Coronavirus dashboard for June 17: big progress since 1 year ago; big “Delta” challenge still ahead

One year ago today, in my Coronavirus Dashboard for June 17, here was my graph of cases

Which I described as:

As shown in the graph above, [after Arizona at 214 per million population] the remaining “top 10” are all States in the Confederacy, High Plains, and Mountain West. In order, (showing rates of new infections per million as of June 15 in parentheses) they are: Alabama (156), Arkansas (150), South Carolina (125), Louisiana (127), North Carolina (117), Utah (102), Mississippi (98), Florida (83), and Iowa (83).

One year later, the scale of the current pandemic is an order or more of magnitude lower. But the regions with the worst outbreaks remain the same (sadly, ingrained behavior patterns are incredibly resistant to change).
Let’s begin the current situation with CNN’s graph of vaccination rates in the 50 States plus DC and PR:

May housing permits and starts continue down from recent peak

In May housing permits (blue in the graph below), including the least volatile single-family permits (red, right scale), continued to decline from their January peak. Meanwhile, the more volatile and slightly lagging housing starts (green) increased, but remained below their March peak:

The level of construction activity as high as or higher than its pre-pandemic peak is continuing. On the other hand, with a 10% decline in permits, and 9% in starts, the minimum decline to be consistent with a possible upcoming recession has nearly been met (while a 20% decline is more typical). For now, I interpret this to mean a sign of a slowing down of economic growth next year.

The decline in new jobless claims stalls, as the “delta” variant is ready to strike the unvaccinated States

New jobless claims continue to be the most important weekly economic data point, as increasing numbers of vaccinated people and outdoor activities have led to an abatement of the pandemic, with both new infections and deaths at their lowest point since the onset of the pandemic in March 2020. I’ll have more to say on the intersection of the pandemic with claims in the conclusion.

My final objective is for claims to average 325,000 or below, which would signify a return to normal expansion levels in the past 30 years.

Turning to this week’s report, new jobless claims rose 37,000 to 412,000, the first increase in weekly claims in nearly 2 months. The 4 week average of claims declined by 8,000 to 395,000, a new pandemic low. (Note that I have discontinued comparisons of non-seasonally adjusted claims, as the period of lockdown distortions YoY has passed.)
At the peak of the pandemic lockdowns, new claims were running 6 million to 7 million per week. Here is the trend since the beginning of last August:

Commenter RJS and MarketWatch 666 blogger

Seasonally adjusted retail sales fell 1.3% in May after retail sales for April were revised 1.4% higher . . . the Advance Retail Sales Report for May (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $620.2 billion for the month, which was a decrease of 1.3 percent (±0.5%) from April’s revised sales of $628.7 billion, but 28.1 percent (±0.7 percent) above the adjusted sales of May of last year…April’s seasonally adjusted sales were revised from the $619.9 billion reported last month to $628.7 billion, while March sales were revised from $619.8 billion to $623.12 billion, which meant that March to April percent change was revised from virtually unchanged (±0.5%) to an increase of 0.9 percent (± 0.2 percent) . . . the $3.3 billion upward revision to March sales should increase nominal first quarter PCE at around a $13 billion annual rate and add about 0.23 percentage points, give or take, to 1st quarter GDP when the 3rd estimate is released at the end of the month . . . estimated sales before seasonal adjustments, which were extrapolated from surveys of a small sampling of retailers, indicated sales actually rose 3.0% before the adjustment, from $625,636 million in April to $644,362 million in May, while they were up 27.7% from the $504,607 million in actual sales of May a year ago . . .

Included below is the table of the monthly and yearly percentage changes in sales by business type taken from the Census pdf….the first double column below gives us the seasonally adjusted percentage change in sales for each type of retail business from April to May in the first sub-column, and then the year over year percentage change for those businesses since last May in the 2nd column; the second pair of columns gives us the revision of last month’s April advance monthly estimates (now called “preliminary”) as revised with this report, likewise for each business type, with the March to April change under “Mar 2021 r” (revised) and the revised April 2020 to April 2021 percentage change in the last column shown…for your reference, our copy of the table of last month’s advance April estimates, before this month’s revision, is here . . .

Why Are Infrastructure Costs So High In The US?

Sorry, but anybody wanting some simple answer on this one, especially an ideologically neat one, sorry, there is not one, Indeed, on this important issue, there is a large problem, but not remotely a clear answer regarding why there is this large and important problem.

For numbers on this problem, I draw on a Washington Post column yesterday by Catherine Rampell. Here are some of the crucial data. In the early 1930s, just to pick one major infrastructure project, the Oakland-Bay bridge was approved and built within four months.  Yeah, the Great Depression.  But now compared to Europe, where supposedly they have higher labor costs and more regulations, well: a tunnel in Seattle cost three times as much as one in Paris and seven times as one in Madrid. This is not an oddball, this is how it is.  Infrastructure investments in the US now cost multiple times what it does abroad, and these are in nations where labor and environmental concerns are being taken seriously.

So, what is going on here? The very bright and knowledgeable Rampell confesses that not only does she not know, but she cannot find anybody who can explain it. In a way this looks like the high costs of medical care in the US.  This is  a much more politicized matter, but when one digs seriously into the research there seems to be no single reason, a whole series of matters, not easily resolved.

The issue of infrastructure lacks some of the matters healthcare has, such as how the US is the only nation in the world not having universal healthcare, which many of us think would lead to lower healthcare costs for various reasons. But what is responsible for the now high costs of infrastructure investment in the US, some of the obvious culprits there for healthcare are not there.

Your money or your life. Highway robbery has been around since. On the high seas, was known as piracy. Been writ that pirates didn’t always even offer the choice. All made for generations of good bedtime reading for youth. And, for mock sword, and bow and arrow, fights. And, really bad movies. Thanks, Howard Pyle, Robert Louis Stevenson, …, and Walt Disney. No thanks, Errol Flynn.

These days, it’s neither sword nor bow and arrows, musket nor cannon. It’s malware. Goes by cyberattack or ransomware attack. A malware fight? Has no lilt. Aargh! I’ve been hit by a virus.

First, there had to be computers. Ransomware showed up; around 1980, about the time computers got really going. By floppy or tape, then. Your cashier check or you crash. No panache; besides, too easy to trace. 1983, cryptographer David Chaum came up with the idea of electronic money. In 1995, he came up with digicash, which was untraceable.

Then, came 2008. Digital currency, most often known as bitcoin, was born out of the 2008 financial crisis. Obviously, something needed to be done about banks. Fair to say that those most knowledgeable were compromised, so it fell to those with lots of imagination and little actual knowledge. As a first attempt, these less than knowledgeable came up with a combination of butter churning and mining by computer which they dubbed bitcoin, or cryptocurrency.

Others, with some imagination of their own, saw bitcoin as an opportunity. Amongst them were ransomware hackers. Now it was by email, your bitcoins or your data. Bitcoins were pretty much untraceable. Russia, for a small fee, provided the Sherwood Forests, the Caribbean Isle. Voila, for a small fee, capitalism provides the likes of GroupSense to negotiate with the hacker.

Keep the good and throw away the bad. Some, like Sen. Elizabeth Warren, see ways that digital currency could solve some of the problems inherent banking, such as access, overcharging, …. Liz had a lot to say about the bad aspects.

Industrial production on the verge of exceeding pre-pandemic level

Industrial production is the King of Coincident Indicators. It is the single datum that most frequently coincides with the NBER determination of the beginning and end of recessions.

In May, total production increased +0.8%. Manufacturing production increased +0.9%. Both current readings are the highest since the onset of the pandemic:

Figure 1

Total production is only 1.4% below its February 2020 level, and manufacturing production is a mere 0.3% below that level.

If there is another positive report next month, exceeding the February 2020 level, and Q2 GDP is as positive as has been forecast, then the NBER may well decide that the pandemic recession has officially ended (with the most likely trough date being set at April of last year).

May Retail Sales Fell 1.3% After April Sales Were Revised 1.4% Higher

Seasonally adjusted retail sales fell 1.3% in May after retail sales for April were revised 1.4% higher . . . the Advance Retail Sales Report for May (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $620.2 billion for the month, which was a decrease of 1.3 percent (±0.5%) from April’s revised sales of $628.7 billion, but 28.1 percent (±0.7 percent) above the adjusted sales of May of last year . . . April’s seasonally adjusted sales were revised from the $619.9 billion reported last month to $628.7 billion, while March sales were revised from $619.8 billion to $623.12 billion, which meant that March to April percent change was revised from virtually unchanged (±0.5%) to an increase of 0.9 percent (± 0.2 percent) . . . the $3.3 billion upward revision to March sales should increase nominal first quarter PCE at around a $13 billion annual rate and add about 0.23 percentage points, give or take, to 1st quarter GDP when the 3rd estimate is released at the end of the month . . . estimated sales before seasonal adjustments, which were extrapolated from surveys of a small sampling of retailers, indicated sales actually rose 3.0% before the adjustment, from $625,636 million in April to $644,362 million in May, while they were up 27.7% from the $504,607 million in actual sales of May a year ago . . .

Included below is the table of the monthly and yearly percentage changes in sales by business type taken from the Census pdf . . . the first double column below gives us the seasonally adjusted percentage change in sales for each type of retail business from April to May in the first sub-column, and then the year over year percentage change for those businesses since last May in the 2nd column; the second pair of columns gives us the revision of last month’s April advance monthly estimates (now called “preliminary”) as revised with this report, likewise for each business type, with the March to April change under “Mar 2021 r” (revised) and the revised April 2020 to April 2021 percentage change in the last column shown . . . for your reference, our copy of the table of last month’s advance April estimates, before this month’s revision, is here . . .

May retail sales decline, but 10%+ gain in retail sales since the onset of the pandemic remains intact

[Note: I’ll comment on industrial production in a separate post later]

I feel like I could simply repost my retail sales piece from one month ago, because the story is the same: at first glance, May’s retail sales report, like April’s, looks like a big miss, as sales declined -1.3% nominally, and after adjusting for inflation, declined -2.0%.

But the important point is that the big jump in March didn’t get taken back.  As I wrote then: “if the big March gain in sales isn’t taken back in the next month or two, then there’s likely to be a similarly large jump in employment by the end of summer.” Further, I have fully expected the big jump in sales and income fueled by stimulus payments to peter out. In fact, some significant declines for a few months might actually be a *good* thing. Let’s take a look, and I’ll explain why.

Here are nominal retail sales since the modern series started in 1994:

Figure 1

Record High Job Quitting; Record Low Layoff Rate, MarketWatch 666, AB Commenter and Blogger RJS

The Job Openings and Labor Turnover Survey (JOLTS) report for April from the Bureau of Labor Statistics estimated seasonally adjusted job openings jumped by by 998,000, from 8,288,000 in March to 9,286,000 job openings in April, after March’s record job openings were revised 165,000 higher, from 8,123,000 to 8,288,000 . . . April’s jobs openings were up by 37.5% from the beginning of this year, and also more than double the 4,630,000 job openings reported for April a year ago, as the job opening ratio expressed as a percentage of the employed rose from 5.4% in March to 6.0% in April, and it was up from 3.4% a year ago . . . the greatest percentage increase in April job openings was in the accommodation and food services sector, where openings jumped by 349,000 to 1,338,000, while job openings in private educational services services fell by 23,000 to 883,000… (details on job openings by industry and region can be viewed in Table 1) . . . like most BLS releases, the press release for this report is easy to understand and also refers us to the associated table for the data cited, which are linked to at the end of the release . . .