Tuesday, October 13, 2020

October 13 COVID-19 Test Results

by Calculated Risk on 10/13/2020 06:52:00 PM

The US is now mostly reporting 700 thousand to 1 million tests per day. Based on the experience of other countries, the percent positive needs to be well under 5% to really push down new infections (probably close to 1%), 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 840,142 test results reported over the last 24 hours.

There were 46,647 positive tests.

Over 8,600 Americans deaths from COVID have been reported in October. See the graph on US Daily Deaths here.

COVID-19 Tests per Day Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 5.5% (red line is 7 day average).

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.

COVID-19 Positive Tests per DayThe second graph shows the 7 day average of positive tests reported.

The dashed line is the July high.

Note that there were very few tests available in March and April, and many cases were missed (the percent positive was very high - see first graph). By June, the percent positive had dropped below 5%.

Everyone needs to be vigilant or we might see record high cases this Fall and Winter.

Technical Note: October Employment Report Will Show a Significant Decrease in Temporary Census Workers

by Calculated Risk on 10/13/2020 02:21:00 PM

The Census Bureau released an update today on 2020 Census Paid Temporary Workers

As of the September reference week, there were 246,801 decennial Census temporary workers. As of week of September 27 to October 3, there were 163,913 temp workers.

That is a decrease of 82,888 - with two more weeks of layoffs to go


This week is the BLS reference week, and it seems likely another 70,000 or so temporary workers were let go this week and last week (to be released in two weeks).

This means the October employment report will show a sharp decrease in temporary Census employment.

In August, the employment report showed a gain of 238,000 temporary 2020 Census workers, boosting the headline number.

In September, the employment report showed a decrease of 41,000 temporary 2020 Census workers, reducing the headline number.

My guess is the October employment report will show a decrease of around 150,000 temporary Census workers (maybe even more).

Cleveland Fed: Key Measures Show Inflation Eased Year-over-year in September

by Calculated Risk on 10/13/2020 11:11:00 AM

The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning:

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.1% September. The 16% trimmed-mean Consumer Price Index rose 0.1% in September. "The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics’ (BLS) monthly CPI report".

Note: The Cleveland Fed released the median CPI details for September here. Used cars and trucks increased at a 118% annualized rate in September.

Inflation Measures Click on graph for larger image.

This graph shows the year-over-year change for these four key measures of inflation. On a year-over-year basis, the median CPI rose 2.5%, the trimmed-mean CPI rose 2.4%, and the CPI less food and energy rose 1.7%. Core PCE is for August and increased 1.6% year-over-year.

Used cars and trucks drove inflation in September. Overall inflation will not be a concern during the crisis.

Cost of Living Adjustment increases 1.3% in 2021, Contribution Base increased to $142,800

by Calculated Risk on 10/13/2020 09:17:00 AM

With the release of the CPI report this morning, we now know the Cost of Living Adjustment (COLA), and the contribution base for 2021.

From Social Security: Social Security Announces 1.3 Percent Benefit Increase for 2021

Social Security and Supplemental Security Income (SSI) benefits for approximately 70 million Americans will increase 1.3 percent in 2021, the Social Security Administration announced today.

The 1.3 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 64 million Social Security beneficiaries in January 2021. Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2020. (Note: some people receive both Social Security and SSI benefits). The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor’s Bureau of Labor Statistics.

Some other adjustments that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $142,800 from $137,700.
Currently CPI-W is the index that is used to calculate the Cost-Of-Living Adjustments (COLA). Here is a discussion from Social Security on the current calculation (1.3% increase) and a list of previous Cost-of-Living Adjustments.

The contribution and benefit base will be $137,700 in 2021.

The National Average Wage Index increased to $54,099.99 in 2019, up 3.75% from $52,145.80 in 2018 (used to calculate contribution base).

BLS: CPI increased 0.2% in September, Core CPI increased 0.2%

by Calculated Risk on 10/13/2020 08:34:00 AM

From the BLS:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in September on a seasonally adjusted basis after rising 0.4 percent in August, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.4 percent before seasonal adjustment.

The index for used cars and trucks continued to rise sharply and accounted for most of the monthly increase in the seasonally adjusted all items index. The food index was unchanged, with an increase in the food away from home index offsetting a decline in the food at home index. The energy index rose 0.8 percent in September as the index for natural gas increased 4.2 percent.

The index for all items less food and energy rose 0.2 percent in September after larger increases in July and August. ...

The all items index rose 1.4 percent for the 12 months ending September, a slightly larger increase than the 1.3-percent rise for the 12-month period ending August. The index for all items less food and energy rose 1.7 percent over the last 12 months, the same increase as the period ending August.
emphasis added
Overall inflation was at expectations in September. I'll post a graph later today after the Cleveland Fed releases the median and trimmed-mean CPI.

Monday, October 12, 2020

Tuesday: CPI

by Calculated Risk on 10/12/2020 09:14:00 PM

Tuesday:
• At 8:30 AM ET, The Consumer Price Index for September from the BLS. The consensus is for a 0.2% increase in CPI, and a 0.2% increase in core CPI.

October 12 COVID-19 Test Results

by Calculated Risk on 10/12/2020 06:29:00 PM

The US is now mostly reporting 700 thousand to 1 million tests per day. Based on the experience of other countries, the percent positive needs to be well under 5% to really push down new infections (probably close to 1%), 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 931,308 test results reported over the last 24 hours.

There were 43,043 positive tests.

Almost 8,000 Americans deaths from COVID have been reported in October. See the graph on US Daily Deaths here.

COVID-19 Tests per Day Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 4.6% (red line is 7 day average).

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.

COVID-19 Positive Tests per DayThe second graph shows the 7 day average of positive tests reported.

The dashed line is the July high.

Note that there were very few tests available in March and April, and many cases were missed (the percent positive was very high - see first graph). By June, the percent positive had dropped below 5%.

Everyone needs to be vigilant or we might see record high cases this Fall and Winter.

MBA Survey: "Share of Mortgage Loans in Forbearance Declines to 6.32%"

by Calculated Risk on 10/12/2020 04:15:00 PM

Note: This is as of October 4th.

From the MBA: Share of Mortgage Loans in Forbearance Declines to 6.32%

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 49 basis points from 6.81% of servicers’ portfolio volume in the prior week to 6.32% as of October 4, 2020. According to MBA’s estimate, 3.2 million homeowners are in forbearance plans.
...
“The share of loans in forbearance declined across all loan types. With the forbearance program for federally backed loans under the CARES Act reaching the six-month mark, many borrowers saw their forbearance plans expire because they did not contact their servicer. Another reason for expirations was that borrower information needed to determine an appropriate loss mitigation option was not yet in place,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Borrowers with federally backed mortgages need to contact their servicer to obtain another six months of reprieve if they are still impacted by the pandemic. As of now, some borrowers are exiting forbearance without making contact or without a plan in place. Servicers are making outreach efforts to attempt to work with these borrowers to determine the best options for them, including an extension.”

Added Fratantoni, “On a more positive note, nearly two-thirds of borrowers who exited forbearance remained current on their payments, repaid their forborne payments, or moved into a payment deferral plan. All of these borrowers have been able to resume – or continue – their pre-pandemic monthly payments.”
...
By stage, 25.50% of total loans in forbearance are in the initial forbearance plan stage, while 72.97% are in a forbearance extension. The remaining 1.53% are forbearance re-entries.
emphasis added
MBA Forbearance Survey 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, and has been trending down for the last few months.

The MBA notes: "Total weekly forbearance requests as a percent of servicing portfolio volume (#) increased relative to the prior week: from 0.08% to 0.11%."

There hasn't been a pickup in forbearance activity related to the end of the extra unemployment benefits.

Update: Real Estate Agent Boom and Bust

by Calculated Risk on 10/12/2020 01:53:00 PM

Way back in 2005, I posted a graph of the Real Estate Agent Boom. Here is another update to the graph.

The graph shows the number of real estate licensees in California.

The number of agents peaked at the end of 2007 (housing activity peaked in 2005, and prices in 2006).

The number of salesperson's licenses is off 27% from the peak, and is increasing again (up 11% from low). The number of salesperson's licenses has increased to November 2004 levels.

Brokers' licenses are off 15% from the peak and have fallen to November 2005 levels, and are still slowly declining.

California Real Estate Licensees Click on graph for larger image.

We are seeing a pickup in Real Estate licensees in California (although down a little recently), and the number of Brokers is still slowly declining.

Demographics: Renting vs. Owning

by Calculated Risk on 10/12/2020 11:01:00 AM

Yesterday I posted some recent demographic data U.S. Demographics: Largest 5-year cohorts, and Ten most Common Ages in 2019

A decade ago, a large cohort was moving into the 20 to 29 year old age group (a key age group for renters) and I was very positive on apartments. In 2010, we started discussing the turnaround for apartments. Then, in January 2011, I attended the NMHC Apartment Strategies Conference in Palm Springs, and the atmosphere was very positive.

Now a large cohort is moving into the 30 to 39 age group (a key for ownership).

Note: Household formation would be a better measure than population, but reliable data for households is released with a long lag.

NOTE: This graph is updated using the Vintage 2019 estimates. IMPORTANT NOTE: Housing economist Tom Lawler has pointed out some issues with earlier Census estimates, see: Lawler: "New Long-Term Population Projections Show Slower Growth than Previous Projections but Are Still Too High"

Population 20 to 34 years oldClick on graph for larger image.

This graph shows the longer term trend for three key age groups: 20 to 29, 25 to 34, and 30 to 39 (the groups overlap).

This graph is from 1990 to 2060 (all data from BLS: current to 2060 is projected).

We can see the surge in the 20 to 29 age group (red).  Once this group exceeded the peak in earlier periods, there was an increase in apartment construction.  This age group peaked in 2018 / 2019 (until the 2030s), and the 25 to 34 age group (orange, dashed) will peak around 2023.  This suggests demand for apartments will soften somewhat.

For buying, the 30 to 39 age group (blue) is important (note: see Demographics and Behavior for some reasons for changing behavior).  The population in this age group is increasing, and will increase significantly over the next decade.

This demographics is now positive for home buying, and this is a key reason I expect single family housing starts to continue to increase.

Note: Based on Lawler's work, I expect some downward revisions to the prime population following the 2020 Census (lower immigration, more prime age deaths). But the general story will remain the same.