by Calculated Risk on 6/16/2020 06:03:00 PM

I wish we had more data. For example, it would be nice to know the reason for the tests - for example, was the testing because of symptoms?  Or close contact with an infected person?  Or a regular test for a healthcare worker?  Or precautionary for elective surgery? Etc.  It would be great to know the number of people tested as opposed to the number of tests.  But we are lucky to have this data (thanks to the hard work of the volunteers at the COVID Tracking Project

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 at least until the percent positive is continuously under 3% and the daily positive is significantly lower than today.

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 464,715 test results reported over the last 24 hours. There were 23,498 positive tests.

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 5.1% (red line).

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

by Calculated Risk on 6/16/2020 01:19:00 PM

Cardiff Garcia interviewed me yesterday at NPR The Indicator from Planet Money: High-Frequency Indicators. (with Cardiff and Stacey)  Thanks to Cardiff for having me on!

Here are the high frequency indicators we discussed (with graphs)

by Calculated Risk on 6/16/2020 11:34:00 AM

From the NMHC: NMHC Rent Payment Tracker Finds 89 Percent of Apartment Households Paid Rent as of June 13

The National Multifamily Housing Council (NMHC)’s Rent Payment Tracker found 89.0 percent of apartment households made a full or partial rent payment by June 13 in its survey of 11.4 million units of professionally managed apartment units across the country.

This is a 0.1-percentage point increase from the share who paid rent through June 13, 2019 and compares to 87.7 percent that had paid by May 13, 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.

“Once again, it appears that residents of professionally managed apartments were able to largely pay their rent,” said Doug Bibby, NMHC President. “However, there is a growing realization that renters outside of this universe are experiencing profound hardships as the nation continues to grapple with historic unemployment and economic dislocation.

“In the midst of a pandemic and a recession, it is critical that those on the front lines are safely and securely housed. Accordingly, we urge lawmakers to take swift action to create a Rental Assistance Fund and extend unemployment benefits so we can avoid future eviction-related problems and don’t undermine the initial recovery.”
emphasis added

CR Note: It appears most people are still paying their rent.   This was a higher percentage than in May (at the same point in the month), and actually up 0.1 percentage points from the same date a year ago.

Several disaster relief programs have clearly helped renters pay their bills, such as the extra $600 per week in unemployment insurance, the PPP, and the Pandemic Unemployment Assistance (PUA). The PPP has been modified, but will need to be extended. And the $600 per week in extra benefits ends at the end of July (and will need to be extended, perhaps at a lower rate).

The PUA program with 9.7 million participants (mostly self-employed),  expires at the end of 2020, but these individuals have also being receiving the extra $600 per week that expires in July.

by Calculated Risk on 6/16/2020 10:07:00 AM

The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 58, up from 37 in May. Any number above 50 indicates that more builders view sales conditions as good than poor.

From NAHB: Builder Confidence Surges in June

In a sign that housing stands poised to lead a post-pandemic economic recovery, builder confidence in the market for newly-built single-family homes jumped 21 points to 58 in June, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). Any reading above 50 indicates a positive market.
...
All the HMI indices posted gains in June. The HMI index gauging current sales conditions jumped 21 points to 63, the component measuring sales expectations in the next six months surged 22 points to 68 and the measure charting traffic of prospective buyers vaulted 22 points to 43.

Looking at the monthly average regional HMI scores, the Northeast surged 31 point to 48, the South jumped 20 points to 62, the Midwest posted a 19-point gain to 51 and the West catapulted 22 points to 66.
emphasis added

Click on graph for larger image.

This graph show the NAHB index since Jan 1985.

This was above the consensus forecast.

by Calculated Risk on 6/16/2020 09:23:00 AM

From the Fed: Industrial Production and Capacity Utilization

Total industrial production increased 1.4 percent in May, as many factories resumed at least partial operations following suspensions related to COVID-19. Even so, total industrial production in May was 15.4 percent below its pre-pandemic level in February. Manufacturing output—which fell sharply in March and April—rose 3.8 percent in May; most major industries posted increases, with the largest gain registered by motor vehicles and parts. The indexes for mining and utilities declined 6.8 percent and 2.3 percent, respectively. At 92.6 percent of its 2012 average, the level of total industrial production was 15.3 percent lower in May than it was a year earlier. Capacity utilization for the industrial sector increased 0.8 percentage point to 64.8 percent in May, a rate that is 15.0 percentage points below its long-run (1972–2019) average and 1.9 percentage points below its trough during the Great Recession.
emphasis added

Click on graph for larger image.

This graph shows Capacity Utilization. This series is up slightly from the record low set last month, and still below the trough of the Great Recession (the series starts in 1967).

Capacity utilization at 64.8% is 15.0% below the average from 1972 to 2017.

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

The second graph shows industrial production since 1967.

Industrial production increased in May to  92.6. This is 6.3% above the Great Recession low.

The change in industrial production was below consensus expectations.

by Calculated Risk on 6/16/2020 08:37:00 AM

On a monthly basis, retail sales increased 17.7 percent from April to May (seasonally adjusted), and sales were down 6.1 percent from May 2019.

From the Census Bureau report:

Advance estimates of U.S. retail and food services sales for May 2020, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $485.5 billion, an increase of 17.7 percent from the previous month, but 6.1 percent below May 2019. Total sales for the March 2020 through May 2020 period were down 10.5 percent from the same period a year ago. The March 2020 to April 2020 percent change was revised from down 16.4 percent to down 14.7 percent.
emphasis added

Click on graph for larger image.

This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).

Retail sales ex-gasoline were up 18.0% in April.

The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993.

Retail and Food service sales, ex-gasoline, decreased by 3.9% on a YoY basis.

The increase in May was well above expectations, and sales in March and April were revised up.

by Calculated Risk on 6/15/2020 08:18:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Slightly Higher, But Still Near All-Time Lows

Mortgage rates were slightly higher today for the average lender. Additionally, some lenders bumped rates a bit in the middle of the day in response to weakness in the bond market. … the average lender doesn't have a ton of incentive to drop rates very quickly given that top tier scenarios are increasingly seeing rates under 3%. [30YR FIXED - 2.96%]
emphasis added

Tuesday:
• At 8:30 AM ET, Retail sales for May is scheduled to be released.  The consensus is for 8.0% increase in retail sales.

• At 9:15 AM, The Fed will release Industrial Production and Capacity Utilization for May. The consensus is for a 3.0% increase in Industrial Production, and for Capacity Utilization to increase to 66.9%.

• At 10:00 AM, The June NAHB homebuilder survey. The consensus is for a reading of 45, up from 37. Any number below 50 indicates that more builders view sales conditions as poor than good.

• At 10:00 AM, Testimony, Fed Chair Jerome Powell, Monetary Policy Report submitted to the Congress on June 12, 2020, pursuant to section 2B of the Federal Reserve Act, Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate

by Calculated Risk on 6/15/2020 05:34:00 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 at least until the percent positive is continuously under 3% and the daily positive is significantly lower than today.

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 449,488 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 4.1% (red line).

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

by Calculated Risk on 6/15/2020 04:03:00 PM

Note: To put these numbers in perspective, the MBA notes "For the week of March 2, only 0.25% of all loans were in forbearance."

From the MBA: Share of Mortgage Loans in Forbearance Increases Slightly to 8.55%

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance increased from 8.53% of servicers’ portfolio volume in the prior week to 8.55% as of June 7, 2020. According to MBA’s estimate, almost 4.3 million homeowners are now in forbearance plans.
...
“MBA’s survey results from the first week of June showed a slight uptick in the overall share of loans in forbearance, but this increase was primarily driven by a larger share of portfolio and PLS loans in forbearance. Half of the servicers in our sample saw the forbearance share decline for at least one investor category,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Although there continues to be layoffs, the job market does appear to be improving, and this is likely leading to many borrowers in forbearance deciding to opt out of their plan.”

Added Fratantoni, “With June mortgage payments due, servicers did report the first increase in forbearance requests in two months. The level of forbearance requests is still quite low, but there was a noticeable increase in call volume over the course of the week.”
emphasis added

Click on graph for larger image.

This graph shows the percent of portfolio in forbearance by investor type over time.  Most of the increase was in late March and early April.

The MBA notes: "Forbearance requests as a percent of servicing portfolio volume (#) increased across all investor types for the first time since the week of March 30-April 5: from 0.17% to 0.19%."

by Calculated Risk on 6/15/2020 10:59:00 AM

Note: The expansion to the Panama Canal was completed in 2016 (As I noted a few years ago), and some of the traffic that used the ports of Los Angeles and Long Beach is probably going through the canal. This might be impacting TEUs on the West Coast.

Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic.

The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).

To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average.

Click on graph for larger image.

On a rolling 12 month basis, inbound traffic was down 1.2% in May compared to the rolling 12 months ending in April.   Outbound traffic was down 1.5% compared to the rolling 12 months ending the previous month.

The 2nd graph is the monthly data (with a strong seasonal pattern for imports).

Usually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in February or March depending on the timing of the Chinese New Year (January 25th in 2020).

Because of the timing of the New Year, we would have expected traffic to decline in February without an impact from COVID-19, but bounce back in March and April.

Imports were down 14% YoY in May, and exports were down 17% YoY.

In general imports both imports and exports have turned down recently.  There might be some bounce back soon.