by Calculated Risk on 8/27/2020 09:00:00 PM

Friday:
• At 8:30 AM ET, Personal Income and Outlays, July 2020. The consensus is for a 0.2% decrease in personal income, and for a 1.5% increase in personal spending. And for the Core PCE price index to increase 0.5%.

• At 9:45 AM, Chicago Purchasing Managers Index for August.

• At 10:00 AM, University of Michigan's Consumer sentiment index (Final for August). The consensus is for a reading of 72.8.

by Calculated Risk on 8/27/2020 07:42:00 PM

IMPORTANT: The CDC has changed their guidance on who should be tested - at the direction of the White House - over the objections of scientists. This action is clearly intended to make the numbers look better over the next couple of months. See: Controversial change in guidelines about coronavirus testing directed by the White House coronavirus task force

The CDC estimates that 40 percent of those who test positive for the coronavirus have no symptoms but may be highly infectious and spread it to other people.

These are the people the White House doesn't want to test. Testing, tracing and transparency are keys to suppressing the virus.  This change in guidance is counterproductive.

The US is now mostly reporting over 700,000 tests per day (fewer recently). 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 (or take actions to push down the number of new infections).

There were 742,340 test results reported over the last 24 hours.

There were 44,264 positive tests.

There have been over 27,000 COVID reported deaths in the first 27 days of August. See the graph on US Daily Deaths here.

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 6.0% (red line).

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

And check out COVID Exit Strategy to see how each state is doing.

by Calculated Risk on 8/27/2020 04:47:00 PM

From the Las Vegas Visitor Authority: July 2020 Las Vegas Visitor Statistics

The destination hosted an estimated 1.4M visitors in July, about 40% of last year's levels but up from the approximately 1.1M visitors hosted in June. The convention segment continued to register no measurable volume with continued mandated restrictions on group sizes.

With open properties representing an inventory of 123,684 rooms*, total occupancy reached 42.5% for the month while weekend occupancy came in at 54.4% and midweek occupancy reached 36.9%.
* Reflects weighted average of daily room tallies

Here is the data from the Las Vegas Convention and Visitors Authority.

Click on graph for larger image.

The blue and red bars are monthly visitor traffic (left scale) for 2019 and 2020.   The dashed blue and orange lines are convention attendance (right scale). 

Convention traffic in July was down 100% compared to July 2019.

And visitor traffic was down 61% YoY.

The casinos started to reopen on June 4th (it appears about 80% of rooms have now opened).

by Calculated Risk on 8/27/2020 12:49:00 PM

Earlier: Weekly Initial Unemployment Claims decrease to 1,006,000

This was the 23rd consecutive week with extraordinarily high initial claims.

More importantly, continued claims are still extremely high (second graph).

The following graph shows regular initial unemployment claims (blue) and PUA claims (red) since early February.

Click on graph for larger image.

Initial claims, including Pandemic Unemployment Assistance (PUA) are still above 1.6 million per week.

The worst week during the great recession was 665,000. So initial claims are still about 1 million per week higher than the worst week of the great recession!

We are probably seeing some layoffs related to the higher level of COVID cases and also from the end of some Payroll Protection Programs (PPP).

The second graph shows all person receiving unemployment insurance benefits on all programs. Note that this data is released with a lag, and is not seasonally adjusted.

There are typically around 2 million people receiving benefits from the various programs (mostly regular unemployment insurance).

As of the release this morning, there were still 27 million people receiving benefits as of August 8th.

by Calculated Risk on 8/27/2020 11:45:00 AM

From HotelNewsNow.com: STR: US hotel results for week ending 22 August

U.S. hotel occupancy fell to a three-week low during the period of 16-22 August, according to the latest data from STR.

16-22 August 2020 (percentage change from comparable week in 2019):

• Occupancy: 48.8% (-30.3%)
• Average daily rate (ADR): US$100.08 (-22.7%)
• Revenue per available room (RevPAR): US$48.81 (-46.1%)

The prior week, the industry had reached 50% occupancy for the first time since mid-March. Lower occupancy came as U.S. room demand declined week over week for the first time since mid-April. Reflective of school openings and less vacation travel, the industry sold 492,000 fewer room nights than the previous week, which represented a decrease of 2.7%. STR projects similar challenges with no corporate demand to replace leisure demand lost to the beginning of the school year.
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).

The leisure travel season usually peaks at the beginning of August, and then the occupancy rate typically declines sharply in the Fall.

With so many schools closed, the leisure travel season might have lasted longer than usual this year, but it is unlikely business travel will pickup significantly in the Fall.

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

by Calculated Risk on 8/27/2020 10:03:00 AM

From the NAR: Pending Home Sales Rise 5.9% in July

The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, rose 5.9% to 122.1 in July. Year-over-year, contract signings rose 15.5%. An index of 100 is equal to the level of contract activity in 2001.
...
The Northeast PHSI grew 25.2% to 112.3 in July, a 20.6% jump from a year ago. In the Midwest, the index rose 3.3% to 114.6 last month, up 15.4% from July 2019.

Pending home sales in the South increased 0.9% to an index of 142.0 in July, up 14.9% from July 2019. The index in the West rose 6.8% in July to 106.4, up 13.2% from a year ago.
emphasis added

This was slightly above expectations for this index. Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in August and September.

by Calculated Risk on 8/27/2020 09:07:00 AM

From Fed Chair Powell: Monetary Policy Framework Review

Federal Open Market Committee announces approval of updates to its Statement on Longer-Run Goals and Monetary Policy Strategy

This is on YouTube here.

by Calculated Risk on 8/27/2020 08:44:00 AM

The DOL reported:

In the week ending August 22, the advance figure for seasonally adjusted initial claims was 1,006,000, a decrease of 98,000 from the previous week's revised level. The previous week's level was revised down by 2,000 from 1,106,000 to 1,104,000. The 4-week moving average was 1,068,000, a decrease of 107,250 from the previous week's revised average. The previous week's average was revised down by 500 from 1,175,750 to 1,175,250.
emphasis added

The previous week was revised down.

This does not include the 607,806 initial claims for Pandemic Unemployment Assistance (PUA) that was up from 524,986 the previous week.

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 1,068,000.

Initial weekly claims was below the consensus forecast of 1.100 million initial claims, and the previous week was revised down.

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 14,535,000 (SA) from 14,758,000 (SA) last week and will likely stay at a high level until the crisis abates.

Note: There are an additional 10,972,770 receiving Pandemic Unemployment Assistance (PUA) that decreased from 11,224,774 the previous week. This is a special program for business owners, self-employed, independent contractors or gig workers not receiving other unemployment insurance.

by Calculated Risk on 8/27/2020 08:34:00 AM

From the BEA: Gross Domestic Product, 2nd Quarter 2020 (Second Estimate); Corporate Profits, 2nd Quarter 2020 (Preliminary Estimate)

Real gross domestic product (GDP) decreased at an annual rate of 31.7 percent in the second quarter of 2020, according to the "second" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 5.0 percent.

The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the decrease in real GDP was 32.9 percent. With the second estimate, private inventory investment and personal consumption expenditures (PCE) decreased less than previously estimated.
emphasis added

Here is a Comparison of Second and Advance Estimates. PCE growth was revised up to -34.1% from -34.6%. Residential investment was revised up from -38.7% to -37.9%. This was close to the consensus forecast.

by Calculated Risk on 8/26/2020 08:50:00 PM

Thursday:
• At 8:30 AM ET, Gross Domestic Product, 2nd quarter 2020 (second estimate). The consensus is that real GDP decreased 32.6% annualized in Q2, up from the advance estimate of -32.9% in Q2.

• Also at 8:30 AM, The initial weekly unemployment claims report will be released. The early consensus is for a 1.100 million initial claims, down from 1.106 million the previous week.

• At 9:10 AM, Speech, Fed Chair Jerome Powell, Monetary Policy Framework Review, At the Jackson Hole Economic Policy Symposium - Navigating the Decade Ahead: Implications for Monetary Policy

• At 10:00 AM, Pending Home Sales Index for July. The consensus is for a 4.5% increase in the index.

• At 11:00 AM, the Kansas City Fed manufacturing survey for August.