Relevant and even prescient commentary on news, politics and the economy.

The 2020 Presidential and Senate polling nowcast: shift in the control of the Senate to democrats looks increasingly likely

The 2020 Presidential and Senate polling nowcast: shift in the control of the Senate to democrats looks increasingly likely

 

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. Remember that polls are really only nowcasts, not forecasts. They are snapshots of the present; there is no guarantee they will be identical or nearly identical in early November.

Let’s begin with Trump’s approval. After several weeks of improvement, last week Trump’s approval eroded very slightly, and this week was virtually unchanged – and remains right in its normal range for the past 3 1/2 years:

 

It is safe to say that Trump’s post-convention, “law and order” bounce has plateaued. There is no information yet as to how the passing of Justice Ruth Bader Ginsburg may impact the result.

“The US is a white Christian country. Everyone else is here on sufferance:”

“The US is a white Christian country. Everyone else is here on sufferance:” Donald Trump, James II, and the Glorious Revolution – by New Deal democrat

For the past year +, I have been reading about the History of Republics -really, a History of the Rule of Law – that has taken me through Ancient Rome, Venice, Genoa, Florence, Switzerland, the Dutch Republic, and currently the Glorious Revolution of 1688 in the UK.

There are enough parallels between that event and the US in 2020 that it is worth some more detailed comparison.

Recently I came across a quote attributed to FDR that I think perfectly encapsulates the current GOP view of the United States:

“The United States is a white Christian country. Everyone else is here on sufferance.”

Now, FDR was a total political animal. He wasn’t necessarily stating his own deeply held view. Rather, more likely he was voicing his opinion of the most prevalent political ideology of the country.

I think that quote – variously reported as “Anglo-Dutch” or “white Protestant” is spot on. It encapsulates an idea that people of color and white non-Christians (including, arguably, Catholics, or at least those who aren’t “pro-life”) are second class citizens. They are de jure equal, but are only entitled to their voice so long as they don’t disturb the hegemony of the founding white Protestants. Hence why “real America” consists of the lily-white areas of the Midwest and West, and why Whites in the South are entitled to rule their States.

Both US political parties really agree with that divide. Think about it: are Blacks and Hispanics *relatively* worse off compared to Whites when the GOP is in control?  If that is true – and I certainly believe it is – then it necessarily also means that Whites are *relatively* worse off compared to  Blacks and Hispanics when Democrats are in control.  I actually think partisans of both parties agree with both of those statements. What they differ on is which outcome is “fair.” That certainly accords with dozens of quotes I have read from partisans and regular supporters on both side of the divide.

2019: the year that the late economic expansion finally bore fruit for nearly all of society

2019: the year that the late economic expansion finally bore fruit for nearly all of society

Yesterday  (Sept. 16) the Census Bureau released its 2019 information concerning median household income and poverty rates. Unfortunately, this data is always released in September of the following year, so is already somewhat stale. Just for example, since the information is collected between February and April of the following year, we may not get complete information about the impact of the coronavirus until two years from now!

Also, since the information is across *all* households, not just wage- or salary-earning households, but includes, for example, retirees as well as the unemployed, it should not be used to infer information about wages.

That being said, in 2019 the economy was doing very well, and both un- and under-employment were reaching repeated new lows, and inflation remained subdued, real median household income rose significantly – up 6.8% over 2018:

As is obvious from the graph, this was a new all-time high.

 

Real retail sales gains join industrial production in sharp deceleration

Real retail sales gains join industrial production in sharp deceleration

Two days ago we saw that gains in industrial production had decelerated sharply in August. This morning we saw the same thing with real retail sales, one of my favorite indicators.

Nominal retail sales were up +0.6% in August. Meanwhile, July’s reading was revised downward by -0.3%. Since in July and August consumer inflation was up +0.6% and +0.4%, respectively, that means revised *real* retail sales rose +0.3% in July and +0.2% in August. This means that the net result over two months was lower than previously thought for the month of July alone.

Nevertheless real retails sales did establish a new record high, above any reading from before the pandemic:

Historically consumption has led employment (/2) by several months (albeit with lots of noise), and has an even closer relationship with aggregate hours (all shown YoY below):

 

Industrial production improves in August, but with sharp deceleration

Industrial production improves in August, but with sharp deceleration

If the jobs report is the Queen of Coincident Indicators, industrial production is the King. It, more than any other metric, is found at the turning points where recessions both begin and end.

This morning’s report of industrial production for August shows that the recovery from the bottom of the coronavirus recession has come close to stalling out.

Overall industrial production grew by 0.4%, while July was revised higher by 0.5%. Manufacturing production grew just under 1.0%.  July was likewise revised higher by 0.6%. Here are the overall totals:

The good news is that manufacturing production has gained back almost 70% of its decline from March. Overall production has gained a little over half of its decline.

 

Coronavirus dashboard for September 14: cases in the Midwest surge; the Northeast still lags Canada

Coronavirus dashboard for September 14: cases in the Midwest surge; the Northeast still lags Canada

 

Total US cases: 6,519,573
Average cases last 7 days: 34,744
Total US deaths: 194,071
Average deaths last 7 days: 733

 Source: COVID Tracking Project

I continue to expect the pandemic to wax and wane in relative terms at least until next January 20, as the public reaction in various States varies between panic and complacency.

Let’s start by comparing the rates of cases and deaths in the US with the North American standard – Canada:

In contrast with the US, Canada averaged 18 cases per day per million people in the last 7 days (vs. 105 for the US), and 0.1 deaths (vs. 2.2 for the US). That is what we could have as well if there were competent Federal leadership.

 

The 2020 Presidential and Senate nowcast: the races congeal

The 2020 Presidential and Senate nowcast: the races congeal

 

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. Remember that polls are really only nowcasts, not forecasts. They are snapshots of the present; there is no guarantee they will be identical or nearly identical in early November.

Let’s begin with Trump’s approval. After several weeks of improvement, this week Trump’s approval eroded very slightly – but remains right in its normal range for the past 3 1/2 years:

 

It is safe to say that Trump’s post-convention, “law and order” bounce has plateaued (note there have not been any big BLM demonstrations in the past week that have produced pictures of burned-out businesses).

In any event, here is the updated map through September 5. To refresh, here is how  it works:

Consumer inflation continues to accelerate YoY, but so far no big problem

Consumer inflation continues to accelerate YoY, but so far no big problem

 

The consumer price index for August was reported up +0.4% this morning. This is the third straight big increase. Below I show this plus the more stable consumer prices minus gas (red):

Here’s what the monthly changes look like over the past 10 years:

 

Improvement in initial and continuing claims stalls out

Improvement in initial and continuing claims stalls out

This morning’s jobless claims report shows that the trend of “less worse” news has at least temporarily ended, at a level of about 150,000 higher than the worst weekly levels of the Great Recession.

On a non-seasonally adjusted basis, new jobless claims rose for the second week in a row, by 20,140 to 857,148. After seasonal adjustment (which is far less important than usual at this time), claims were unchanged at 884,000, tied for their “best” reading since the pandemic began. The 4-week moving average declined by 21,750 to a new pandemic low of 970,750:

Continuing claims, on both an unadjusted and seasonally adjusted basis rose from their pandemic lows of last week, by 54,472 to 13,197,059, and by 93,000 to 13,385,000 respectively:

 

Sorry, partisans in denial: swing State polls have tightened

Sorry, partisans in denial: swing State polls have tightened

It’s a slow economic news week, so let me follow up with some further information about movement in the polls. My usual caution: polls are *NOT* forecasts, just nowcasts estimating what would happen if the election were today.

In the past few days, there is further evidence that Trump’s “law and order” message has resonated with at least a small subset of presumably white, probably older, voters. Below are some graphs from Nate Silver’s site of a few swing and swing-ish States. Note his graphs take into account national, as well as State-specific polls, but the net result is typically within 1% of what my average of State-only polling shows.

There has been a considerable narrowing of the race in Florida:

And also, to a bit lesser extent, in Pennsylvania: