by Calculated Risk on 5/07/2020 04:57:00 PM

From NPR: U.S. Coronavirus Testing Still Falls Short. How's Your State Doing?

One prominent research group, Harvard's Global Health Institute, proposes that the U.S. should be doing more than 900,000 tests per day as a country. This projection, released Thursday, is a big jump from its earlier projection of testing need, which had been between 500,000 and 600,000 daily.

Harvard's testing estimate increased, says Ashish Jha, director of the Global Health Institute, because the latest modeling shows that the outbreak in the United States is worse than projected earlier.

"Just in the last few weeks, all of the models have converged on many more people getting infected and many more people [dying]," he says.

The US might be able to test 400,000 to 600,000 people per day sometime in May according to Dr. Fauci - and that might be enough. But the US might need even more tests according to Dr. Jha.

There were 318,720 test results reported over the last 24 hours (the number of tests yesterday were revised up).

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 8.7% (red line). The US probably needs enough tests to push  the percentage positive below 5%. (probably much lower based on testing in New Zealand).

by Calculated Risk on 5/07/2020 12:48:00 PM

Important Notes:
1. Watch for Special Notes in the release. There are many questions this month (the BLS will do a great job explaining how they handled a number of issues).
2. The 2020 Decennial Census was expected to increase hiring in April. Most of this hiring has been delayed.
3. Ignore wage growth. Since many low paid employees have been let go, average wages will increase significantly. This is meaningless.

On Friday at 8:30 AM ET, the BLS will release the employment report for April. The consensus is for a decrease of 21,000,000 non-farm payroll jobs, and for the unemployment rate to increase to 16.0%.

Last month, the BLS reported 701,000 jobs lost in March and the unemployment rate at 4.4%.

The job losses in March were the eighth worst on record.   The worst was after WWII.  There will be a new #1 this month - and losses will be an order of magnitude worse than in Sept 1945.

Worst Monthly Job Losses Since 1939
Rank	Date	Jobs Lost (000s)
1	Sep-45	-1,959
2	Oct-49	-838
3	Mar-09	-800
4	Jan-09	-784
5	Feb-09	-743
6	Nov-08	-727
7	Dec-08	-706
8	Mar-20	-701
9	Apr-09	-695
10	Jul-56	-631

Goldman Sachs economists wrote this morning: "We left our April nonfarm payroll estimate unchanged at -24,000k (mom sa) ahead of tomorrow’s report."

And Merrill Lynch economists wrote: "We forecast 22 million in nonfarm payroll losses and a massive spike in the unemployment rate to 15% from 4.4% in March."

The usual indicators are somewhat useless this month.  They are signaling huge jobs losses, but we've never seen anything remotely close to the job losses that happened in April.

• Conclusion: The number of jobs lost in April will be huge.   And there will be many more jobs lost in May and June.  The Payroll Protection Program in the CARES act only pays for eight weeks - and then many of those employees will lose there jobs if the program isn't extended.  So those will be likely job losses in June or July.

by Calculated Risk on 5/07/2020 11:16:00 AM

From HotelNewsNow.com: STR: US hotel results for week ending 2 May

STR data for 26 April through 2 May 2020 showed slightly higher U.S. hotel occupancy compared with previous weeks, but the same significant level of year-over-year decline in the three key performance metrics.

In comparison with the week of 28 April through 4 May 2019, the industry recorded the following:

• Occupancy: -58.5% to 28.6%
• Average daily rate (ADR): -44.0% to US$74.72
• Revenue per available room (RevPAR): -76.8% to US$21.39

“Week-to-week comparisons showed a third consecutive increase in room demand, which provides further hope that early-April was the performance bottom,” said Jan Freitag, STR’s senior VP of lodging insights. “TSA checkpoint numbers, up for the second week in a row, aligned with this rise in hotel guest activity, which still remains incredibly low in the big picture. Overall, these last few weeks can be filed under the ‘less bad’ category.

“At the same time, this past week was the first to show solid evidence of leisure demand as weekend occupancy grew in states that have significantly eased mitigation efforts. As we have noted throughout the pandemic, the leisure segment will be the first to show a demand bounce back. In weeks prior, the more reasonable conclusion was that hotels were selling mostly to essential worker types.”
emphasis added

The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

Click on graph for larger image.

The red line is for 2020, dash light blue is 2019, blue is the median, and black is for 2009 (the worst year probably since the Great Depression for hotels).

2020 was off to a solid start, however, COVID-19 has crushed hotel occupancy.

Note: Y-axis doesn't start at zero to better show the seasonal change.

by Calculated Risk on 5/07/2020 10:01:00 AM

The Northwest Multiple Listing Service reported Western Washington housing market adjusting to new ways of operating

Residential real estate activity around Western Washington reflected expected declines during April with the impact of the coronavirus pandemic taking its toll. A new report from Northwest Multiple Listing Service shows year-over-year (YOY) drops system-wide in new listings, pending sales and closed sales, but prices increased nearly 6.4%.

“With the first full month of post-COVID-19 data in hand, it’s clear the Puget Sound housing market has been hit but not knocked out,” stated Windermere Chief Economist Matthew Gardener. “The normally active spring market is significantly slower than normal due to COVID-19, but it has not come to a halt,” he observed, adding, “In my opinion, it is responding to the current circumstances exactly as expected.”
…
The Northwest MLS report for April shows area-wide inventory fell nearly 21% from a year ago, dropping from 12,955 listings to 10,282.
emphasis added

There were 5,866 sales in April 2020, down from 7,578 sales in April 2019.

The press release is for the Northwest. In King County, sales were down 22.6% year-over-year, and active inventory was down 20.6% year-over-year.

In Seattle, sales were down 25.3% year-over-year, and inventory was down 30.8% year-over-year..  This puts the months-of-supply in Seattle at just 1.7 months.

The closed sales are for contracts mostly signed in February and March.   There will be a significant decline in sales in coming months.

by Calculated Risk on 5/07/2020 08:35:00 AM

The DOL reported:

In the week ending May 2, the advance figure for seasonally adjusted initial claims was 3,169,000, a decrease of 677,000 from the previous week's revised level. The previous week's level was revised up by 7,000 from 3,839,000 to 3,846,000. The 4-week moving average was 4,173,500, a decrease of 861,500 from the previous week's revised average. The previous week's average was revised up by 1,750 from 5,033,250 to 5,035,000.
emphasis added

The previous week was revised up.

The following graph shows the 4-week moving average of weekly claims since 1971.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased to 4,173,500.

This was lower than the consensus forecast.

The second graph shows seasonally adjust continued claims since 1967 (lags initial by one week while increasing sharply).

At the worst of the Great Recession, continued claims peaked at 6.635 million, but then steadily declined.

Continued claims have already increased to a new record high of 22.647 million (SA) and will increase further over the next few weeks - and likely stay at that high level until the crisis abates.

by Calculated Risk on 5/06/2020 08:42:00 PM

There are still a large number of layoffs every week.

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for 3.300 million initial claims, down from 3.839 million the previous week.

• At 3:00 PM, Consumer Credit from the Federal Reserve.

by Calculated Risk on 5/06/2020 05:13:00 PM

An excellent article by Derek Thompson, on test and trace in South Korea, in The Atlantic: What’s Behind South Korea’s COVID-19 Exceptionalism?

The US might be able to test 400,000 to 600,000 people per day sometime in May according to Dr. Fauci - and that would probably be sufficient for test and trace.

There were 215,433 test results reported over the last 24 hours (the number of tests yesterday were revised up).

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 10.3% (red line). The US probably needs enough tests to push  the percentage positive below 5%. (probably much lower based on testing in New Zealand).

by Calculated Risk on 5/06/2020 12:13:00 PM

This will be interesting to track. The most recent release is for February 2020. The data for March will be released mid-month.

The Department of Transportation (DOT) reported:

Travel on all roads and streets changed by 2.2% (4.9 billion vehicle miles) for February 2020 as compared with February 2019. Travel for the month is estimated to be 231.7 billion vehicle miles.

The seasonally adjusted vehicle miles traveled for February 2020 is 274.3 billion miles, a 2.3% (6.1 billion vehicle miles) increase over February 2019. It also represents -0.2% decline (-0.4 billion vehicle miles) compared with January 2020.

Cumulative Travel for 2020 changed by 2.1% (10.1 billion vehicle miles). The cumulative estimate for the year is 485.3 billion vehicle miles of travel.

The following graph shows the rolling 12 month total vehicle miles driven to remove the seasonal factors.

Click on graph for larger image.

Miles driven declined during the great recession, and the rolling 12 months stayed below the previous peak for a record 85 months.

Miles driven will decline sharply in March, and will really collapse in April. This will be an interesting measure to watch when the economy eventually starts to recover.

by Calculated Risk on 5/06/2020 11:07:00 AM

Note: Las Vegas saw a significant decline in visitor and convention traffic due to COVID-19 in the 2nd half of March. This report is for closed sales in April; sales are counted at the close of escrow, so the contracts for these homes were mostly signed in February and March. There will be further impacts from COVID-19 in future months.

The Las Vegas Realtors reported Southern Nevada housing market feeling effects of coronavirus crisis, LVR housing statistics for April 2020

The total number of existing local homes, condos and townhomes sold during April was 2,411. Compared to the same time last year, April sales were down 31.4% for homes and down 41.6% for condos and townhomes.
...
By the end of April, LVR reported 6,043 single-family homes listed for sale without any sort of offer. That’s down 18.7% from one year ago. For condos and townhomes, the 1,772 properties listed without offers in April represented a 3.0% drop from one year ago.
…
Despite the coronavirus crisis, the number of so-called distressed sales in April remained near historically low levels. The association reported that short sales and foreclosures combined accounted for 1.5% of all existing local property sales in April. That compares to 3.0% of all sales one year ago, 2.5% two years ago, and 8.4% three years ago.
emphasis added

1) Overall sales were down 33.5% year-over-year to 2,411 in April 2020 from 3,625 in April 2019.

2) Active inventory (single-family and condos) is down from a year ago, from a total of 9,261 in April 2019 to 7,815 in April 2020. Note: Total inventory was down 15.6% year-over-year.   And months of inventory is still low.

3) Low level of distressed sales.

by Calculated Risk on 5/06/2020 08:21:00 AM

From ADP:

ADP National Employment Report: Private Sector Employment Decreased by 20,236,000 Jobs in April; the April NER Utilizes Data Through April 12 and Does Not Reflect the Full Impact of COVID-19 on the Overall Employment Situation

Private sector employment decreased by 20,236,000 jobs from March to April according to the April ADP National Employment Report®. ... The report utilizes data through the 12th of the month. The NER uses the same time period the Bureau of Labor and Statistics uses for their survey. As such, the April NER does not reflect the full impact of COVID-19 on the overall employment situation
...
“Job losses of this scale are unprecedented. The total number of job losses for the month of April alone was more than double the total jobs lost during the Great Recession,” said Ahu Yildirmaz, co-head of the ADP Research Institute. “Additionally, it is important to note that the report is based on the total number of payroll records for employees who were active on a company’s payroll through the 12th of the month. This is the same time period the Bureau of Labor and Statistics uses for their survey.”

This was close to the consensus forecast for 20,000,000 private sector jobs lost in the ADP report.

The BLS report will be released Friday, and the consensus is for 21,000,000 non-farm payroll jobs lost in April.