checks to most households. And it’s pretty obvious that had an impact on spending, which rose to levels equivalent to 2019 and only about 2% off-peak.

New home sales rise m/m, but signal caution for housing market going forward

New home sales rise m/m, but signal caution for housing market going forward

New home sales increased to a three month annualized high of 923,000 in January. This is of a piece with the positive news last week on housing permits. At the same time, the pace remains below the recent high of 979,000 annualized set six months ago in July. The below graph compares housing starts (blue) with the much less volatile single family permits (red) and the even more volatile, and heavily revised, new home sales (gold), normalized to 100 as of January 2020:



Initial jobless claims: it appears that the worst of the winter 2020-21 increase is behind us

Initial jobless claims: it appears that the worst of the winter 2020-21 increase is behind us

Let me start off this week’s review of initial jobless claims by pre-debunking something I am sure is going to be said elsewhere: a lack of reporting in Texas did *not* appreciably skew this week’s numbers. Applying the same workaround I did for Hurricanes Sandy and Harvey, I.e., subtracting the affected State’s data from the unadjusted number, to see how much it is at variance with all the other States, shows that Texas’s underreporting due to its electricity crisis was less than 20,000 at worst in a week with little seasonal adjustment. In other words, being very generous, the “real” seasonally adjusted number of initial claims at worst probably would have been only about 30,000 higher – I.e., 760,000 – but for Texas issues.

Additionally, last week’s nationwide numbers were actually revised *down* by 20,000, unlike the two prior weeks which saw very large upward revisions.

With those two introductory remarks out of the way, let’s look at the data. 

This week, on a unadjusted basis, new jobless claims declined by 131,734 to 710,313. Seasonally adjusted claims decreased by 111,000 to 730,000. The 4 week moving average declined by 20,500 to 807,250. 

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): 

Vaccinations start to have a dramatic effect

Coronavirus dashboard for February 23: vaccinations start to have a dramatic effect

Totals US deaths, Cases, vaccinated one dose and two doses:

– Coronavirus confirmed deaths: 500,310

– Confirmed infections: 28,190,159

– One Dose vaccinations: 44,138,118, and

– Two Dose vaccinations: 19,438,495.

The good news is, roughly 9.5% of the US population age 18 or over has received both doses of a vaccine. Over 20% has received at least one dose.
The bad news is that we have reached the milestone of half a million dead. Further, probably at least 40,000,000 people have been infected, since many who have no or mild symptoms don’t ever get tested.

Here’s the graph of the 7 day average of new infections and deaths for the US over the last 12 weeks:



While there has been a decline of over 2/3’s in infections, and 40% in deaths, this only puts us even with the very worst levels of the summer outbreak.