by Calculated Risk on 10/08/2021 08:18:00 AM

Note: Both Black Knight and the MBA (Mortgage Bankers Association) are putting out weekly estimates of mortgages in forbearance.

This data is as of October 5th.

From Andy Walden at Black Knight: Largest Weekly Forbearance Decline in 12 Months

We’ve been waiting for a sizable drop in the number of active forbearance plans, given the large number of plans both marked for either review (for extension/removal) or final expiration in September.

Well, this week has brought the first real signs of that. In fact, according to our McDash Flash daily forbearance tracking dataset, the population dropped by 11% since last Tuesday, marking the largest weekly decline in 12 months.

The number of active forbearance plans fell by 177,000 this week with declines seen across all investor classes, led by an 84,000 plan drop among FHA/VA loans. Plans among GSE loans and those held in bank portfolios and private label securities also fell, seeing 50,000 (-11%) and 43,000 (-8%) declines respectively.

As of October 5, 1.39 million mortgage holders remain in COVID-19 related forbearance plans, representing 2.6% of all active mortgages, including 1.4% of GSE, 4.3% of FHA/VA and 3.6% of portfolio held and privately securitized loans.

Click on graph for larger image.

Overall, forbearances have declined by 294,000 (-17%) over the past 30 days, the fastest monthly rate of improvement since October 2020. Plan exits surged then as the first wave of forbearance entrants reached their six-month mark. The folks who’d remained are now reaching the end of their allowable terms.

There are still more than 180,000 plans with September month-end review dates. Keep in mind that this data only covers the last business day in that month and the first three in October. Additional exits are likely in coming weeks as well as servicers continue to work through the large volumes of expirations.
emphasis added

by Calculated Risk on 10/07/2021 08:26:00 PM

My August Employment Preview

Goldman September Payrolls Preview

Friday:
• At 8:30 AM, Employment Report for September.   The consensus is for 460 thousand jobs added, and for the unemployment rate to decrease to 5.1%.

by Calculated Risk on 10/07/2021 04:16:00 PM

Note: Since occupancy declined sharply at the onset of the pandemic, CoStar is comparing to 2019.

From CoStar: STR: US Hotel Performance Slides in Latest Weekly Data

U.S. hotel performance dipped from the previous week, according to STR‘s latest data through Oct. 2.

26 September through 2 October 2021 (percentage change from comparable week in 2019*):

• Occupancy: 61.7% (-9.2%)
• Average daily rate (ADR): US$130.87 (+1.2%)
• Revenue per available room (RevPAR): US$80.78 (-8.2%)

*Due to the steep, pandemic-driven performance declines of 2020, STR is measuring recovery against comparable time periods from 2019.
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 2021, black is 2020, blue is the median, dashed purple is 2019, and dashed light blue is for 2009 (the worst year on record for hotels prior to 2020).

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

The Summer months had decent occupancy with solid leisure travel, and occupancy was only off about 7% in July and August compared to 2019.

But it is uncertain what will happen over the next couple of months with business travel.  Usually weekly occupancy increases to around 70% in the weeks following Labor Day due to renewed business travel.

by Calculated Risk on 10/07/2021 04:07:00 PM

A few brief excerpts from a note by Goldman Sachs economist Spencer Hill:

We estimate nonfarm payrolls rose 600k in September ... we believe the nationwide expiration of enhanced unemployment benefits on September 5 boosted effective labor supply and job growth ... We are assuming a 200k boost in tomorrow’s numbers and a larger boost in October. We also believe the reopening of schools contributed to September job growth, by around 150k. ... We estimate a one-tenth drop in the unemployment rate to 5.1%
emphasis added

CR Note: The consensus is for 460 thousand jobs added, and for the unemployment rate to decrease to 5.1%.

by Calculated Risk on 10/07/2021 03:23:00 PM

The CDC is the source for all data.

According to the CDC, on Vaccinations.  Total doses administered: 399,552,444, as of a week ago 392,909,995, or 0.95 million doses per day.

COVID Metrics
	Today	Week Ago	Goal
Percent fully Vaccinated	56.2%	55.6%	≥70.0%1
Fully Vaccinated (millions)	186.6	184.6	≥2321
New Cases per Day3	95,448	107,953	≤5,0002
Hospitalized3	63,921	74,091	≤3,0002
Deaths per Day3	1,431	1,562	≤502
1 Minimum to achieve "herd immunity" (estimated between 70% and 85%). 2my goals to stop daily posts, 37 day average for Cases, Currently Hospitalized, and Deaths 🚩 Increasing 7 day average week-over-week for Cases, Hospitalized, and Deaths ✅ Goal met.

IMPORTANT: For "herd immunity" most experts believe we need 70% to 85% of the total population fully vaccinated (or already had COVID).  

KUDOS to the residents of the 13 states and D.C. that have achieved 60% of total population fully vaccinated: Vermont at 69.8%, Connecticut, Maine, Rhode Island, Massachusetts, New Jersey, Maryland, New York, New Mexico, New Hampshire, Washington, Oregon, Virginia, and District of Columbia at 60.7%.

The following 22 states have between 50% and 59.9% fully vaccinated: Colorado at 59.9%, California, Minnesota, Hawaii, Pennsylvania, Delaware, Florida, Wisconsin, Texas, Nebraska, Iowa, Illinois, Michigan, Kentucky, South Dakota, Arizona, Kansas, Nevada, Alaska, Utah, North Carolina and Ohio at 50.7%.

Next up (total population, fully vaccinated according to CDC) are Montana at 48.9%, Indiana at 48.8%, Missouri at 48.4% and Oklahoma at 48.2%.

Click on graph for larger image.

This graph shows the daily (columns) and 7 day average (line) of positive tests reported.

by Calculated Risk on 10/07/2021 01:29:00 PM

Today, in the Newsletter: Homebuilder Comments in September: “Supply chain, supply chain, supply chain."

Excerpt:

Some homebuilder comments courtesy of Rick Palacios Jr., Director of Research at John Burns Real Estate Consulting (a must follow for housing on twitter!):

"Just published September home builder survey results (sales, prices, costs, communities, etc.). Big themes: 1) Supply chain, supply chain, supply chain. 2) Monthly price hikes no longer the norm. 3) Some of the hottest markets sounding toppy. Market commentary to follow…"

by Calculated Risk on 10/07/2021 11:38:00 AM

On Friday at 8:30 AM ET, the BLS will release the employment report for September. The consensus is for 460 thousand jobs added, and for the unemployment rate to decrease to 5.1%.

There were 235 thousand jobs added in August, and the unemployment rate was at 5.2%.

Click on graph for larger image.

• First, currently there are still about 5.3 million fewer jobs than in February 2020 (before the pandemic).

This graph shows the job losses from the start of the employment recession, in percentage terms.

The current employment recession was by far the worst recession since WWII in percentage terms, but is now better than the worst of the "Great Recession".

• ADP Report: The ADP employment report showed a gain of 568,000 private sector jobs, above the consensus estimate of 430,000 jobs added.  The ADP report hasn't been very useful in predicting the BLS report, but this suggests the BLS report could be above expectations.

• ISM Surveys: Note that the ISM services are diffusion indexes based on the number of firms hiring (not the number of hires).  The ISM® manufacturing employment index increased in September to 50.2%, up from 49.0% last month.   This would suggest a decline in manufacturing employment of around 20,000 jobs in September. ADP showed 49,000 manufacturing jobs added.

The ISM® Services employment index decreased in September to 53.0%, down from 53.7% last month.   This would suggest an increase in service employment of around 150,000 jobs in September.

Combined, the ISM indexes suggest a weaker than expected employment report.

• Unemployment Claims: The weekly claims report showed little change in the number of initial unemployment claims during the reference week (includes the 12th of the month) from 349,000 in August to 351,000 in September. This would usually suggest about the same number of layoffs in September as in August, although this might not be very useful right now. In general, weekly claims have been above expectations in September.

• Permanent Job Losers: Something to watch in the employment report will be "Permanent job losers". While there has been a strong bounce back in total employment, from the shutdown in March and April 2020, permanent job losers hasn't increased as sharply.

This graph shows permanent job losers as a percent of the pre-recession peak in employment through the June report.

This data is only available back to 1994, so there is only data for three recessions. In August, the number of permanent job losers decreased to 2.487 million from 2.930 million in July. These jobs will likely be the hardest to recover.

• IMPORTANT: Usually in September, about 1.2 million educators are hired as the school year starts in some areas.  This is seasonally adjusted to around 0 (since it is expected).  It is unclear if that many will be hired this year - or more (making up for low hiring), or less (due to the ongoing pandemic).  This could distort the headline number.

• Conclusion: The data is mixed for September.   However, the consensus is fairly low.

As far as the pandemic, the number of daily cases during the reference week in September was around 142,000, up from around 128,000 in August.   It did appear that cases peaked in early September, so by the reference week there was some optimism that cases were declining.

My sense is the report will be close to consensus expectations.

by Calculated Risk on 10/07/2021 08:35:00 AM

The DOL reported:

In the week ending October 2, the advance figure for seasonally adjusted initial claims was 326,000, a decrease of 38,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 362,000 to 364,000. The 4-week moving average was 344,000, an increase of 3,500 from the previous week's revised average. The previous week's average was revised up by 500 from 340,000 to 340,500.
emphasis added

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 increased to 344,000.

The previous week was revised up.

Regular state continued claims decreased to 2,714,000 (SA) from 2,811,000 (SA) the previous week.

Note (released with a 2 week delay): There were an additional 647,690 receiving Pandemic Unemployment Assistance (PUA) that decreased from 1,059,248 the previous week (there are questions about these numbers). This was a special program for business owners, self-employed, independent contractors or gig workers not receiving other unemployment insurance.  And threre were an additional 630,814 receiving Pandemic Emergency Unemployment Compensation (PEUC) down from 991,813.

Weekly claims were lower than the consensus forecast.

by Calculated Risk on 10/06/2021 08:00:00 PM

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released.  The consensus is for 345 thousand initial claims, down from 362 thousand last week.

by Calculated Risk on 10/06/2021 05:12:00 PM

The CDC is the source for all data.

According to the CDC, on Vaccinations.  Total doses administered: 398,675,414, as of a week ago 391,992,662, or 0.95 million doses per day.

COVID Metrics
	Today	Week Ago	Goal
Percent fully Vaccinated	56.1%	55.9%	≥70.0%1
Fully Vaccinated (millions)	186.4	185.5	≥2321
New Cases per Day3	96,757	109,273	≤5,0002
Hospitalized3	65,162	75,426	≤3,0002
Deaths per Day3	1,428	1,488	≤502
1 Minimum to achieve "herd immunity" (estimated between 70% and 85%). 2my goals to stop daily posts, 37 day average for Cases, Currently Hospitalized, and Deaths 🚩 Increasing 7 day average week-over-week for Cases, Hospitalized, and Deaths ✅ Goal met.

IMPORTANT: For "herd immunity" most experts believe we need 70% to 85% of the total population fully vaccinated (or already had COVID).  

KUDOS to the residents of the 13 states and D.C. that have achieved 60% of total population fully vaccinated: Vermont at 69.8%, Connecticut, Maine, Rhode Island, Massachusetts, New Jersey, Maryland, New York, New Mexico, New Hampshire, Washington, Oregon, Virginia, and District of Columbia at 60.6%.

The following 22 states have between 50% and 59.9% fully vaccinated: Colorado at 59.8%, California, Minnesota, Hawaii, Pennsylvania, Delaware, Florida, Wisconsin, Texas, Nebraska, Iowa, Illinois, Michigan, Kentucky, South Dakota, Arizona, Kansas, Nevada, Alaska, Utah, North Carolina and Ohio at 50.6%.

Next up (total population, fully vaccinated according to CDC) are Montana at 48.8%, Indiana at 48.7%, Missouri at 48.4% and Oklahoma at 48.1%.

Click on graph for larger image.

This graph shows the daily (columns) and 7 day average (line) of positive tests reported.