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Real retail sales continue (inexplicably) strong, still bode well for employment

Real retail sales continue (inexplicably) strong, still bode well for employment

 

This morning we got two important monthly September reports: industrial production and retail sales.

I have more to say about industrial production, and some general economic analysis about retail sales, which are pending at Seeking Alpha. I will post a link once that article goes up. UPDATE: Here’s the link: Link

For this blog, let’s focus on how real retail sales are likely to affect employment.

Just to start, here is are CPI adjusted retail sales. You can see that they have actually jumped once the Congressional stimulus kicked in, and have remained well ahead of pre-pandemic levels:

Figure 1

Jobless claims: only one week’s data, but cause for significant concern

Jobless claims: only one week’s data, but cause for significant concern

 

Today marked the biggest increase in new jobless claims in two months, and one of the two biggest increases since May, while the slightly lagging continuing claims continued to decline.

On a non-seasonally adjusted basis, new jobless claims rose by 76,670 to 885,885. After seasonal adjustment (which is far less important than usual at this time), claims rose by 53,000 to 898,000. The 4-week moving average also increased by 8,000 to 866,250:

Here is a close-up of the last four months highlighting the overall glacial progress in initial claims since the beginning of August:

Coronavirus dashboard for October 14: winter is coming

Coronavirus dashboard for October 14: winter is coming

Total US confirmed cases: 7,806,805*
Average cases last 7 days: 51,038
Total US deaths: 215,887

Average deaths last 7 days: 714*Actual cases probably more like 14 million, or over 4% of the US populationSource: COVID Tracking ProjectToday let’s take a look at the most recent upsurge in COVID not just in the US, but in the entire West.Here is the 7 day average of new cases per capita in the US, Canada, and the 5 most populous countries in Europe:

Every single country, even Germany, is experiencing an upsurge. France, Spain, and the UK are having an even worse outbreak than the US.

 

Consumer prices rise a “normal” 0.2% in September

Consumer prices rise a “normal” 0.2% in September

In September Consumer prices rose a “normal” 0.2%, the first such typical increase since the pandemic began (blue in the graph below):

For the past 40 years, recessions had typically happened when CPI less energy costs (red) had risen to close to or over 3%/year. We are nowhere near that now (last 15 years shown in graph):

 

College educational attainment by age demographic

College educational attainment by age demographic

 

There is no economic data today due to the Columbus Day observance.

So let me drop this graph of a metric I have been trying to find, of college educational attainment by age demographic, that I finally came across a couple of days ago:

It is commonplace that among Whites at least, support for Democrats is highly correlated by a college education. What is unclear is whether that is actually a function of education itself, or is simply confounded by age group.

 

Coronavirus dashboard for October 9: everybody has to touch the hot stove at least once

Coronavirus dashboard for October 9: everybody has to touch the hot stove at least once

 

Total confirmed US infections: 7,605,218*
Average infections last 7 days: 46,869
Total US deaths: 212,762

*Actual number is probably 5 to 7 million higher, or about 4% of the total US population

Source: COVID Tracking Project

In the last 4 weeks, the average number of new infections has risen again. Here is the breakdown by regions:

Here is the same for deaths:

 

August JOLTS report conforms to prior early recession recovery pattern

August JOLTS report conforms to prior early recession recovery pattern

 

Yesterday’s JOLTS report for August showed a jobs market that is still just beginning to mend. Hires were up, and layoffs and discharges were down, which is good, but job openings and voluntary quits both declined.

We are far enough along past the worst of the pandemic jobs losses that it is worthwhile to compare the state of the various JOLTS components with the 2 previous recoveries from recession bottoms in the series’ histories (this because the JOLTS data only dates from 2001.

In the two past recoveries:

  • first, layoffs declined
  • second, hiring rose
  • third, job openings rose and voluntary quits increased, close to simultaneously

Let’s examine each of those in turn. In each case, I break out 2001-19 in a first graph and then this year in a second.

This first graph compares layoffs and discharges (blue) with the 4 week average of initial jobless claims (red):

Figure 1

Jobless claims: yet another week of glacial progress

Jobless claims: yet another week of glacial progress

 

Today marked yet another week of glacial progress in initial jobless claims, at levels worse than the worst weekly levels of the Great Recession.

On a non-seasonally adjusted basis, new jobless claims rose by 5,312 to 804,307. After seasonal adjustment (which is far less important than usual at this time), claims fell by 9,000 to 840,000, another new pandemic low. The 4-week moving average also  declined by 13,250 to a new pandemic low of 857,000:

Here is a close-up of the last two months highlighting the glacial progress in initial claims during the past 7 weeks:

 

In 2020, the “Blue Wall” is holding

In 2020, the “Blue Wall” is holding

 

At 10 a.m. Eastern time we’ll get the JOLTS report for August. I plan on posting on that later today, but in the meantime here’s an update on the Midwest “Blue Wall” that failed in the 2016 election.

Below are the smoothed poll results for Michigan, Minnesota, Pennsylvania, and Wisconsin through yesterday:

Figure 1

2020 Presidential and Senate polling nowcast through October 3: a partial rebound for Biden

2020 Presidential and Senate polling nowcast through October 3: a partial rebound for Biden

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.

A special reminder: these polls were all taken before Trump’s COVID-19 diagnosis, and only a few were entirely after the debate.

The best news for Trump, and the worst news for Biden, is that despite an awful debate performance, Trump’s approval *rose* 0.7% over the past week, while his disapproval dropped 0.4%. He is now near the upper end of his normal range of approval going back 3.5 years:

This may be a reaction to his nomination of a Judge for the Supreme Court who is on record saying that both Roe v. Wade and the ACA should be overturned. It is way too soon for Trump’s COVID-19 diagnosis to be showing up in these polls.