by Calculated Risk on 1/07/2021 10:09:00 AM

The December ISM Services index was at 57.2%, up from 55.9% last month. The employment index decreased to 48.2%, from 51.5%. Note: Above 50 indicates expansion, below 50 contraction.

From the Institute for Supply Management: Services PMI™ at 57.2%; December 2020 Services ISM® Report On Business®

Economic activity in the services sector grew in December for the seventh month in a row, say the nation's purchasing and supply executives in the latest Services ISM® Report On Business®.

The report was issued today by Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee: "The Services PMI™ registered 57.2 percent, 1.3 percentage points higher than the November reading of 55.9 percent. This reading represents a seventh straight month of growth for the services sector, which has expanded for all but two of the last 131 months.
emphasis added

by Calculated Risk on 1/07/2021 08:54:00 AM

From the Department of Commerce reported:

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $68.1 billion in November, up $5.0 billion from $63.1 billion in October, revised.

November exports were $184.2 billion, $2.2 billion more than October exports. November imports were $252.3 billion, $7.2 billion more than October imports.
emphasis added

Click on graph for larger image.

Both exports and imports increased in November.

Exports are down 12.5% compared to November 2019; imports are unchanged compared to November 2019.

Both imports and exports decreased sharply due to COVID-19, and have now bounced back (imports much more than exports),

The second graph shows the U.S. trade deficit, with and without petroleum.

The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

Note that the U.S. exported a slight net positive petroleum products in recent months.

Oil imports averaged $35.68 per barrel in November, down from $36.23 per barrel in October, and down from $51.91 in November 2019.

The trade deficit with China increased to $30.7 billion in November, from $26.3 billion in November 2019.

by Calculated Risk on 1/07/2021 08:39:00 AM

The DOL reported:

In the week ending January 2, the advance figure for seasonally adjusted initial claims was 787,000, a decrease of 3,000 from the previous week's revised level. The previous week's level was revised up by 3,000 from 787,000 to 790,000. The 4-week moving average was 818,750, a decrease of 18,750 from the previous week's revised average. The previous week's average was revised up by 750 from 836,750 to 837,500.
emphasis added

This does not include the 161,460 initial claims for Pandemic Unemployment Assistance (PUA) that was down from 310,462 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 818,750.

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 5,072,000 (SA) from 5,198,000 (SA) last week and will likely stay at a high level until the crisis abates.

Note: There are an additional 8,383,387 receiving Pandemic Unemployment Assistance (PUA) that decreased from 8,453,940 the previous week (there are questions about these numbers). This is a special program for business owners, self-employed, independent contractors or gig workers not receiving other unemployment insurance. 

An additional 4,516,900 are receiving Pandemic Emergency Unemployment Compensation (PEUC) that decreased from 4,810,334 the previous week.

by Calculated Risk on 1/06/2021 09:26:00 PM

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. 

• Also at 8:30 AM, Trade Balance report for November from the Census Bureau. The consensus is the trade deficit to be $64.5 billion.  The U.S. trade deficit was at $63.1 billion in October.

• At 10:00 AM, the ISM Services Index for December.

by Calculated Risk on 1/06/2021 07:21:00 PM

Note: It will take a week or so for the data to adjust for lack of reporting during the holidays. The week-over-week growth in positive cases slowed prior to the holidays.  Hopefully that continues after the holidays.

I'm looking forward to not posting this data in a few months.

The US is now averaging close to 2 million tests per day. Based on the experience of other countries, for adequate test-and-trace (and isolation) to reduce infections, the percent positive needs to be under 5% (probably close to 1%), so the US has far too many daily cases - and percent positive - to do effective test-and-trace.

There were 1,605,799 test results reported over the last 24 hours.

There were 243,346 positive tests.

Over 15,000 US deaths have been reported so far in January. 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 15.2% (red line is 7 day average).  The percent positive is calculated by dividing positive results by total tests (including pending).

And check out COVID Act Now to see how each state is doing. (updated link to new site)

The second graph shows the 7 day average of positive tests reported and daily hospitalizations.


• Record Hospitalizations

• Record 7-Day Cases

by Calculated Risk on 1/06/2021 02:58:00 PM

From the Fed: Minutes of the Federal Open Market Committee, December 15-16, 2020. A few excerpts:

Participants continued to see the uncertainty surrounding the economic outlook as elevated, with the path of the economy highly dependent on the course of the virus. The positive vaccine news was seen as reducing downside risks over the medium term, and a number of participants saw risks to economic activity as more balanced than earlier. Still, participants saw significant uncertainties regarding how quickly the deployment of vaccines would proceed as well as how different members of the public would respond to the availability of vaccines. Participants cited several downside risks that could threaten the economic recovery. These risks included the possibility of significant additional fiscal policy support not materializing in a timely manner, the potential for further adverse pandemic developments—which could lead to more-stringent restrictions, more-severe business failures, and more permanent job losses—and the chance that trade negotiations between the United Kingdom and the European Union would not be concluded successfully before the December 31 deadline. As upside risks, participants mentioned the prospect that the release of pent-up demand, spurred by wider-scale vaccinations and easing of social distancing, could boost spending and bring individuals back to the labor force more quickly than currently expected as well as the possibility that fiscal policy developments could see measures that were larger than expected in amount or economic impact. Regarding inflation, participants generally viewed the risks as having become more balanced than they were earlier in the year, though most still viewed the risks as being weighted to the downside. As an upside risk to inflation, a few participants noted the potential for a stronger-than-expected recovery, coupled with the possible emergence of pandemic-related supply constraints, to boost inflation.
emphasis added

by Calculated Risk on 1/06/2021 12:32:00 PM

The following graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the December 2020 seasonally adjusted annual sales rate (SAAR).

Heavy truck sales really collapsed during the great recession, falling to a low of 180 thousand SAAR in May 2009.  Then heavy truck sales increased to a new all time high of 575 thousand SAAR in September 2019.

However heavy truck sales started declining in late 2019 due to lower oil prices.

Note: "Heavy trucks - trucks more than 14,000 pounds gross vehicle weight."


Click on graph for larger image.

Heavy truck sales really declined towards the end of March due to COVID-19 and the collapse in oil prices, but have since rebounded.

Heavy truck sales were at 454 thousand SAAR in December, down from 477 thousand SAAR in November, and down 5% from 475 thousand SAAR in December 2019.

For the year, heavy truck sales were 409 thousand, down 22.3% from 527 thousand in 2019.    This was the fewest heavy truck sales since 2016.

by Calculated Risk on 1/06/2021 09:51:00 AM

The BEA released their estimate of light vehicle sales for December this morning. The BEA estimates sales of 16.27 million SAAR in December 2020 (Seasonally Adjusted Annual Rate), up 4.1% from the November sales rate, and down 3.2% from December 2019.

This was above the consensus estimate of 15.8 million SAAR.

Click on graph for larger image.

This graph shows light vehicle sales since 2006 from the BEA (blue) and the BEA's estimate for December (red).

The impact of COVID-19 was significant, and April was the worst month.

Since April, sales have increased, but are still down  year-over-year,

The second graph shows light vehicle sales since the BEA started keeping data in 1967.

Note: dashed line is current estimated sales rate of 16.27 million SAAR.

Annual sales in 2020, at 14.46 million, were down 14.7% from 16.95 million in 2019.

This was the fewest annual sales since 2012.

by Calculated Risk on 1/06/2021 09:31:00 AM

This report is for closed sales in December; sales are counted at the close of escrow, so the contracts for these homes were mostly signed in October and November.

The Las Vegas Realtors reported Southern Nevada home prices end the year in record territory; LVR housing statistics for December 2020

LVR reported a total of 4,097 existing local homes, condos and townhomes were sold during December. Compared to the same time last year, December sales were up 26.7% for homes and up 30.9% for condos and townhomes.

According to LVR, the total number of existing local homes, condos, townhomes and other residential properties sold in Southern Nevada during 2020 was 41,617. That’s up from 41,269 total sales in 2019. By comparison, LVR reported 42,876 total sales in 2018 and 45,388 in 2017.

“I think we surprised a lot of people with how the local housing market not only held up, but set records, during an otherwise rough year for our community and our local economy,” said 2021 LVR President Aldo Martinez. “I don’t see much changing in the early part of 2021. Demand for housing remains high. Our housing supply and mortgage interest rates are still very low. As long as these trends continue, it’s a good bet that local home prices will keep rising.”

By the end of December, LVR reported 3,240 single-family homes listed for sale without any sort of offer. That’s down 41.5% from one year ago. For condos and townhomes, the 1,153 properties listed without offers in December represent a 25.9% drop from one year ago.
…
Despite the coronavirus crisis and economic downturn, the number of so-called distressed sales remains near historically low levels. LVR reported that short sales and foreclosures combined accounted for just 0.9% of all existing local property sales in December. That compares to 1.8% of all sales one year ago, 2.9% two years ago and 3.6% three years ago.
emphasis added

1) Overall sales were up 27.4% year-over-year to 4,097 in December 2020 from 3,214 in December 2019.

2) Active inventory (single-family and condos) is down from a year ago, from a total of 7,093 in 2019 to 4,393 in December 2020. Note: Total inventory was down 38.1% year-over-year.   And months of inventory is low.

3) Low level of distressed sales.

by Calculated Risk on 1/06/2021 08:20:00 AM

From ADP:

Private sector employment decreased by 123,000 jobs from November to December according to the December ADP National Employment Report®. ... The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.

“As the impact of the pandemic on the labor market intensifies, December posted the first decline since April 2020,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “The job losses were primarilly concentrated in retail and leisure and hospitality.”
emphasis added

The BLS report will be released Friday, and the consensus is for 100 thousand non-farm payroll jobs added in December. Of course the ADP report has not been very useful in predicting the BLS report.