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Real retail sales continue (inexplicably) strong, still bode well for employment

1 day ago

Real retail sales continue (inexplicably) strong, still bode well for employment

This morning we got two important monthly September reports: industrial production and retail sales.

I have more to say about industrial production, and some general economic analysis about retail sales, which are pending at Seeking Alpha. I will post a link once that article goes up. UPDATE: Here’s the link: Link

For this blog, let’s focus on how real retail sales are likely to affect employment.

Just to start, here is are CPI adjusted retail sales. You can see that they have actually jumped once the Congressional stimulus kicked in, and have remained well ahead of pre-pandemic levels:

Figure 1

As I have said many times in the past, consumption slightly leads

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Jobless claims: only one week’s data, but cause for significant concern

5 days ago

Jobless claims: only one week’s data, but cause for significant concern

Today marked the biggest increase in new jobless claims in two months, and one of the two biggest increases since May, while the slightly lagging continuing claims continued to decline.
On a non-seasonally adjusted basis, new jobless claims rose by 76,670 to 885,885. After seasonal adjustment (which is far less important than usual at this time), claims rose by 53,000 to 898,000. The 4-week moving average also increased by 8,000 to 866,250:

Here is a close-up of the last four months highlighting the overall glacial progress in initial claims since the beginning of August:

Continuing claims declined on a non-adjusted basis declined by -1,188,202 to 9,631,790. With seasonal

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Coronavirus dashboard for October 14: winter is coming

6 days ago

Coronavirus dashboard for October 14: winter is coming

Total US confirmed cases: 7,806,805*
Average cases last 7 days: 51,038
Total US deaths: 215,887
Average deaths last 7 days: 714*Actual cases probably more like 14 million, or over 4% of the US populationSource: COVID Tracking ProjectToday let’s take a look at the most recent upsurge in COVID not just in the US, but in the entire West.Here is the 7 day average of new cases per capita in the US, Canada, and the 5 most populous countries in Europe:

Every single country, even Germany, is experiencing an upsurge. France, Spain, and the UK are having an even worse outbreak than the US.

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Consumer prices rise a “normal” 0.2% in September

6 days ago

Consumer prices rise a “normal” 0.2% in September

In September Consumer prices rose a “normal” 0.2%, the first such typical increase since the pandemic began (blue in the graph below):

For the past 40 years, recessions had typically happened when CPI less energy costs (red) had risen to close to or over 3%/year. We are nowhere near that now (last 15 years shown in graph):

Because wages are “stickier” than prices, typically as recessions beat down prices (or at least price increases), in real terms wages rise. That has been the case for the coronavirus recession as well:

As a result, as I’ve noted for the past several months, real hourly wages for non-supervisory workers have finally exceeded their previous 1973 peak:

Of course, this is

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College educational attainment by age demographic

9 days ago

College educational attainment by age demographic

There is no economic data today due to the Columbus Day observance.

So let me drop this graph of a metric I have been trying to find, of college educational attainment by age demographic, that I finally came across a couple of days ago:

It is commonplace that among Whites at least, support for Democrats is highly correlated by a college education. What is unclear is whether that is actually a function of education itself, or is simply confounded by age group.

The above graph shows are a steady rise in the percentage of both men and women with college degrees over the past 80 years. But we know that the strongest support for the GOP, and for Trump in particular, is in the age cohort of younger

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Coronavirus dashboard for October 9: everybody has to touch the hot stove at least once

10 days ago

Coronavirus dashboard for October 9: everybody has to touch the hot stove at least once

Total confirmed US infections: 7,605,218*
Average infections last 7 days: 46,869
Total US deaths: 212,762

*Actual number is probably 5 to 7 million higher, or about 4% of the total US population
Source: COVID Tracking Project

In the last 4 weeks, the average number of new infections has risen again. Here is the breakdown by regions:

Here is the same for deaths:

The early outbreak in the NYC metro area remains the single most deadly outbreak per capita by far. So here is the rate of deaths for the past 12 weeks:

The South and parts of the West, which were the epicenters of the second outbreak during the summer, have seen their numbers decline, while the

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August JOLTS report conforms to prior early recession recovery pattern

11 days ago

August JOLTS report conforms to prior early recession recovery pattern

Yesterday’s JOLTS report for August showed a jobs market that is still just beginning to mend. Hires were up, and layoffs and discharges were down, which is good, but job openings and voluntary quits both declined.
We are far enough along past the worst of the pandemic jobs losses that it is worthwhile to compare the state of the various JOLTS components with the 2 previous recoveries from recession bottoms in the series’ histories (this because the JOLTS data only dates from 2001.
In the two past recoveries:
first, layoffs declined
second, hiring rose
third, job openings rose and voluntary quits increased, close to simultaneously
Let’s examine each of those in turn. In each case, I

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Jobless claims: yet another week of glacial progress

12 days ago

Jobless claims: yet another week of glacial progress

Today marked yet another week of glacial progress in initial jobless claims, at levels worse than the worst weekly levels of the Great Recession.
On a non-seasonally adjusted basis, new jobless claims rose by 5,312 to 804,307. After seasonal adjustment (which is far less important than usual at this time), claims fell by 9,000 to 840,000, another new pandemic low. The 4-week moving average also  declined by 13,250 to a new pandemic low of 857,000:

Here is a close-up of the last two months highlighting the glacial progress in initial claims during the past 7 weeks:

Continuing claims declined on a non-adjusted basis declined by -1,010,280 to 10,612,021. With seasonal adjustment they declined by

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In 2020, the “Blue Wall” is holding

14 days ago

In 2020, the “Blue Wall” is holding

At 10 a.m. Eastern time we’ll get the JOLTS report for August. I plan on posting on that later today, but in the meantime here’s an update on the Midwest “Blue Wall” that failed in the 2016 election.

Below are the smoothed poll results for Michigan, Minnesota, Pennsylvania, and Wisconsin through yesterday:

Figure 1

Despite the wide margins in all 4 States, Nate Silver gives Trump an 11% chance of winning Michigan, plus 10% in Minnesota, and 17% in both Pennsylvania and Wisconsin.

What is remarkable about all 4 graphs is how *stable* the results have been for the past 4 months, particularly in Michigan and Wisconsin. Minnesota’s variability during the summer appears to be an artifact of very light state polling.

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2020 Presidential and Senate polling nowcast through October 3: a partial rebound for Biden

15 days ago

2020 Presidential and Senate polling nowcast through October 3: a partial rebound for Biden

Here is my weekly update on the 2020 elections, based on State rather than national polling in the past 30 days, since that directly reflects what is likely to happen in the Electoral College. Remember that polls are really only nowcasts, not forecasts. They are snapshots of the present; there is no guarantee they will be identical or nearly identical in early November.

A special reminder: these polls were all taken before Trump’s COVID-19 diagnosis, and only a few were entirely after the debate.
The best news for Trump, and the worst news for Biden, is that despite an awful debate performance, Trump’s approval *rose* 0.7% over the past week, while his

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September jobs report: a drastic slowdown in improvement, but further demonstrating an economy that *wants* to get better

17 days ago

September jobs report: a drastic slowdown in improvement, but further demonstrating an economy that *wants* to get better

HEADLINES:
661,000 million jobs gained. The gains since May total a little over half of the 22.1 million job losses in March and April. The alternate, and more volatile measure in the household report was 275,000 jobs gained, which factors into the unemployment and underemployment rates below.
U3 unemployment rate fell -0.5% from 8.4% to 7.9%, compared with the January low of 3.5%.
U6 underemployment rate fell -1.6% from 14.2% to 12.8%, compared with the January low of 6.9%.
[UPDATE: Correcting error] Those on temporary layoff decreased 1.523 million to 4.637 million.
Permanent job losers increased by 345,000 to 3.756 million.
July was

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Happy Every Economic Statistic in the World Day! 4. Manufacturing continued to expand strongly in September

18 days ago

Happy Every Economic Statistic in the World Day! 4. Manufacturing continued to expand strongly in September

This morning’s final economic report is the ISM manufacturing index for September.

This is a short leading indicator, and the new orders subindex specifically is one of the 10 components of the Index of Leading Indicators.

A neutral reading is 50. The overall index came in at 55.4, and the new orders subindex came in at 60.2:

So while the Index pulled back a little bit from August’s levels, it was still a very strong positive.

Again, this is evidence that the economy “wants” very much to expand smartly in the near future, if only the pandemic can be brought under control.

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Happy Every Economic Statistic in the World Day! 3. Private residential construction spending improves smartly

18 days ago

Happy Every Economic Statistic in the World Day! 3. Private residential construction spending improves smartly

This morning’s third economic release is August construction spending. I track this because it is part of the important long leading housing sector. While it isn’t nearly as leading as housing permits or starts, it is the least volatile of all of the data.

And the news was good, in particular for private residential construction spending, which increased by 3.7%:

Residential construction spending is only -0.6% below its February peak.

This is more confirmatory evidence that the economic *wants* to expand, and quite smartly, in 2021, if the pandemic is brought under control

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Happy Every Economic Statistic in the World Day! 1. Jobless claims continue making glacial progress

19 days ago

Happy Every Economic Statistic in the World Day! 1. Jobless claims continue making glacial progress

1. Jobless claims
Another week of glacial progress in initial jobless claims, at levels worse than the worst weekly levels of the Great Recession.
On a non-seasonally adjusted basis, new jobless claims fell by -40,263 to 786,942. After seasonal adjustment (which is far less important than usual at this time), claims fell by -36,000 to 837,000, another new pandemic low. The 4 week moving average also  declined by -11,750 to a new pandemic low of 867,250:

Continuing claims declined on a non-adjusted basis declined by -1,020,192 to 11,410,703. With the seasonal adjustment, they declined by -950,000 to 11,767,000. Both of these numbers are also new pandemic

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Coronavirus dashboard for September 30: a portrait of dismal societal failure

20 days ago

Coronavirus dashboard for September 30: a portrait of dismal societal failure

I hear the WWE staged a helluva mud wrestling cage match last night!

Since we won’t get any economic news until Every Statistic In The World is released tomorrow, in other, more uplifting news, let’s take the most updated look at coronavirus infections in the US.

Total US infections: 7,190,230
Average infections last 7 days: 42,045
Total US deaths: 205,986
Average deaths last 7 days: 743

Source: COVID Tracking Project

A number of weeks back, I looked at how each US State was doing by way of a color coding system based on the global history of the pandemic. Here’s the system:

Deep Red (general alarm out-of-control fire): 200+ infections per million, 5+ deaths per million.

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Monday political potpourri for a slow-starting Economic news week

21 days ago

Monday political potpourri for a slow-starting Economic news week

It’s a very slow most-of-the-week for economic data. Except for house prices, nothing much gets reported until Thursday, when a slew of data (personal income, spending, ISM manufacturing, construction, and jobless claims) all gets reported at once. And then Friday is the last jobs report before the election.

I’ll update the Coronavirus dashboard tomorrow or Wednesday. In the meantime, here are a few random notes for your Monday morning.

1. YouGov has now premiered their own election model, which gives Biden 351 Electoral votes as the median forecast. The model does not give probabilities.
https://mobile.twitter.com/YouGov

2. G. Elliott Morris makes an important point: the Trump tax

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A macro view of how the 2020 Presidential election differs from 2016

27 days ago

A macro view of how the 2020 Presidential election differs from 2016

This is a light week for economic data, so don’t be surprised if I take a break for a day or two.

In the meantime, I wanted to post a few graphs that I think give a good “macro” view of the Presidential election this year, and how it is different from 2016.

Aside from the fact that Trump now has a nearly 4 year record, and Presidential elections are usually a referendum on the incumbent President or party, the simple overriding fact is that Biden is viewed much more favorably, or perhaps much less *un*favorably, than Hillary Clinton was in 2016.

To refresh your memory, here are a couple of graphs showing how (dis)liked both Trump and Hillary Clinton were in 2016:

Both were

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The 2020 Presidential and Senate polling nowcast: shift in the control of the Senate to democrats looks increasingly likely

28 days ago

The 2020 Presidential and Senate polling nowcast: shift in the control of the Senate to democrats looks increasingly likely

Here is my weekly update on the 2020 elections, based on State rather than national polling in the past 30 days, since that directly reflects what is likely to happen in the Electoral College. Remember that polls are really only nowcasts, not forecasts. They are snapshots of the present; there is no guarantee they will be identical or nearly identical in early November.
Let’s begin with Trump’s approval. After several weeks of improvement, last week Trump’s approval eroded very slightly, and this week was virtually unchanged – and remains right in its normal range for the past 3 1/2 years:

It is safe to say that Trump’s

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2019: the year that the late economic expansion finally bore fruit for nearly all of society

September 21, 2020

2019: the year that the late economic expansion finally bore fruit for nearly all of society

Yesterday  (Sept. 16) the Census Bureau released its 2019 information concerning median household income and poverty rates. Unfortunately, this data is always released in September of the following year, so is already somewhat stale. Just for example, since the information is collected between February and April of the following year, we may not get complete information about the impact of the coronavirus until two years from now!

Also, since the information is across *all* households, not just wage- or salary-earning households, but includes, for example, retirees as well as the unemployed, it should not be used to infer information about wages.

That being

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Real retail sales gains join industrial production in sharp deceleration

September 18, 2020

Real retail sales gains join industrial production in sharp deceleration

Two days ago we saw that gains in industrial production had decelerated sharply in August. This morning we saw the same thing with real retail sales, one of my favorite indicators.

Nominal retail sales were up +0.6% in August. Meanwhile, July’s reading was revised downward by -0.3%. Since in July and August consumer inflation was up +0.6% and +0.4%, respectively, that means revised *real* retail sales rose +0.3% in July and +0.2% in August. This means that the net result over two months was lower than previously thought for the month of July alone.

Nevertheless real retails sales did establish a new record high, above any reading from before the pandemic:

Historically

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Industrial production improves in August, but with sharp deceleration

September 17, 2020

Industrial production improves in August, but with sharp deceleration

If the jobs report is the Queen of Coincident Indicators, industrial production is the King. It, more than any other metric, is found at the turning points where recessions both begin and end.

This morning’s report of industrial production for August shows that the recovery from the bottom of the coronavirus recession has come close to stalling out.

Overall industrial production grew by 0.4%, while July was revised higher by 0.5%. Manufacturing production grew just under 1.0%.  July was likewise revised higher by 0.6%. Here are the overall totals:

The good news is that manufacturing production has gained back almost 70% of its decline from March. Overall production has gained a

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Coronavirus dashboard for September 14: cases in the Midwest surge; the Northeast still lags Canada

September 16, 2020

Coronavirus dashboard for September 14: cases in the Midwest surge; the Northeast still lags Canada

Total US cases: 6,519,573
Average cases last 7 days: 34,744
Total US deaths: 194,071
Average deaths last 7 days: 733
 Source: COVID Tracking Project

I continue to expect the pandemic to wax and wane in relative terms at least until next January 20, as the public reaction in various States varies between panic and complacency.

Let’s start by comparing the rates of cases and deaths in the US with the North American standard – Canada:

In contrast with the US, Canada averaged 18 cases per day per million people in the last 7 days (vs. 105 for the US), and 0.1 deaths (vs. 2.2 for the US). That is what we could have as well if there were competent Federal

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The 2020 Presidential and Senate nowcast: the races congeal

September 16, 2020

The 2020 Presidential and Senate nowcast: the races congeal

Here is my weekly update on the 2020 elections, based on State rather than national polling in the past 30 days, since that directly reflects what is likely to happen in the Electoral College. Remember that polls are really only nowcasts, not forecasts. They are snapshots of the present; there is no guarantee they will be identical or nearly identical in early November.
Let’s begin with Trump’s approval. After several weeks of improvement, this week Trump’s approval eroded very slightly – but remains right in its normal range for the past 3 1/2 years:

It is safe to say that Trump’s post-convention, “law and order” bounce has plateaued (note there have not been any big BLM demonstrations in the

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Consumer inflation continues to accelerate YoY, but so far no big problem

September 13, 2020

Consumer inflation continues to accelerate YoY, but so far no big problem

The consumer price index for August was reported up +0.4% this morning. This is the third straight big increase. Below I show this plus the more stable consumer prices minus gas (red):

Here’s what the monthly changes look like over the past 10 years:

As you can see, these are at the upper end of monthly inflation increases for the past 10 years.

On a YoY basis, however, inflation is still pretty subdued at 1.3%. Inflation ex-gas is up 2.1%, well in the ordinary range for the past 20+ years:

As a result, real wages for non-supervisory employees, in historical terms, have finally surpassed their previous 1973 high:

Of course, this has everything to do with the fact

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Improvement in initial and continuing claims stalls out

September 11, 2020

Improvement in initial and continuing claims stalls out

This morning’s jobless claims report shows that the trend of “less worse” news has at least temporarily ended, at a level of about 150,000 higher than the worst weekly levels of the Great Recession.
On a non-seasonally adjusted basis, new jobless claims rose for the second week in a row, by 20,140 to 857,148. After seasonal adjustment (which is far less important than usual at this time), claims were unchanged at 884,000, tied for their “best” reading since the pandemic began. The 4-week moving average declined by 21,750 to a new pandemic low of 970,750:

Continuing claims, on both an unadjusted and seasonally adjusted basis rose from their pandemic lows of last week, by 54,472 to 13,197,059, and by

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Sorry, partisans in denial: swing State polls have tightened

September 10, 2020

Sorry, partisans in denial: swing State polls have tightened

It’s a slow economic news week, so let me follow up with some further information about movement in the polls. My usual caution: polls are *NOT* forecasts, just nowcasts estimating what would happen if the election were today.

In the past few days, there is further evidence that Trump’s “law and order” message has resonated with at least a small subset of presumably white, probably older, voters. Below are some graphs from Nate Silver’s site of a few swing and swing-ish States. Note his graphs take into account national, as well as State-specific polls, but the net result is typically within 1% of what my average of State-only polling shows.

There has been a considerable narrowing of the race

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The 2020 Presidential and Senate nowcast: Trump finds his issue

September 7, 2020

The 2020 Presidential and Senate nowcast: Trump finds his issue
Here is my weekly update on the 2020 elections, based on State rather than national polling in the past 30 days, since that directly reflects what is likely to happen in the Electoral College. Remember that polls are really only nowcasts, not forecasts. They are snapshots of the present; there is no guarantee they will be identical or nearly identical in early November.
I am afraid I have some bad news for those who think Trump did not have a convention bounce. In the past week, disapproval has eroded by 1.9% and approval has increased by 1.5%. Both of these have moved over 3% from their recent nadirs. I am sorry to tell you that Trump’s attacks on violent protests have been effective,

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Coronavirus dashboard for September 2: Trumpism still kills

September 5, 2020

Coronavirus dashboard for September 2: Trumpism still kills
Total US cases: 6,073,840
Cases, 7 day average: 42,304
Total US deaths: 184,604
Deaths, 7 day average: 888

Source: COVID Tracking Project

US cases by region:

US deaths by region:

Superficially, this looks somewhat promising, as both cases and deaths have declined. But note that cases have flattened in the past week or so without further declines. This is particularly of concern, because the number of *tests* administered *has* declined somewhat over the past few weeks, as shown in the graph below of tests vs. cases, for the total US

In the Northeast, testing has actually *increased,* without finding any more new cases (not shown). That’s good! But here are the other three regions

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August jobs report: continued slow incremental progress

September 4, 2020

August jobs report: continued slow incremental progress

HEADLINES:
1,371,000 million jobs gained. The gains since May total about 48% of the 22.1 million job losses in March and April. The alternate and more volatile measure in the household report was 3,756,000 jobs gained, which factors into the unemployment and underemployment rates below.
U3 unemployment rate fell -1.8% from 10.2% to 8.4%, compared with the January low of 3.5%.
U6 underemployment rate fell -2.3% from 16.5% to 14.2%, compared with the January low of 6.9%.
Those on temporary layoff decreased 3.1 million to 6.2 million.
Permanent job losers increased by 534,000 to 3.1 million.
June was revised downward by -10,000. July was also revised downward by -29,000 respectively, for a net loss of

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Initial and continuing claims: very slow “less worse” progress continues

September 4, 2020

Initial and continuing claims: very slow “less worse” progress continues

The continued good news in this Thursday morning’s jobless claims report is that the trend of “less worse” news is intact. But the improvement has slowed dramatically and is still at a level of about 150,000 higher than the worst weekly levels of the Great Recession.
On a non-seasonally adjusted basis, new jobless claims rose (slightly) by 7,591 from their pandemic low last week to 833,352. After seasonal adjustment (which is far less important than usual at this time), claims declined by 130,000 to 881,000, their “best” reading since the pandemic began. The 4-week moving average also declined to a new pandemic low of 991,750, its first reading under 1 million:

Continuing claims,

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