Archive for August 2020

If Congress and the President fail to reinstitute a federal top-up to the expired $600/week in enhanced unemployment benefits, by January GDP will decline by 1.25%, one million jobs will be lost, and the unemployment rate will rise by 0.75 percentage points. If the top-up is $300/week as per Trump’s recent and temporary executive order,…

The Friday File: Prior to Covid-19, the average percentage of out-of-stock items in stores and online at any given time was 6%. Today, 21% of household paper products are unavailable, 18% of household cleaners are not on the shelves, and 18% of canned vegetables are unobtainable. For carbonated beverages it is 15% and refrigerated meats…

Today, Fed Chairman Powell made two small but very significant policy changes. Historically, when the unemployment rate got too low, the Fed would preemptively raise rates to reduce potential inflationary pressures. Now, the Fed will let the rate fall until inflation becomes too high. Second, the 2% inflation target can now be overshot for some…

Postal Processing In 2005, the USPS handled 25 billion pieces of first-class mail and periodicals, and 25 billion pieces of marketing mail, which includes flyers, circulars, advertising, newsletters, bulletins, catalogs, and small parcels. Since then, first-class volume has fallen by 56% to 11 billion pieces. Marketing mail volume fell by 24% to about 19 billion…

Through 4/15/20, positive Covid-19 tests were 20% of all tests, but testing was very limited. From 4/15/20-6/15/20 as testing jumped from 150,000/day to 500,000/day the percentage of positives steadily declined to 4%. However, from mid-June through mid-July infection rates doubled to 8%, while tests/day steadily rose to 700,000. Since then, testing has flatlined but the…

Herculean Housing Homebuilder sentiment is at its highest level since 1998, starts are up 23.4% Y-o-Y, all-important single-family starts are up 7.4% Y-o-Y, and overall starts are up 4.7% YTD! At the current rate of 1.496 million, starts are nearing their best level in 14 years! Topping it off, existing sales are at their best…

The Friday File: Following an event-filled 2019/20 term for the Supreme Court, approval of the Court is at a decade high. Fully 58% of Americans approve of the job being done. The last time the Court was as highly regarded was 2009. Moreover, the support is across-the-board, with 60% of Republicans, 57% of independents, and…

20Q3 GDP growth estimates currently range from 10% to 25%. Importantly, GDP is reported at a seasonally adjusted annual rate (SAAR). If 20Q3 comes in at a SAAR of 15% (my best estimate) that’s equal to a quarterly rise of 3.6%. A SAAR of 25% means a quarterly rise of 5.7%. If the former, GDP…

F&F Fee Last week, the FHFA, Fannie Mae and Freddie Mac’s (F&F) regulator, introduced a fee only for borrowers refinancing a residential mortgage. The fee raised refi rates by 1/8th of a point. While the FHFA offered an inexplicable rationale for the fee, the real reason is the FHFA wants to privatize F&F and that…

First-time unemployment claims fell to 963,000 for the week ending 8/8/20, the first time they have been under a million in 20 weeks. Moreover, continuing claims declined to 15.5 million and like first-time claims have been steadily falling. Despite the steady falloff in first time claims, the improvement in continuing claims is slowing! Over the…