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

First look at the 2021 economy: housing

by New Deal democrat

First look at the 2021 economy: housing

 

As I’ve pointed out for years, housing is a long leading indicator. It can give us a decent read on the direction of the overall economy 12 to 18 months out.

So the strength in the housing market in the past 6 months has been a powerful positive omen for the economy going into 2021.

Yesterday residential construction spending for October was reported and continued that string of very positive signs. The below graph compares inflation-adjusted residential construction spending with single-family housing permits since the construction series began in 2002:

These are the two least volatile of all of the housing metrics. Since sales have to be made first and permits obtained, before construction starts, typically construction – while the least volatile of all metrics – lags permits somewhat. But right now, both are at 10 year+ highs.

I put together a much more comprehensive overview of the housing market, including mortgage rates, sales, prices, and inventory, and it is posted at Seeking Alpha.

As usual, clicking over and reading puts a penny or two in my pocket to reward me for my efforts, as well as giving you useful economic information about the future.

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November data starts out strong with a very positive ISM manufacturing index

November data starts out strong with a very positive ISM manufacturing index

 

The first November data point, the ISM manufacturing index, was reported this morning, and while it declined from last month, it remained very strongly positive.

The overall index declined from 59.3 to 57.5, and the more forward-looking new orders index declined from 67.9 to 65.1:

Since any reading above 50, however, indicates expansion, these were positive readings. The overall index is at levels equivalent to where it was during the strongest parts of the last decade’s expansion, and this month, like 3 of the last 4 months, the new orders component is equal to its strongest levels of the past 16 years.

 

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Coronavirus dashboard for November 30

Coronavirus dashboard for November 3

Total US confirmed infections: 13,383,320*

Average US infections last 7 days: 162,365 (vs. latest low of 34,354 on Sept 12)
Total US deaths: 266,873
Average US deaths last 7 days: 1,430 (vs. latest low of 701 on Oct 16)

*I suspect the real number is 18-19,000,000, or between 5 to 6% of the total US population
Source: COVID Tracking Project

Infections are out of control over much, if not most, of the country. North and South Dakota, the 2 worst States, now have had confirmed infections in over 10% and over 9% of their entire populations (and probably much worse than that since many asymptomatic cases go undetected):

While the earliest hard hit States, NY and NJ, still have had the highest death tolls, 8 more States have suffered fatalities in excess of 1 in 1000 of their total populations:

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Weekly Indicators for November 23 – 27 at Seeking Alpha

 by New Deal democrat

Weekly Indicators for November 23 – 27 at Seeking Alpha

A little later than usual, my Weekly Indicators post is up at Seeking Alpha.

While there has been no big deterioration, there are further slight signs that the out of control pandemic is taking a toll on the recovery that has been underway for the past 6 months.

As usual, clicking over and reading will bring you up to the virtual moment on the economy, and reward me a little bit for my efforts.

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Unprecedented

Unprecedented

 It occurs to me that our current president has engaged in a rather large number of actions that are unprecedented by any other president, as well as some only rarely happening and not for a long time, many of which for nearly all other politicians would make them viewed as simply unacceptable for being a president.  However, with him, there have been so many that people simply ignore most of them as being, “Oh well, there goes Trump again being himself.”

First of all, I do not have a full list of his norm-shattering precedents. In googling I saw an article that proclaimed he had violated 20 “presidential norms.” But it was behind a firewall.  And even though these may have been norms, it may be that other presidents violated at least some of them.  Anyway, here goes a partial list.

The first president to be accused of violating the emoluments clause of the Constitution.  Actually, there are two such clauses, the more famous one involving foreigners buying off a president, and then a domestic one as well.  He has been accused of violating both of them on numerous occasions, although never formally convicted of any, with a couple of law cases in court, mostly involving just the Trump Hotel in Washington.  But the list of likely violations is long and involves many properties and forms, with at least 22 foreign nations reputedly involved.  The funny thing is that just because something is forbidden in the Constitution does not immediately make it specifically against the law.  In any case, it remains that somehow no other president has even been accused of violating either of these clauses, but Trump is pretty clearly massively guilty of actually violating both of them blatantly and numerous times, with only the mildest outcry even from his critics.

He is the first president to have been legally charged with engaging in racial discrimination.  This would have been in 1973 right after he began working for his father’s real estate business.  He was not found officially guilty but had an out of court settlement in which he was ordered to stop doing what he had been doing. As it was, the Justice Dept later accused him of doing exactly that, returning to his previous racially discriminatory practices, after which he seems to have more or less stopped.  Of course there are past presidents with much worse race relations records than his, such as outright owning slaves as did most of the Founding Fathers from the South.  But in those days what they did was legal, if immoral.

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“with our breathtaking landscapes and wide-open spaces, we’re a place to safely explore.”

South Dakota: the Land of the Free.

Celebrate what makes America great, and experience the Great Faces and Great Places of South Dakota.

This is a bit of old news from September. Both South and North Dakota have emerged as the nations hot spots for Covid infections even though sparsely populated per square mile and with smaller populations than other states. The situation has worsened since this article was originally run by CBS News and if North and South Dakota were countries they would be #1 and #2 globally for cases per million with a death rate per million in the top ten globally. Is there no shame left?

South Dakota Gov. Kristi Noem’s administration announced Tuesday that it is using federal coronavirus relief funds to pay for a $5 million tourism ad campaign aimed at drawing people to the state. The move comes even as the state emerges as one of the nation’s top hot spots (#2 after North Dakota) for COVID-19 infections per million.

South Dakota with ~900,000 people ranks second in the US for Covid cases/million (89,412) and  second only to North Dakota (102,269) with a lesser population of ~800,000. The death rate per million for South Dakota is 1065/million placing it #9 in the US and after more densely populated states in the US.

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Don’t Pay Your Rent? Go to Jail in Arkansas

Arkansas is the only state where landlords can file criminal charges rather than civil complaints against tenants for falling behind on rent. Gee, whata surprise! As picked up from Crooks and Liars and originally reported by ProPublica – When Falling Behind on Rent Leads to Jail Time, ProPublica.

An Arkansas prosecutor has been fired after speaking out against a 119 year old law jailing people who are behind on rent and mostly impacting female, Black, and low-income renters. Garland County deputy prosecutor Josh Drake was let go from his position on Oct. 31 by Michelle Lawrence, the prosecuting attorney.

Josh Drake told ProPublica:

I hate that law. It’s unconstitutional. It constitutes cruel and unusual punishment, echoing other Arkansas legal experts and advocates across the political spectrum.

Under the law, which dates to 1901, if a tenant’s rent is a day overdue, they forfeit their right to be in the property. If they don’t leave their homes within 10 days of getting a notice from their landlords, they can be charged with a misdemeanor and fined for each day they overstay.

Evictions in the state can snowball from charges to warrants to arrests to jail time, leaving people with criminal records that hinder their ability to find a new home or get a job. In civil evictions, by contrast, landlords can pursue unpaid rent and other additional fees from tenants, but the process doesn’t include daily fines for staying in the property without paying or put tenants at risk of jail time.

ProPublica found that since 2018, more than 1,000 cases have been filed under the criminal eviction statute. During that time, judges have sentenced at least 37 renters to jail after charges stemming from the law, which is officially known as “failure to pay rent, failure to vacate.” Women and people of color have disproportionately been charged.

And yes, not even the pandemic (U.S. Centers for Disease Control and Prevention’s) national moratorium on evictions can stop Arkansas courts from jailing people.  Approximately 49 people have been charged, with more than two dozen cases filed since September 4. And landlords?  Landlords preferred the criminal statute to civil evictions because the criminal process is cheaper. In criminal cases, taxpayers shoulder the cost when county attorneys pursue tenants in Arkansas while in in civil eviction hearings, the landlords have to cover their attorney fees.

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State Medicaid Reported Enrollment Compared to CMS’s Reports and Covid’s Impact on Medicaid

I get commentary (in my emails) from xpostfactoid who writes on healthcare issues and also does a yeoman’s function not found else in reconciling ACA signups, the differences between the penalty-mandate vs no penalty-mandate, Medicaid signups by state in both expansion and non-expansion states, and lately the impact on Medicaid due to the Covid-19 pandemic. The data and commentary by xpostfactoid for this particular summary by me can be found here; State Medicaid enrollment totals in light of CMS’s (lagging) reports, November 27, 2020

Why track Medicaid numbers? As you well know, unemployment has increased since the start of the Covid-19 pandemic as a result of the shutdowns of businesses and government facilities. The resulting layoffs have caused many people to lose not only their healthcare but also their healthcare insurance. Two ways to qualify for healthcare insurance is on the healthcare exchanges which will still look at annual income or through state Medicaid which looks at “current” income. If you are laid off and have no income (or less than 100% FPL [unless your state says differently] or 138% FPL in expansion states0, you can qualify for Medicaid CMS’s monthly totals of state-by-state Medicaid enrollment growth during 202 as impacted by Covid-19 in 2020 is currently posted Medicaid.Gov through July reflecting:

  • five months of enrollment  as affected by the Covid-19 pandemic and
  • four-plus months in which the suspension of disenrollment mandated by the Families First Act was in effect.

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October personal income declines, but still well above pre-pandemic peak; increased likelihood of negative pandemic reversal in jobless claims

October personal income declines, but still well above pre-pandemic peak; increased likelihood of negative pandemic reversal in jobless claims

Before I turn to this week’s report on jobless claims, a brief word first about October’s personal income and spending.

Although personal income declined in October compared with September, more importantly depending on how you measure it, real personal income is still 2.6% to 3.4% *higher* than it was at its peak in February just before the onset of the pandemic:

Much of that is the emergency pandemic aid passed by Congress. When you take out such “government transfer receipts,” personal income actually continued to improve in October, but is still -0.8% below its February peak.

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