It is undecided yet, as to whether a newly assembled Board of Governors would jointly act under the leadership of Ron Bloom, a Democrat and former Obama administration appointee, to dismiss PMG Louis DeJoy. President Biden has appointed three additional members to the Board including;

– Ron Stroman, formerly the deputy postmaster general (resigned);

– Amber McReynolds, a voting rights activist; and

– Anton Hajjar, a former American Postal Workers Union official,

to fill the three vacancies currently open. The Senate still has to approve their appointments.

If confirmed, the board of governors would have all nine seats occupied for the first time in more than a decade. It would consist of a balanced makeup of four Republicans, four Democrats, and one independent. 

It was thought that the Board would fire PMG Louis DeJoy. The Board is the only ones who can do such regardless of whether Congress stamps calls for such to happen. It also appears, the existing members appointed by former President Trump show little interest in firing DeJoy.

Democrat, Obama appointee, and Chair of the Board Ron Bloom has shown little interest in taking such action. Indeed, he reiterated recently he had worked with DeJoy on the 10-year business plan and he would support it. Previously. Ron Bloom helped write a helped write a National Association of Letters Carriers report castigating postal management for proposing to slash services and standards.

Chairman Bloom is serving in a holdover year which will expire in December. He approved of DeJoy’s appointment last year (2020).  Campaign- minded Biden, vowed to fill the board vacancies, put the Postal Service on firmer financial footing, help postal employees join unions, and defend the agency’s obligation to deliver to every address in the country. 

The postal board can only have five presidential-appointed members from the same party by law. Four board slots will expire in the next two years. Biden has an opportunity to take USPS leadership in a different direction in his first term if needed.

Perhaps I am wrong; but, I believe Biden will sit this one out for a bit while he handles other pressing issues with the pandemic, McConnell, the economy, and getting as much done before the next election in 2022. 

Biden’s Postal Board Nominees Unlikely to Spell Quick End to Postmaster General’s Tenure – Government Executive (govexec.com)

Dozens of Lawmakers Call on Biden to Replace Entire USPS Board – Government Executive (govexec.com)

Jobless claims make new pandemic lows at last

New jobless claims are likely to the most important weekly economic data for the next 3 to 6 months. They are going to tell us whether, as the number of those vaccinated continues to increase, there will be a veritable surge in renewed commercial and social activities and attendant consumer spending, leading in turn to a strong rebound in monthly employment gains. Two weeks ago I set a few objective targets: I am looking for new claims to be under 500,000 by Memorial Day, and below 400,000 by Labor Day. 

This morning was (relatively!) good news, as we finally made new pandemic lows for initial claims. On a unadjusted basis, new jobless claims fell by 100,412 to 656,789. Seasonally adjusted claims also declined by 97,000 to 684,000. The 4 week average of claims declined as well by 13,000 to 736,000. Seasonally adjusted claims also declined All of these were new pandemic lows.  

Seconding Paul Krugman: inflationary pressures will be a transient phenomenon in 2021 (but will they cause a recession in 2022?)

 – by New Deal democrat

Paul Krugman argues once’s again this morning that any increase in inflation this year as part of a post-pandemic boom will be transitory:

I agree. I want to elaborate on one point he hasn’t emphasized; namely, you can’t have a wage-price inflationary spiral if wages don’t participate!
To make my point, let me show you three graphs below, covering wages and prices in three different periods: (1) the inflationary 1960s and ‘70’s, (2) the disinflationary Reagan-era 1980s and early ‘90’s, and (3) the low inflation period of the late 1990s to the present.

Economic data and coronavirus quick hits

I really need to rouse myself to write a long-form piece on interest rates, housing, and the economy to post over at Seeking Alpha. Ugh! In the meantime, here are a few quick hits on some important or noteworthy new data.

1. New home sales – interest rates bite, but don’t panic

New home sales are the most leading, but most noisy, of housing data. Yesterday they were reported as having declined -18.3% to 775,000 annualized, a 9 month low, and 204,000 below their July peak (blue in the graph below):

For comparison, the much less volatile single family permits declined -9.8%, and remains above every other month in the past 10 years except for December and January.

Naked Capitalism had an article up in the “Links” assortment of other articles taken from various sites. The Common Dreams article touched upon one of the topics I write about and have done so over the last decade – Student Loans and Alan Collinge’s Student Loan Justice Org.

In my public discussions with Alan and his followers on Facebook, I have pointed out the $1.6 trillion or the $1.8 trillion as stated in this article are important numbers to remember. What most people do not understand, this number takes into account the principal and the interest-on-the-principal if all things are going according to plan.

But, the $1.6 trillion+ owed also includes penalties for being late, the interest associated with the penalties, rehabilitation of a loan in default, interest on the fees to rehabilitate, forbearance interest, etc. I am guessing here, and as I pointed out to Alan, these addition costs are forgotten in the total calculation of actual debt owed. These additional costs are not taken into consideration when discussing total student loan debt. Much of the application of these penalties and fees do not exist in regulated consumer loans. A couple of mis-application examples:

Coronavirus dashboard for March 22: crossing an important threshold, to the *good* side

The US is on the verge of crossing an important threshold: as of today, the 7 day average of COVID 19 deaths in the US has declined to exactly 1000:

The last time the US averaged less than 1000 deaths a week from the virus was the beginning of November, almost 5 months ago. Since the January peak, deaths have declined by 70%.

Commenter r. j. s. at MarketWatch666

Retail Sales Fell 3.0% in February After January Sales Were Revised 1.9% Higher

Seasonally adjusted retail sales decreased 3.0% in February after retail sales for January were revised 1.9% higher . . . the Advance Retail Sales Report for February (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $561.7 billion during the month, which was 3.0 percent (±0.5%) lower than January’s revised sales of $579.1 billion, but still 6.3 percent (±0.7 percent) above the adjusted sales in February of last year…January’s seasonally adjusted sales were revised up from $568.2 billion to $579.1 billion, while December’s sales were revised from $539.7 billion down to $538,338 million; as a result, the December to January change was revised up from up 5.3 percent (±0.5 percent) to up 7.6% (±0.3%) . . . the downward revisions to December sales would indicate that 4th quarter personal consumption expenditures will be revised lower at about a $5.5 billion annual rate, which would thereby reduce 4th quarter GDP by about 0.11 percentage points…estimated unadjusted sales, extrapolated from surveys of a small sampling of retailers, indicated sales were down 5.4%, from $519,588 million in January to $491,356 million in February, while they were up 2.4% from the $479,868 million of sales in February of a year ago . . .  

 by New Deal democrat

Weekly Indicators for March 15 – 19 at Seeking Alpha

My Weekly Indicators post is up at Seeking Alpha.

Both the nowcast and the short term forecast continue to be red hot. But interest rates continue to batter the long term forecast.

As usual, clicking over and reading will bring you up to the virtual moment, and reward me a tiny bit for the efforts I put in.

Larry Summer is still criticizing the American Recovery Plan.  Summers:

In his latest attack on the recent rush of stimulus, Summers told David Westin on Bloomberg Television’s “Wall Street Week” that “what was kindling, is now igniting” given the recovery from Covid will stoke demand pressure at the same time as fiscal policy has been aggressively eased and the Federal Reserve has “stuck to its guns” in committing to loose monetary policy.

“These are the least responsible fiscal macroeconomic policy we’ve have had for the last 40 years,” Summers said. “It’s fundamentally driven by intransigence on the Democratic left and intransigence and the completely irresponsible behavior in the whole of the Republican Party.”

Summers, a top official in the past two Democratic administrations, has emerged as one of the leading critics among Democrat-leaning economists of President Joe Biden’s $1.9 trillion pandemic plan. Summers warned in the interview the U.S. was facing a “pretty dramatic fiscal-monetary collision.”

He said there is a one-in-three chance that inflation will accelerate in the coming years and the U.S. could face stagflation. He also saw the same chance of no inflation because the Fed would hit the brakes hard and push the economy toward recession. The final possibility is that the Fed and Treasury will get rapid growth without inflation.

I don’t have any expertise on the macroeconomic issues, but I do disagree with his exclusive focus on macroeconomic policy, and with his view of the politics, especially his criticism of the Democratic left. 

Let’s assume that the ARP steps too hard on the gas pedal and creates some risk of inflation/stagnation/recession.  That could happen, and in a perfect world Congress might have passed a smaller bill today focused on preventing immediate suffering, and then passed additional stimulus if needed in 6 or 12 months.  I think Democrats had two good reasons not to do this.

Disappointing weekly increase in new jobless claims, but monthly trend improves; expect a 200,000+ number of new jobs in next Employment Report

 – by New Deal democrat

New jobless claims are likely to the most important weekly economic data for the next 3 to 6 months. They are going to tell us whether my suspicion is correct that, as a critical mass of those vaccinated is reached, there will be a veritable surge in renewed commercial and social activities and attendant consumer spending, leading in turn to a strong rebound in monthly employment gains. More specifically, now that further COVID relief has also been passed by Congress, last week I set a few objective targets: I am looking for new claims to be under 500,000 by Memorial Day, and below 400,000 by Labor Day. 

This morning’s data didn’t help. On an unadjusted basis, new jobless claims rose by 424,318 to 746,796. Seasonally adjusted claims rose by 45,000 to 770,000, the highest level in 4 weeks. The 4 weeks moving average, however, declined by 16,000 to 746,250.  

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):