by Calculated Risk on 6/25/2020 08:37:00 AM

The DOL reported:

In the week ending June 20, the advance figure for seasonally adjusted initial claims was 1,480,000, a decrease of 60,000 from the previous week's revised level. The previous week's level was revised up by 32,000 from 1,508,000 to 1,540,000. The 4-week moving average was 1,620,750, a decrease of 160,750 from the previous week's revised average. The previous week's average was revised up by 8,000 from 1,773,500 to 1,781,500.
emphasis added

The previous week was revised up.

This does not include the 728,120 initial claims for Pandemic Unemployment Assistance (PUA).

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 1,620,750.

This was higher than the consensus forecast of 1.3 million initial claims and the previous week was revised up.

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

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

Continued claims decreased to 19,522,000 (SA) from 20,289,000 (SA) last week and will likely stay at a high level until the crisis abates.

Note: There are an additional 11,046,401 receiving Pandemic Unemployment Assistance (PUA). This is a special program for business owners, self-employed, independent contractors or gig workers not receiving other unemployment insurance.

by Calculated Risk on 6/24/2020 08:42:00 PM

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for a 1.300 million initial claims, down from 1.508 million the previous week.

• Also at 8:30 AM, Durable Goods Orders for May from the Census Bureau. The consensus is for a 10.6% increase in durable goods orders.

• Also at 8:30 AM, Gross Domestic Product, 1st quarter 2020 (Third estimate). The consensus is that real GDP decreased 5.0% annualized in Q1, unchanged from the second estimate of a 5.0% decrease.

• At 11:00 AM, the Kansas City Fed manufacturing survey for June. This is the last of regional manufacturing surveys for June.<

by Calculated Risk on 6/24/2020 05:59:00 PM

The US is now conducting over 500,000 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 502,290 test results reported over the last 24 hours.

There were 38,672 positive tests.  This is the most positive tests ever.

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 7.7% (red line).  This is the highest percent positive since early May.

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

by Calculated Risk on 6/24/2020 12:56:00 PM

The Department of Transportation (DOT) reported:

Travel on all roads and streets changed by -39.8% (-112.0 billion vehicle miles) for April 2020 as compared with April 2019. Travel for the month is estimated to be 169.6 billion vehicle miles.

The seasonally adjusted vehicle miles traveled for April 2020 is 160.9 billion miles, a -41.2% (-112.9 billion vehicle miles) decline from April 2019. It also represents -27.2% decline (-60 billion vehicle miles) compared with March 2020.

Cumulative Travel for 2020 changed by -14.8% (-152.3 billion vehicle miles). The cumulative estimate for the year is 875.9 billion vehicle miles of travel.

Click on graph for larger image.

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

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

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

This graph shows the YoY change in vehicle miles driven.

Miles driven were down 39.8% year-over-year in April.

by Calculated Risk on 6/24/2020 11:11:00 AM

Note: The question on lost income is always since March 13, 2020 - so this percentage will not decline.

From the Census Bureau: Measuring Household Experiences during the Coronavirus (COVID-19) Pandemic

The U.S. Census Bureau, in collaboration with five federal agencies, is in a unique position to produce data on the social and economic effects of COVID-19 on American households. The Household Pulse Survey is designed to deploy quickly and efficiently, collecting data to measure household experiences during the Coronavirus (COVID-19) pandemic. Data will be disseminated in near real-time to inform federal and state response and recovery planning.
…
Data collection for the Household Pulse Survey began on April 23, 2020. The Census Bureau will collect data for 90 days, and release data on a weekly basis.

This will be updated weekly, and the Census Bureau released the recent survey results today. This survey asks about Loss in Employment Income, Expected Loss in Employment Income, Food Scarcity, Delayed Medical Care, Housing Insecurity and K-12 Educational Changes.

Click on graph for larger image.

The data was collected between June 11 and June 16, 2020.

Definitions:

Loss in employment income: "Percentage of adults in households where someone had a loss in employment income since March 13, 2020."

This number is since March 13, and hasn't changed significantly.

Expected Loss in Employment Income: "Percentage of adults who expect someone in their household to have a loss in employment income in the next 4 weeks."

31% of households expect a loss in income over the next 4 weeks.   This is down from 38.8% in late April.

Food Scarcity: Percentage of adults in households where there was either sometimes or often not enough to eat in the last 7 days.

About 10% of households report food scarcity.

Delayed Medical Care: "Percentage of adults who delayed getting medical care because of the COVID-19 pandemic in the last 4 weeks."

41% of households report they delayed medical care over the last 4 weeks. This has not declined.

Housing Insecurity: "Percentage of adults who missed last month’s rent or mortgage payment, or who have slight or no confidence that their household can pay next month’s rent or mortgage on time."

23.2% of households reported they missed last month's rent or mortgage payment.

K-12 Educational Changes: "Percentage of adults in households with children in public or private school, where classes were taught in a distance learning format, or changed in some other way."

Essentially all households with children are reporting were not being taught in a normal format.

by Calculated Risk on 6/24/2020 09:06:00 AM

Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.

From the AIA: Architecture billings downward trajectory moderates

Demand for design services in May saw few signs of rebounding following a record drop in billings the month prior, according to a new report today from The American Institute of Architects (AIA).

AIA’s Architecture Billings Index (ABI) score for May was 32.0 compared to 29.5 in April, but still represents a significant decrease in services provided by U.S. architecture firms (any number below 50 indicates a decrease in billings). In May, the decline in new project inquiries and design contract scores moderated from April, posting scores of 38.0 and 33.1 respectively.

“A large portion of the design and construction industry remains mired in steep cutbacks as many businesses and organizations are still trying to figure out what actions make sense in this uncertain economic environment,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “There are growing signs of activity beginning to pick up in some areas, but others are seeing a pause as pandemic concerns continue to grow.”
...
• Regional averages: West (36.0); South (30.6); Midwest (29.7); Northeast (25.1)

• Sector index breakdown: institutional (35.7); multi-family residential (34.8); mixed practice (28.5); commercial/industrial (24.8)
emphasis added

Click on graph for larger image.

This graph shows the Architecture Billings Index since 1996. The index was at 32.0 in May, up from 29.5 in April. Anything below 50 indicates contraction in demand for architects' services.

Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.

This represents a significant decrease in design services, and suggests a decline in CRE investment in early 2021 (This usually leads CRE investment by 9 to 12 months).

by Calculated Risk on 6/24/2020 07:00:00 AM

From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey

Mortgage applications decreased 8.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 19, 2020.

... The Refinance Index decreased 12 percent from the previous week and was 76 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 4 percent compared with the previous week and was 18 percent higher than the same week one year ago.
...
“Mortgage applications decreased 9 percent last week, with both refinance and purchase activity falling despite the 30-year fixed rate mortgage staying at 3.30 percent – the record low in MBA’s survey,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Refinance applications dropped to their lowest level in three weeks, but the index remained 76 percent higher than a year ago. Despite the decline last week, MBA still anticipates refinance originations to increase to $1.35 trillion in 2020 – the highest level since 2012.”

Added Kan, “Even with high unemployment and economic uncertainty, the purchase market is strong. Activity has climbed above year-ago levels for five straight weeks and was 18 percent higher than a year ago last week. One factor that may potentially crimp growth in the months ahead is that the release of pent-up demand from earlier this spring is clashing with the tight supply of new and existing homes on the market. Additional housing inventory is needed to give buyers more options and to keep home prices from rising too fast.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) remained unchanged at 3.30 percent, with points increasing to 0.32 from 0.29 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Click on graph for larger image.


The first graph shows the refinance index since 1990.

The refinance index has been very volatile recently depending on rates and liquidity.

But the index is up signficantly from last year.

The second graph shows the MBA mortgage purchase index

According to the MBA, purchase activity is up 18% year-over-year.

Note: Red is a four-week average (blue is weekly).

by Calculated Risk on 6/23/2020 07:06:00 PM

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

• At 9:00 AM, FHFA House Price Index for April 2019. This was originally a GSE only repeat sales, however there is also an expanded index.

• During the day, The AIA's Architecture Billings Index for May (a leading indicator for commercial real estate).

by Calculated Risk on 6/23/2020 05:52:00 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 500,000 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 511,484 test results reported over the last 24 hours.

There were 32,984 positive tests.  This is the most positive tests since May 1st.

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 6.4% (red line).

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

by Calculated Risk on 6/23/2020 01:02:00 PM

From the NMHC: NMHC Rent Payment Tracker Finds 92.2 Percent of Apartment Households Paid Rent as of June 20

The National Multifamily Housing Council (NMHC)’s Rent Payment Tracker found 92.2 percent of apartment households made a full or partial rent payment by June 20 in its survey of 11.4 million units of professionally managed apartment units across the country.

This is unchanged from the share who paid rent through June 20, 2019 and compares to 90.8 percent that had paid by May 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.

“With the support of expanded unemployment benefits, stimulus funds and significant efforts by apartment community owners and operators to help residents impacted by the outbreak of COVID-19 and resulting financial hardships, it seem most renters were once again able to meet their obligations,” said Doug Bibby, NMHC President. “The early steps taken by lawmakers have proven critical to keeping many safely and securely housed. As we move forward and the economy begins to recover, it will be vitally important that lawmakers continue to support the nation’s renters and forestall even greater economic harm.”
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 unchanged 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 extra 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 9.3 million participants (mostly self-employed), expires at the end of 2020, but these individuals have also been receiving the extra $600 per week that expires in July.