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

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

 

A 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:

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

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

Retail 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.

 

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

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

 

Industrial 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 regained about 1/2 of its loss.

 

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

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

Headlines for the US:
Total infections: 3,364,704
7 day average: 60,997
Total deaths: 135,615
7 day average: 780

We 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:

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.

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

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

 

For 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 Mississippi valley weakened significantly. And this morning another Texas poll showed a Biden lead, although not enough to move that State out of the “toss-up” range.

 

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Initial and continuing claims, JOLTS show labor market “less awful” improvement continues – for now

Initial and continuing claims, JOLTS show labor market “less awful” improvement continues – for now

Weekly initial and continuing jobless claims have been giving the most up-to-date snapshot of the continuing economic impacts of the coronavirus on employment. This week continues the trend of slight improvement (or, more truly, slightly less awful).

Below are initial jobless claims both seasonally adjusted (blue) and non- seasonally adjusted (red). The non-seasonally adjusted number is of added importance since seasonal adjustments should not have more than a trivial effect on the huge real numbers:

There were 1.400 million new claims, 31,000 less than one week ago. After seasonal adjustment, this became 1.314 million, 99,000 less than last week’s number. The good news is, this is the smallest weekly decline since the worst reading in April. The bad news is, it is only 250,000 (or 17%) less than five weeks ago. In other words, the improvement is slight and huge second-order impacts in terms of new layoffs continue to spread.

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Coronavirus dashboard for July 8: deaths in the South and West finally suggest increasing trend

Coronavirus dashboard for July 8: deaths in the South and West finally suggest increasing trend

Coronavirus death statistics have been plagued recently by State data dumps, where months of deaths have been released on a single day. In the past 2 weeks, both NJ and NY’s such releases had skewed the numbers. As of today, both are out of the 7 day statistics, so I thought I would update again.

One bit of good news, statistics-wise, is that the COVID tracker now has the ability to include hospitalizations (although FL still isn’t fully releasing its numbers). So here are hospitalizations per capita in the 4 US regions:

In the past few weeks, hospitalizations have continued to decline in the Northeast, stayed flat in the Midwest, risen slightly in the West starting 14 days ago, and increased by more than 50% in the South starting 19 days ago.

 

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Coronavirus dashboard for July 8: deaths in the South and West finally suggest increasing trend

Coronavirus dashboard for July 8: deaths in the South and West finally suggest increasing trend

Coronavirus death statistics have been plagued recently by State data dumps, where months of deaths have been released on a single day. In the past 2 weeks, both NJ and NY’s such releases had skewed the numbers. As of today, both are out of the 7 day statistics, so I thought I would update again.

One bit of good news, statistics-wise, is that the COVID tracker now has the ability to include hospitalizations (although FL still isn’t fully releasing its numbers). So here are hospitalizations per capita in the 4 US regions:

In the past few weeks, hospitalizations have continued to decline in the Northeast, stayed flat in the Midwest, risen slightly in the West starting 14 days ago, and increased by more than 50% in the South starting 19 days ago.

 

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Coronavirus dashboard for July 7, 2020: deaths as a *very* lagging statistic

Coronavirus dashboard for July 7, 2020: deaths as a *very* lagging statistic

Total diagnosed US coronavirus cases: 2,928,418
7 day average: 50,135
Total US coronavirus deaths: 122,915
7 day average: 480

The renewed exponential spread of coronavirus cases is continuing. We will probably be over 3 million cases within 48 hours. Including all of the undiagnosed cases (especially in April and May), probably about 2.5%-3% of the entire US population has been infected by this point.

There is still not enough medical mask production. There is still not a thorough testing program in place. There is still not a significant tracing or isolation protocol in place. There will be none of these until at least January 20, 2021.

The big paradox remains why deaths have continued to decline, albeit very slowly, even while new cases have skyrocketed for at least the last 3 weeks. A detailed look at the top 10 states for new infections per capita, and comparing them with the Northeast megalopolis, is especially telling.

To begin, here are the 4 regions of the US by new cases per capita:

And here are the same 4 regions by deaths per capita:

 

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