RSS Feed by Calculated Risk on 5/23/2020 05:54:00 PM
Saturday, May 23, 2020
May 23 COVID-19 Test Results
Note: I live in Orange County, CA, and the COVID-19 news has been disappointing. The number of daily deaths has increased recently (12 today), and the number of hospitalizations has been rising steadily. Also the percentage of tests that were positive today was 21% (216 out of 1,033). This is a very high positive rate and indicates testing in the OC is not adequate. The overall number of cases and deaths in the OC is not exceedingly high compared to some areas, but the trend is not favorable.
In late April, Dr. Fauci said the US might be able to test 400,000 to 600,000 people per day sometime in May, and testing is now close to that range. This might be enough to allow test-and-trace in some areas. However, the US might need more than 900,000 tests per day according to Dr. Jha of Harvard's Global Health Institute.
There were 344,384 test results reported over the last 24 hours.
Click on graph for larger image.
This data is from the COVID Tracking Project.
The percent positive over the last 24 hours was 6.2% (red line). The US probably needs enough tests to keep the percentage positive well below 5%. (probably much lower based on testing in New Zealand).
NOTE: There was something wrong with the Texas numbers today, so this doesn't include Texas tests today.
Schedule for Week of May 24, 2020
by Calculated Risk on 5/23/2020 08:11:00 AM
The key reports this week are the second estimate of Q1 GDP, April New Home Sales, March Case-Shiller house prices, and Personal Income and Outlays for April.
For manufacturing, the May Dallas, Richmond and Kansas City Fed manufacturing surveys will be released.
On Friday, Fed Chair Jerome Powell will participate in a discussion.
All US markets will be closed in observance of Memorial Day.
8:30 AM ET: Chicago Fed National Activity Index for April. This is a composite index of other data.
9:00 AM: S&P/Case-Shiller House Price Index for March.This graph shows the year-over-year change in the seasonally adjusted National Index, Composite 10 and Composite 20 indexes through the most recent report (the Composite 20 was started in January 2000).
The consensus is for a 3.3% year-over-year increase in the Comp 20 index for March.
9:00 AM: FHFA House Price Index for March 2020. This was originally a GSE only repeat sales, however there is also an expanded index.
10:00 AM: New Home Sales for April from the Census Bureau. This graph shows New Home Sales since 1963. The dashed line is the sales rate for last month.
The consensus is for 490 thousand SAAR, down from 627 thousand in March.
10:30 AM: Dallas Fed Survey of Manufacturing Activity for May.
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.
10:00 AM: Richmond Fed Survey of Manufacturing Activity for May.
2:00 PM: the Federal Reserve Beige Book, an informal review by the Federal Reserve Banks of current economic conditions in their Districts.
8:30 AM ET: The initial weekly unemployment claims report will be released. The consensus is for a 2.100 million initial claims, down from 2.438 million the previous week.
8:30 AM: Gross Domestic Product, 1st quarter 2020 (Second estimate). The consensus is that real GDP decreased 4.8% annualized in Q1, unchanged from the advance estimate of -4.8%.
8:30 AM: Durable Goods Orders for April from the Census Bureau. The consensus is for a 18.5% decrease in durable goods orders.
10:00 AM: Pending Home Sales Index for April. The consensus is for a 15% decrease in the index.
11:00 AM: the Kansas City Fed manufacturing survey for May. This is the last of regional manufacturing surveys for May.
8:30 AM ET: Personal Income and Outlays, April 2020. The consensus is for a 6.5% decrease in personal income, and for a 12.5% decrease in personal spending. And for the Core PCE price index to decrease 0.3%.
9:45 AM: Chicago Purchasing Managers Index for May.
10:00 AM: University of Michigan's Consumer sentiment index (Final for May). The consensus is for a reading of 73.7.
11:00 AM: Discussion, Fed Chair Jerome Powell, At Griswold Center for Economic Policy Studies Princeton Reunions Talk: A Conversation with Jerome Powell, moderated by Alan Blinder (via webcast)
Friday, May 22, 2020
May 22 COVID-19 Test Results
by Calculated Risk on 5/22/2020 05:42:00 PM
In addition to having enough tests for test-and-trace, we also need people to conduct contact tracing. There is a great new website that tracks the progress of each towards test-and-trace. The website also has resources on how to implement test-and-trace. This includes software, training resources, a calculator for how many people to hire and more. Every state should review this site!
Check it out.
In late April, Dr. Fauci said the US might be able to test 400,000 to 600,000 people per day sometime in May, and testing is now close to that range. This might be enough to allow test-and-trace in some areas. However, the US might need more than 900,000 tests per day according to Dr. Jha of Harvard's Global Health Institute.
There were 343,802 test results reported over the last 24 hours.
Click on graph for larger image.
This data is from the COVID Tracking Project.
The percent positive over the last 24 hours was 7.0% (red line). The US probably needs enough tests to keep the percentage positive well below 5%. (probably much lower based on testing in New Zealand).
NOTE: A few states - reportedly Virginia, Texas, Georgia, and Vermont - have apparently been including antibody tests with virus tests. The COVID tracking project is working to straighten that out. I think the COVID tracking project was able to back out some these antibody tests!
Seasonal Adjustment Weirdness: Will State and Local Governments Hire 700,000 Teachers in June and July?
by Calculated Risk on 5/22/2020 01:50:00 PM
Every year, state and local governments let about 2 million teachers go in late Spring, and then hire them back at the end of Summer.
Since this happens every year, the BLS adjusts for this seasonal pattern in the monthly employment report.
However, in 2020, state and local governments let almost 700 thousand teachers go in March and April (mostly in April).
What this means is that instead of letting 2 million teachers go in late Spring, state and local governments will only let go about 1.3 million teachers (since 700 thousand were already let go).
This creates a weird seasonal adjustment problem. By the end of July, the normal number of teachers (around 2 million) will probably have been let go.
Since the BLS has already reported almost 700 thousand teaching jobs lost seasonally adjusted, the seasonally adjusted number from the BLS will have to show something like an increase of 700 thousand teacher jobs in June and July!
State and local governments will not hire 700 thousand teachers in June and July, but the BLS seasonally adjusted report will show those hires to make the numbers balance out. Just something to remember in a few months.
Q2 GDP Forecasts: Probably Around 40% Annual Rate Decline
by Calculated Risk on 5/22/2020 11:37:00 AM
Important: GDP is reported at a seasonally adjusted annual rate (SAAR). So a 40% Q2 decline is around 9% decline from Q1 (SA).
From Merrill Lynch:
We are tracking 2Q GDP at -40% qoq saar, down from -30% earlier. [SAAR May 22 estimate]From Goldman Sachs:
emphasis added
We left our Q2 GDP forecast unchanged at -39% (qoq ar) but raised our estimate of the initial vintage by 0.3pp to -31.5% (released on July 30th). [May 22 estimate]From the NY Fed Nowcasting Report
The New York Fed Staff Nowcast stands at -30.5% for 2020:Q2. [May 22 estimate]And from the Altanta Fed: GDPNow
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2020 is -41.9 percent May 19, up from -42.8 percent on May 15. [May 19 estimate]
NMHC: Rent Payment Tracker Finds 90.8 Percent Paid Rent as of May 20th
by Calculated Risk on 5/22/2020 10:24:00 AM
From the NMHC: NMHC Rent Payment Tracker Finds 90.8 Percent of Apartment Households Paid Rent as of May 20
he National Multifamily Housing Council (NMHC)’s Rent Payment Tracker found 90.8 percent of apartment households made a full or partial rent payment by May 20 in its survey of 11.4 million units of professionally managed apartment units across the country.CR Note: It appears most people are still paying their rent. This was a higher percentage than in April (at the same point in the month), and only down 2.2 percentage points from a year ago.
This is a 2.2-percentage point decrease in the share who paid rent through May 20, 2019 and compares to 89.2 percent that had paid by April 20, 2020. These data encompass a wide variety of market-rate rental properties across the United States, which can vary by size, type and average rental price.
"Each week we see new evidence that Americans are prioritizing rent and that the work apartment firms did to create flexible payment plans is paying dividends,” said Doug Bibby, NMHC President. “However, the hardships caused by the outbreak are not ending anytime soon. Accordingly, it is critical that lawmakers come together to support America’s 43 million renter households with a national rental assistance fund as was included in the House-passed HEROES Act, and to protect our housing providers with expanded mortgage forbearance.”
emphasis added
BLS: April jobless rates up in all 50 states; 43 States at New Record Highs
by Calculated Risk on 5/22/2020 10:12:00 AM
From the BLS: Regional and State Employment and Unemployment Summary
Unemployment rates were higher in April in all 50 states and the District of Columbia, the U.S. Bureau of Labor Statistics reported today. Similarly, all 50 states and the District had jobless rate increases from a year earlier. The national unemployment rate rose by 10.3 percentage points over the month to 14.7 percent and was 11.1 points higher than in April 2019.
...
Nevada had the highest unemployment rate in April, 28.2 percent, followed by Michigan, 22.7 percent, and Hawaii, 22.3 percent. The rates in 43 states set new series highs. (All state series begin in 1976.) The rates in Hawaii and Nevada exceeded their previous series highs by more than 10.0 percentage points each, while the rates in Michigan, New Hampshire, Rhode Island, and Vermont exceeded their previous highs by more than 5.0 points each. Connecticut had the lowest unemployment rate, 7.9 percent. The next lowest rates were in Minnesota and Nebraska, 8.1 percent and 8.3 percent, respectively.
emphasis added
Click on graph for larger image.This graph shows the number of states (and D.C.) with unemployment rates at or above certain levels since January 1976.
Currently 43 states are above 10% unemployment rate.
Seventeen states are above 15%.
Three states are above 20% (Hawaii, Michigan, and Nevada).
One state (Nevada) is above 25% unemployment.
Black Knight: 4.75 Million Homeowners Now in COVID-19-Related Forbearance Plans; Nearly Half Made April Mortgage Payments
by Calculated Risk on 5/22/2020 07:30:00 AM
Note: Both Black Knight and the MBA (Mortgage Bankers Association) are putting out weekly estimates of mortgages in forbearance.
From Black Knight: Black Knight: 4.75 Million Homeowners Now in COVID-19-Related Forbearance Plans; Nearly Half Made April Mortgage Payments
“Of the 4.25 million homeowners who were in active forbearance as of the end of April, nearly half – 46% – still made their April mortgage payment,” said Jabbour. “The fact that only 54% of borrowers in forbearance actually missed their payments helps explain the disparity between April’s delinquency and forbearance rates. However, just 21% of borrowers in forbearance have made their May payments, which could lead to another sharp increase in the national delinquency rate for May if those payments are not received before the end of the month.”CR Note: The delinquency rate in April increased sharply to 6.45%, but it would have been much higher if so many borrowers in forbearance hadn't made their mortgage payments (loans in forbearance are counted as delinquent in the survey).
The McDash Flash Forbearance tracker shows that the 4.75 million loans in forbearance represent 9% of all active mortgages and account for a little over $1 trillion in unpaid principal. An estimated 7.1% of all GSE-backed loans and 12.6% of FHA/VA mortgages are now in forbearance. Over the past week, active forbearance volumes have increased by just 93,000, a more than 70% decline from the 325,000 in the first week of May.
Thursday, May 21, 2020
May 21 COVID-19 Test Results
by Calculated Risk on 5/21/2020 05:05:00 PM
In addition to having enough tests for test-and-trace, we also need people to conduct contact tracing.
There is a great new website that tracks the progress of each towards test-and-trace. The website also has resources on how to implement test-and-trace. This includes software, training resources, a calculator for how many people to hire and more. Every state should review this site!
Check it out.
In late April, Dr. Fauci said the US might be able to test 400,000 to 600,000 people per day sometime in May, and testing is now close to that range. This might be enough to allow test-and-trace in some areas. However, the US might need more than 900,000 tests per day according to Dr. Jha of Harvard's Global Health Institute.
There were 408,415 test results reported over the last 24 hours.
This data is from the COVID Tracking Project.
The percent positive over the last 24 hours was 6.2% (red line). The US probably needs enough tests to keep the percentage positive well below 5%. (probably much lower based on testing in New Zealand).
NOTE: A few states - reportedly Virginia, Texas, Georgia, and Vermont - have apparently been including antibody tests with virus tests. The COVID tracking project is working to straighten that out.
Comments on April Existing Home Sales
by Calculated Risk on 5/21/2020 01:46:00 PM
Earlier: NAR: Existing-Home Sales Decreased to 4.33 million in April
A few key points:
1) Existing home sales are counted at the close of escrow, so this report is mostly for contracts signed in February and March. Some analysts think the April report will be the bottom for existing home sales - since purchase applications have increased recently - but my guess is that few contracts were signed in April, so reported sales in May (and maybe even June) will probably be lower.
2) Inventory is very low, and was down 19.7% year-over-year (YoY) in April. Inventory will probably stay fairly low as people wait to list their homes - and do not want strangers in their house. This is the lowest level of inventory for April since at least the early 1990s.
Click on graph for larger image.
This graph shows existing home sales by month for 2019 and 2020.
Note that existing home sales picked up somewhat in the second half of 2019 as interest rates declined.
Even with weak sales in April, sales to date are only down about 0.8% compared to the same period in 2019.
The second graph shows existing home sales Not Seasonally Adjusted (NSA) by month (Red dashes are 2020), and the minimum and maximum for 2005 through 2019.
Sales NSA in April (373,000) were well below sales last year in April (456,000).
Sales NSA were just above the minimum for April in 2009 (349,000).
It seems likely reported sales in May will be below the post bubble low of 376,000 in May 2009.
