by Calculated Risk on 6/08/2020 08:11:00 AM

These indicators are mostly for travel and entertainment - some of the sectors that will probably recover very slowly.

The TSA is providing daily travel numbers.

Click on graph for larger image.

This data shows the daily total traveler throughput from the TSA for 2019 (Blue) and 2020 (Red).

On June 7th there were 441,255 travelers compared to 2,669,860 a year ago.

That is a decline of 83.5%. There has been an increase off the bottom, but air travel is still down significantly.

The second graph shows the year-over-year change in diners as tabulated by OpenTable for the US and several selected cities.

Thanks to OpenTable for providing this restaurant data:

This data is updated through June 6, 2020.

The US was off 100% YoY as of March 21st.

New York is still off 98%.

Texas is only down 46% YoY.

This data shows domestic box office for each week (red) and the maximum and minimum for the previous four years.  Data is from BoxOfficeMojo through June 4th.

Note that the data is noisy and depends on when blockbusters are released.

Movie ticket sales have picked up slightly, but have been essentially at zero for eleven weeks.

Most  movie theaters are closed all across the country, and will probably reopen slowly (probably with limited seating at first).

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

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.

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

STR reported hotel occupancy was off 43.2% year-over-year last week.  Occupancy has increased somewhat over the last few of weeks, but is still very low.

This graph, based on weekly data from the U.S. Energy Information Administration (EIA), shows the year-over-year change in gasoline consumption.

At one point, gasoline consumption was off almost 50% YoY.

As of May 29th, gasoline consumption was off about 20% YoY (about 80% of normal).

The final graph is from Apple mobility.

This data is through June 6th for the United States and several selected cities.

IMPORTANT: All data is relative to January 13, 2020. This data is NOT Seasonally Adjusted. People walk and drive more when the weather is nice, so I'm just using the transit data.

According to the Apple data public transit in the US is still only about 41% of the January level. It is at 26% in New York, and 64% in Houston.

by Calculated Risk on 6/07/2020 06:53:00 PM

Weekend:
• Schedule for Week of June 7, 2020

Monday:
• No major economic releases scheduled.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 10 and DOW futures are up 120 (fair value).

Oil prices were up over the last week with WTI futures at $39.72 per barrel and Brent at $42.69 barrel.  A year ago, WTI was at $53, and Brent was at $67 - so WTI oil prices are down about 25% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.03 per gallon. A year ago prices were at $2.75 per gallon, so gasoline prices are down $0.72 per gallon year-over-year.

by Calculated Risk on 6/07/2020 06:30:00 PM

Note: I started posting this graph when the US was doing a few thousand tests per day. Clearly the US was way under testing early in the pandemic. I'll continue posting this graph daily until the percent positive is continuously under 3% (still have a ways to go).

The US is now conducting over 400,000 tests per day, and that might be enough to allow test-and-trace in some areas. Based on the experience of other countries, the percent positive needs to be well under 5% to really push down new infections, so the US still needs to increase the number of tests per day significantly.

According to Dr. Jha of Harvard's Global Health Institute, the US might need more than 900,000 tests per day .

There were 456,805 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 4.4% (red line).

For the status of contact tracing by state, check out testandtrace.com.

by Calculated Risk on 6/07/2020 10:49:00 AM

The FOMC will meet this week on Tuesday and Wednesday, and expectations are for no change in policy. Fed Chair Powell will hold a press briefing on Wednesday and will likely reiterate that the Fed will do whatever it takes, and suggest that more fiscal disaster relief is needed.

The FOMC is expected to release updated projections at the meeting this week (this is not certain).  The FOMC didn't release projections in March due to economic uncertainty related to the impact of COVID-19.

For review, here are the last FOMC projections released in December.   Since the last projections were released, the economic world has changed dramatically - coming to a sudden stop in March - and the projections for 2020 and 2021 will change significantly.

GDP decreased at a 5.0% annual rate in Q1, and most forecasts are for an annual rate decline of 30% to 40% in Q2 - and for GDP to decline in 2020.

The course of the economy will depend on the course of the pandemic, so the FOMC has to factor in their expectations of when the pandemic will subside and end (and no one knows at this time).

GDP projections of Federal Reserve Governors and Reserve Bank presidents, Change in Real GDP1
Projection Date	2020	2021	2022
Dec 2019	2.0 to 2.2	1.8 to 2.0	1.8 to 2.0
June 2020	NA	NA	NA

¹ Projections of change in real GDP and inflation are from the fourth quarter of the previous year to the fourth quarter of the year indicated.

The unemployment rate was at 13.3% in May.   The FOMC will revise up their Q4 2020 unemployment forecast significantly.   The FOMC projections for the unemployment rate at the end of 2020, 2021 and 2022 will be interesting.

Note that the unemployment rate doesn't remotely capture the economic damage to the labor market.  Not only were there 15+ million more people unemployed in May than at the end of 2019, but another 6+ million have left the labor force.   And close to 50% of households have seen a decline in income.

Unemployment projections of Federal Reserve Governors and Reserve Bank presidents, Unemployment Rate2
Projection Date	2020	2021	2022
Dec 2019	3.5 to 3.7	3.5 to 3.9	3.5 to 4.0
June 2020	NA	NA	NA

² Projections for the unemployment rate are for the average civilian unemployment rate in the fourth quarter of the year indicated.

As of April 2020, PCE inflation was up 0.5% from April 2019.   With the economic stop in March, PCE inflation will be revised down significantly for Q4 2020.

Inflation projections of Federal Reserve Governors and Reserve Bank presidents, PCE Inflation1
Projection Date	2020	2021	2022
Dec 2019	1.8 to 1.9	2.0 to 2.1	2.0 to 2.2
June 2020	NA	NA	NA

PCE core inflation was up 1.0% in April year-over-year.    Core inflation will also be revised down for Q4 2020.

Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents, Core Inflation1
Projection Date	2020	2021	2022
Dec 2019	1.9 to 2.0	2.0 to 2.1	2.0 to 2.2
June 2020	NA	NA	NA

by Calculated Risk on 6/06/2020 05:43:00 PM

The US is now conducting over 400,000 tests per day, and that might be enough to allow test-and-trace in some areas. Based on the experience of other countries, the percent positive needs to be well under 5% to really push down new infections, so the US still needs to increase the number of tests per day significantly.

According to Dr. Jha of Harvard's Global Health Institute, the US might need more than 900,000 tests per day .

There were 547,429 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 4.3% (red line).

For the status of contact tracing by state, check out testandtrace.com.

by Calculated Risk on 6/06/2020 11:09:00 AM

Note: I usually post this monthly, but I hesitated recently due to the COVID-19 pandemic. But I'll post it by request - the numbers are ugly.

Here is another update of tracking employment during Presidential terms.  We frequently use Presidential terms as time markers - we could use Speaker of the House, Fed Chair, or any other marker.

NOTE: Several readers have asked if I could add a lag to these graphs (obviously a new President has zero impact on employment for the month they are elected). But that would open a debate on the proper length of the lag, so I'll just stick to the beginning of each term.

Important: There are many differences between these periods. Overall employment was smaller in the '80s, however the participation rate was increasing in the '80s (younger population and women joining the labor force), and the participation rate is generally declining now.  But these graphs give an overview of employment changes.

The first graph shows the change in private sector payroll jobs from when each president took office until the end of their term(s). Presidents Carter and George H.W. Bush only served one term.

Mr. G.W. Bush (red) took office following the bursting of the stock market bubble, and left during the bursting of the housing bubble. Mr. Obama (dark blue) took office during the financial crisis and great recession. There was also a significant recession in the early '80s right after Mr. Reagan (dark red) took office.

There was a recession towards the end of President G.H.W. Bush (light purple) term, and Mr. Clinton (light blue) served for eight years without a recession.

Click on graph for larger image.

The first graph is for private employment only.

Mr. Trump is in Orange (40 months).

The employment recovery during Mr. G.W. Bush's (red) first term was sluggish, and private employment was down 824,000 jobs at the end of his first term.   At the end of Mr. Bush's second term, private employment was collapsing, and there were net 387,000 private sector jobs lost during Mr. Bush's two terms. 

Private sector employment increased by 20,970,000 under President Clinton (light blue), by 14,714,000 under President Reagan (dark red), 9,039,000 under President Carter (dashed green), 1,511,000 under President G.H.W. Bush (light purple), and 11,849,000 under President Obama (dark blue).

During the first 40 months of Mr. Trump's term, the economy has lost 11,593,000 private sector jobs.

 A big difference between the presidencies has been public sector employment.  Note: the bumps in public sector employment due to the decennial Census in 1980, 1990, 2000, and 2010. 

The public sector grew during Mr. Carter's term (up 1,304,000), during Mr. Reagan's terms (up 1,414,000), during Mr. G.H.W. Bush's term (up 1,127,000), during Mr. Clinton's terms (up 1,934,000), and during Mr. G.W. Bush's terms (up 1,744,000 jobs).  However the public sector declined significantly while Mr. Obama was in office (down 277,000 jobs).

During the 40 months of Mr. Trump's term, the economy has lost 1,102,000 public sector jobs.

SPECIAL NOTE: Most of the public sector jobs lost in April and May were for education.   Of the 1.5 million government jobs lost in April and May, close to 1 million were in education.  Many teachers are typically let go in late Spring - and rehired in the Fall.  This year many teaching jobs were lost early, and this will distort the numbers over the next two months.

The third graph shows the progress towards the Trump goal of adding 10 million jobs over his 4 year term.

After 40 months of Mr. Trump's presidency, the economy has lost 12,715,000 jobs, about 21,048,000 behind the projection.

by Calculated Risk on 6/06/2020 08:11:00 AM

The key report this week is CPI.

The FOMC meets on Tuesday and Wednesday, and are expected to release updated economic projections on Wednesday.

----- Monday, June 8th -----
No major economic releases scheduled.

----- Tuesday, June 9th -----
6:00 AM ET: NFIB Small Business Optimism Index for May.

10:00 AM ET: Job Openings and Labor Turnover Survey for April from the BLS.

This graph shows job openings (yellow line), hires (purple), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

Jobs openings decreased in March to 6.191 million from 7.004 million in February.

The number of job openings (yellow) were down 16% year-over-year, and Quits were down 21% year-over-year.

2:15 PM,  (11:15 AM PT) June 2020 Market & Economic Update. Free Registration Link for June 2020 Market & Economic Update.

----- Wednesday, June 10th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: The Consumer Price Index for May from the BLS. The consensus is for 0.1% decrease in CPI, and a 0.1% decrease in core CPI.

2:00 PM: FOMC Meeting Announcement. No change to policy is expected at this meeting.

2:00 PM: FOMC Forecasts This will include the Federal Open Market Committee (FOMC) participants' projections of the appropriate target federal funds rate along with the quarterly economic projections.

2:30 PM: Fed Chair Jerome Powell holds a press briefing following the FOMC announcement.

----- Thursday, June 11th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for a 1.200 million initial claims, down from 1.877 million the previous week.

8:30 AM: The Producer Price Index for May from the BLS. The consensus is for a 0.1% increase in PPI, and a 0.1% decrease in core PPI.

12:00 PM: Q1 Flow of Funds Accounts of the United States from the Federal Reserve.

----- Friday, June 12th -----
10:00 AM: University of Michigan's Consumer sentiment index (Preliminary for June).

by Calculated Risk on 6/05/2020 07:01:00 PM

The US is now conducting over 400,000 tests per day, and that might be enough to allow test-and-trace in some areas. Based on the experience of other countries, the percent positive needs to be well under 5% to really push down new infections, so the US still needs to increase the number of tests per day significantly.

According to Dr. Jha of Harvard's Global Health Institute, the US might need more than 900,000 tests per day .

There were 550,915 test results reported over the last 24 hours.

This was the highest number of positive tests (28,615) in over a month.

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 5.2% (red line).

For the status of contact tracing by state, check out testandtrace.com.

by Calculated Risk on 6/05/2020 03:39:00 PM

There will be some weird seasonal adjustments this year!

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 1.2 million teachers go in March, April and May, Not Seasonally Adjusted (NSA). On a seasonally adjusted basis, this was just over 1 million teaching jobs lost (State governments usually start letting teachers go in May, so some of the NSA job losses were expected).

What this means is that instead of letting close to 2 million teachers go in late Spring (NSA), state and local governments will only let go less than 1 million teachers.

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 over 1 million teaching jobs lost seasonally adjusted (SA), the seasonally adjusted number from the BLS will have to show something like an increase of 1 million teacher jobs in June and July!

State and local governments will not hire 1 million 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 over the next two months.

by Calculated Risk on 6/05/2020 01:27:00 PM

From the Association of American Railroads (AAR) Rail Time Indicators. Graphs and excerpts reprinted with permission.

Huge swaths of the U.S. and global economies remained shut in May and the impact on rail traffic was predictable. Total U.S. carloads fell 27.7% in May 2020 from May 2019, the biggest year-over- year decline for any month on record (our year-over-year comparisons begin in 1989) and worse than the 25.2% decline in April. For intermodal, things were bad but not as bad: originations were down 13.0% in May, better than the 17.2% decline in April.
emphasis added

Click on graph for larger image.

This graph from the Rail Time Indicators report shows the six week average of U.S. Carloads in 2018, 2019 and 2020:

Average weekly total carloads in May 2020 of 185,043 were also the lowest on record. Of the 20 commodity categories we track, just one (farm products excluding grain) had carload gains over last May.

In 2020 through May, total U.S. carloads were down 14.7%, or 815,413 carloads, from last year.

The second graph shows the six week average of U.S. intermodal in 2018, 2019 and 2020: (using intermodal or shipping containers):

U.S. intermodal originations were down 13.0% in May 2020, an improvement from the 17.2% decline in April 2020 but still the 16th straight year-over-year monthly decline for intermodal. Prior to the pandemic, the average monthly decline was around 6%, which is clearly much less than the declines of the past two months. Intermodal is suffering from, among other things, weak consumer demand and fewer cargo ships calling on U.S. ports.

Note that rail traffic was weak prior to the pandemic.