Written by rjs, MarketWatch 666
News posted last week about economic effects related to the coronavirus 2019-nCoV (aka SARS-CoV-2), which produces COVID-19 disease, has been surveyed and some articles are summarized here. We cover the latest economic data, especially GDP, the jobs report, banking oversight, mortgage delinquencies, local schools & universities, plus coronavirus relief (stimulus). The bulk of the news is from the U.S., with a few articles from overseas at the end. (Picture below is morning rush hour in downtown Chicago, 20 March 2020.) News items about epidemiology and other medical news for the virus are reported in a companion article.
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The Fed Appears to Have Put Its Finger on the Scale for Donald Trump on Friday – Pam Martens – The U.S. stock market, as measured by the Dow Jones Industrial Average, lost 1,833.97 points last week. The Dow was down every day except Thursday, when it eked out a gain of 139.16. The market was reacting to the following bad news: soaring cases of COVID-19 in the U.S.; a reemergence of the virus in Europe causing business shutdowns there; the failure of the U.S. Congress to pass a new stimulus bill; and a sharply lower price for West Texas Intermediate (WTI), domestic crude oil – which signals a further slowdown in economic activity. (At 7 a.m. this morning, WTI was down further, with a $34 handle.)The stock market’s losses would have likely been greater last week were it not for an intervention staged by the Federal Reserve at 11:00 a.m. on Friday. Here’s what happened and why Americans should be deeply concerned.The 200-day moving average on the Dow is watched by market technicians as an indicator of where the Dow is heading going forward. By 10:58 a.m. on Friday, the Dow had lost 502 points on the day and was trading at 26,156.45, below its 200-day moving average of 26,200.50.A break like that would typically escalate selling in the Dow as computer algorithms detect the break in the moving average and trigger sell orders.But at 11:00 a.m., the Federal Reserve stepped into the action by issuing a press releasethat gave an upbeat signal to the market. Since all of the Fed’s jawboning on the need for a new stimulus plan from Congress had failed to get legislation passed, the Fed’s press release indicated it was issuing its own version of a stimulus boost for small business. The Fed announced that its Main Street lending programs would be lowered from the current $250,000 minimum loan size to $100,000 – thus making many more small businesses eligible. The Fed’s news printed at the Reuters wire service at 11:07 a.m. and the market turned up. By the close of trading on Friday, the Dow had erased most of its earlier losses, closing down just -157.51. In addition to the fact that the Fed’s announcement came within minutes of the Dow dropping below its 200-day moving average, there are other noteworthy aspects to the Fed’s action. First, it has been the longstanding policy of the Fed to announce market-moving information before the market opens or after it closes. The major exception is the longstanding policy of the FOMC (Federal Open Market Committee) of the Fed to issue its statement at 2:00 p.m. on the second day of FOMC meetings, which occur every six weeks. The Fed’s intervention on Friday with an unanticipated policy change just as the market broke through a key technical indicator, and just three business days before a hotly-contested presidential election, sends the troubling signal that the Fed is putting its finger on the scale for the incumbent president, Donald Trump. Trump has linked himself to a rising stock market like no other president in history. He tweets about it and he campaigns about it. Even when Trump was in the hospital in early October with COVID-19, he sent out a Tweet stating: ” … remember that the Stock Market is getting ready to break its all time high.” It wouldn’t make the current president look too good if the market crashed while he’s still in control of the U.S. economy. But it’s not the job of the Fed to make Trump’s market prognostications a reality. The Fed is supposed to remain fiercely independent from politics and politicians so that Americans can trust that it is setting monetary policy on behalf of the American people. Jerome Powell, the current Fed Chairman, has failed miserably in that regard.
Fed Turns Attention to Asset Purchases After Spelling Out Low-Rate Pledges – WSJ — Federal Reserve officials at their meeting in September reinforced Chairman Jerome Powell’s statement that they weren’t even “thinking about thinking about raising interest rates.” By contrast, they offered little to guide expectations around their monthly purchases of $120 billion in Treasury and mortgage securities. Officials aren’t preparing to announce any changes after their two-day policy meeting ends Thursday but could begin reviewing contingency plans for possible refinements, according tointerviews and recent public statements.Recent surveys show a range of opinions about how long investors and economists expect the Fed to continue to buy assets at the current pace.More than half of large investment firms surveyed by the New York Fed in September expected the central bank to continue the current pace of bond buying into the first half of 2022. A separate survey of the banks that serve as the Fed’s counterparties on Wall Street shows those firms think the purchases could slow next year.Fed officials are unlikely to trim those purchases so long as the coronavirus pandemic is menacing the U.S. economy. This means they are likely to focus their discussions on how to provide more stimulus, if they decide it is needed, by shifting the composition of these purchases toward longer-dated Treasurys.They took one step in this direction in September by clarifying that these purchases were being conducted to support the economic recovery, after being initiated in March to quell market dysfunction.Fed policy in the past decade has been guided by the theory that holding long-term securities stimulates financial markets and the economy by holding down long-term interest rates. That is thought to drive investors into riskier assets like stocks and corporate bonds and encourage business investment and consumer spending. Holding short-term securities, this theory holds, provides little stimulus.The idea was at the core of former Chairman Ben Bernanke’s strategy to move the Fed’s holdings heavily into long-term Treasury bonds after the 2008 financial crisis. Fed estimates suggest the strategy lowered long-term interest rates by a full percentage point, making it less costly for millions of homeowners, car buyers, corporations and governments to borrow. Right now, the Fed is buying $80 billion in Treasurys a month and $40 billion in mortgage-backed securities, net of redemptions. This is larger than the $85 billion in monthly purchases during the Fed’s largest bond-buying program after the 2008 crisis – the third round of quantitative easing, or QE3, between 2012 and 2014.
FOMC Statement: No Change – Fed Chair Powell press conference video here starting at 2:30 PM ET. FOMC Statement: The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals. The COVID-19 pandemic is causing tremendous human and economic hardship across the United States and around the world. Economic activity and employment have continued to recover but remain well below their levels at the beginning of the year. Weaker demand and earlier declines in oil prices have been holding down consumer price inflation. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses. The path of the economy will depend significantly on the course of the virus. The ongoing public health crisis will continue to weigh on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer-term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. In addition, over coming months the Federal Reserve will increase its holdings of Treasury securities and agency mortgage-backed securities at least at the current pace to sustain smooth market functioning and help foster accommodative financial conditions, thereby supporting the flow of credit to households and businesses. In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
‘We will continue to do our jobs,’ Fed’s Powell vows as election drags on – Federal Reserve Chairman Jerome Powell explained the central bank’s thinking behind changes to its middle-market relief loan program, while attempting to assure the markets that the Fed’s mission is undeterred during a time of political uncertainty. Powell’s press conference Thursday, corresponding with a meeting of the Federal Open Market Committee, came days after the Fed announced it was cutting the minimum loan size to $100,000 for businesses in the Main Street Lending Program. The change, intended to boost participation in the coronavirus relief program, came despite Powell’s earlier resistance to the reduction. “We try to be responsive – we want qualifying businesses to be able to borrow, and we’ll see how much demand will come,” he said. Powell was also asked about any potential concerns about market turmoil or economic instability resulting from uncertainty about the presidential election. The election, held Tuesday, still has no winner, and potential legal challenges by the Trump administration to vote-counting efforts in key states have been accompanied by protests from supporters of both President Trump and Joe Biden. While declining to weigh in on the election, Powell said agencies like the Fed should remain focused on efforts to support the economy, which is still grappling with the coronavirus pandemic.”I’m very reluctant as you will imagine to comment on the election directly, indirectly, at all, other than just to say that it’s a good time to take a step back and let the institutions of our democracy do their jobs,” he said. “So, at the Fed here we will, as always, continue to do our jobs, everyday we’ll continue to serve the American people using our tools to support the economy during this difficult time.” As he has many times, Powell called for additional fiscal stimulus to ease the economic impact of COVID-19. Although Powell declined to say what elements of fiscal stimulus Congress should prioritize when considering a package, he emphasized that “a whole of government approach” with adequate fiscal policy, monetary policy and health care policy would lead to a swifter recovery. “I think we’ll have a stronger recovery if we can just get at least some more fiscal support when it’s appropriate,” he said. “Fiscal policy can do what we can’t, which is to replace lost incomes for people who are out of work through no fault of their own.” But the Fed is not out of ammunition, Powell said, adding that the central bank can support financial stability through its emergency lending programs and can support demand through its interest rate policy and asset purchases. “I think that we are strongly committed to using these powerful tools that we have to support the economy during this difficult time for as long as needed, and no one should have any doubt about that,” he said. Powell did not say if the Fed was currently in talks with the Treasury Department to extend the Dec. 31 sunset date approaching for most of the central bank’s emergency lending facilities. “We do think that the facilities have generally served their purpose as well, particularly in supporting the flow of credit [and] particularly acting as backstops to private markets, so overall we think that the programs that have gone well,” he said. However, the Main Street Lending Program, through which the Fed buys participation in loans made by banks to midsize firms, has struggled to attract interest. Among the several changes to then program announced last week, the minimum loan size was cut by more than half from $250,000 to make the program more available to smaller businesses. Businesses with up to 15,000 employees or up to $5 billion in annual revenue can now get loans of at least $100,000 through the $600 billion program. Powell was previously resistant to making such a change, telling Congress in September that “the current facility would not work for much smaller loans.”
Early Q4 GDP Forecasts —From Merrill Lynch: We expect growth to slow to 3% qoq saar in 4Q amid the stimulus stalemate. [Oct 30 estimate] From Goldman Sachs: We left our Q4 GDP tracking estimate unchanged at +4.5%. [Nov 3 estimate] From the NY Fed Nowcasting Report The New York Fed Staff Nowcast stands at 3.2% for 2020:Q4. [Oct 30 estimate]And from the Altanta Fed: GDPNowThe GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in thefourth quarter of 2020 is 3.4 percent on November 2, up from 2.2 percent on October 30. [Nov 2 estimate]I t is important to note that GDP is reported at a seasonally adjusted annual rate (SAAR). A 3.3% annualized increase in Q4 GDP, is about 0.8% QoQ, and would leave real GDP down about 2.7% from Q4 2019.The following graph illustrates this decline.
America’s Economy Faces a Winter Chill – WSJ – Covid cases are rising, cold weather is on its way and, for many American households and small businesses, financial resources are running out. The next few months could be tough.While the economy still isn’t close to a full recovery from the pandemic, it has rebounded impressively. Last Thursday, the Commerce Department reported that gross domestic product grew 7.4% in the third quarter from the prior quarter, and economists expect that the October employment report, due Friday, will show another month of job gains. The growing danger, however, is that the country is facing a set of challenges that could set it back on its heels. To begin with, there is the challenge that never left: Covid. After a period during the summer that suggested the virus might be coming under some semblance of control, it is extending its grip once again. The seven-day average of new cases in the U.S. has lately been hitting new highs, and the danger is that the combination of colder weather and family gatherings during the Thanksgiving and Christmas holidays will send cases higher still. As a result, more state and local officials could dial restrictions back up again, while many consumers might ratchet up their wariness. Rising Covid cases aren’t the only problem colder weather will bring. An analysis by small-business payroll and benefits provider Gusto finds that areas with average November temperatures below 50 degrees account for 45% of private-sector employment, and some of those jobs could soon be at risk. Restaurants all over have adapted to the pandemic by expanding outdoor dining, helping them recover some of their lost sales and hire back employees. In September, there were 3.8 million more people working at food services and drinking places than in April, according to the Labor Department, accounting for about a third of the recovery in the job market. But in most parts of the country, not many people will be keen to dine al fresco in the cold. That raises the risk that more restaurants will go under and more restaurant workers will lose their jobs. Other businesses, including retailers that made adjustments such as moving merchandise to the sidewalk, also could face cold-weather challenges. But the more-pressing problem for many small businesses, in particular, is that they are running out of time. Much of the money they received from the federal government earlier this year through the $669 billion Paycheck Protection Program has by now been exhausted. The patience of landlords, who typically have debt to service, is wearing thin. Many households are also running out of rope. Goldman Sachs economists note that surveys show 7% of households with mortgages and 41% with student loans were either making reduced payments or skipping them entirely at the start of this quarter. Student-loan forbearance under the $2 trillion stimulus plan passed last spring, and since extended by an executive order, expires at the end of December. Mortgage forbearance is set to expire either 180 or 360 days after being granted. Many renters are in especially difficult straits. In a recent Census Bureau survey, 10% said they had no confidence in their ability to make their next rent payment.Only when the Covid crisis ends will many businesses and households be pulled back from the brink.
Eight High Frequency Indicators for the Economy – These indicators are mostly for travel and entertainment – some of the sectors that will recover very slowly. The TSA is providing daily travel numbers. This data shows the seven day average of daily total traveler throughput from the TSA for 2019 (Blue) and 2020 (Red). The dashed line is the percent of last year for the seven day average. This data is as of Nov 1st. The seven day average is down 63% from last year (37% of last year). There has been a slow increase from the bottom. The second graph shows the 7 day average of the year-over-year change in diners as tabulated by OpenTable for the US and several selected cities. This data is updated through October 31, 2020. This data is “a sample of restaurants on the OpenTable network across all channels: online reservations, phone reservations, and walk-ins. For year-over-year comparisons by day, we compare to the same day of the week from the same week in the previous year.” Note that dining is generally turning down in the northern states – Illinois, Pennsylvania, and New York – but holding up in the southern states. This data shows domestic box office for each week (red) and the maximum and minimum for the previous four years. Data is from BoxOfficeMojo through October 92th. Note that the data is usually noisy week-to-week and depends on when blockbusters are released. Movie ticket sales have picked up slightly over the last couple of months, and were at $12 million last week (compared to usually around $150 million per week in the early Fall).This graph shows the seasonal pattern for the hotel occupancy rate using the four week average. This data is through October 24th. Hotel occupancy is currently down 31.7% year-over-year. This suggests no improvement over the last 6 weeks. So far there has been little business travel pickup that usually happens in the Fall. This graph, based on weekly data from the U.S. Energy Information Administration (EIA), shows gasoline supplied compared to the same week last year of . At one point, gasoline supplied was off almost 50% YoY. As of October 23rd, gasoline supplied was off about 12.7% YoY (about 87.3% of last year). This graph is from Apple mobility. From Apple: “This data is generated by counting the number of requests made to Apple Maps for directions in select countries/regions, sub-regions, and cities.” There is also some great data on mobility from the Dallas Fed Mobility and Engagement Index. This data is through October 31st for the United States and several selected cities. According to the Apple data directions requests, public transit in the 7 day average for the US is at 54% of the January level. It is at 44% in Chicago, and 57% in Houston – and declining slightly recently. Note: This graph is from Kastle, and the data isn’t available online to do a 7-day average. Here is some interesting data from Kastle Systems on office occupancy. This is just a screen shot. Here is the interactive data. This data is through October 28th. Currently Office Occupancy is 27% of normal, with a low of 15% in San Francisco, and a high of 41% in Dallas. Here is some interesting data on New York subway usage. This data is through Friday, October 30th.
Business Cycle Indicators, November 6 – Menzie Chinn – Meanwhile, back in the real economy, the employment decelerates. Here’s the current outlook, using some key indicators noted by theNBER’s Business Cycle Dating Committee (BCDC).Figure 1: Nonfarm payroll employment (dark blue), industrial production (red), Bloomberg consensus for industrial production as of 11/6 (light red square), personal income excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), and monthly GDP in Ch.2012$ (pink), all log normalized to 2020M02=0. Source: BLS, Federal Reserve, BEA, via FRED, Macroeconomic Advisers (11/2 release), NBER, Bloomberg, and author’s calculations. With this employment gain (at 637K above the Bloomberg consensus of 600K), NFP remains 6.6% below the NBER peak at 2020M02 (6.8% in log terms).
Stop the Uncertainty! – Menzie Chinn – The economic policy uncertainty, that is (With apologies to Susan Powter). Regardless of where you are on the econo-political spectrum, you should want economic policy uncertainty to be reduced. Remember all those conservative voices in the post-Global Financial Crisis saying policy uncertainty was slowing the economic recovery? Well, today is an opportunity to return considered, coherent, economic policymaking and trade negotiations.First, here’re two indices of policy uncertainty – US news based and the US trade component, both from Baker, Bloom and Davis.Figure 1: US Economic Policy Uncertainty index – news based (blue, left scale), and US Trade Policy Uncertainty categorical component index (tan, right scale). NBER recession dates denoted by light gray shading; most recent recession assumed to end April 2020. Orange denotes Trump administration; orange dashed line indicates election. Source. Policyuncertainty.com, accessed 11/3/2020. Over the Trump administration, excluding the Covid-19 pandemic period, Economic Policy Uncertainty (EPU) was 31% higher (log terms) than it was during the period 2006 onward. US Trade Policy Uncertainty was 210% higher.One effect of a reduced level of policy uncertainty would be a weaker dollar (given the dollar’s safe haven status); see this post for a statistically based explanation. Figure 2: US Economic Policy Uncertainty index – news based (blue, left scale), and real value of US dollar against broad basket of currencies (red, right log scale). NBER recession dates denoted by light gray shading; most recent recession assumed to end April 2020. Orange denotes Trump administration; orange dashed line indicates election. Source. Policyuncertainty.com, Federal Reserve Board vis FRED, accessed 11/3/2020.Obviously, not all policy uncertainty would disappear with a Trump eviction, especially if the Congress remains divided with the Senate in Republican hands. However, it is hard for me to see how policy uncertainty could be further elevated – or even remain at similar levels – relative to what we’ve seen over the past four years.Also … stop the policy insanity!
Treasury Dials Back Estimates for U.S. Borrowing as Stimulus Talks Stall – WSJ – The Treasury Department on Monday dialed back its estimates for government borrowing through the end of the year as negotiations over another large fiscal stimulus bill remain stalled. The Treasury estimated the government would borrow $617 billion from October through December, down from its $1.216 trillion estimate in early August. Senior Treasury officials said they continue to assume that Congress eventually will pass another economic-relief package with about $1 trillion in new spending – the same assumption they made in August – but that much of that borrowing would likely be pushed back to early 2021. Officials estimated net marketable borrowing from January through March would total $1.127 trillion. Meanwhile, borrowing from July through September was much less than expected – $454 billion, compared with $947 billion projected in August. All told, the government expects to issue about $1.1 trillion less in new debt during the second half of the year than anticipated in August. A senior Treasury official emphasized that estimates were subject to revision, given the high uncertainty over the size, shape and timing of another relief bill. After months of starting and stopping, talks between Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi (D., Calif.) over a roughly $2 trillion stimulus deal have stalled. The two sides remain far apart on the price tag and policy issues, including aid for states and cities and liability protections for businesses. Congress has authorized roughly $3.6 trillion in new spending since March to help combat the impacts of the pandemic, which brought the U.S. economy to a standstill earlier this year, triggering widespread business closures and layoffs. The combination of increased spending and weaker revenues has sent deficits soaring, prompting record borrowing that Republicans argue is unsustainable. Senate Republicans have resisted calls for another major economic-aid bill and instead have backed a $500 billion measure with targeted support for hard-hit industries.
The GOP’s debt boogieman is hurting families and derailing our recovery – Rep John Yarmuth – Senate Majority Leader Mitch McConnell. who famously saw no “urgency” for relief, has declared that there would be no vote on a relief package for the American people during the lame duck session of Congress.As a result, coronavirus cases will continue to break daily records, people will die, small businesses will close, workers will be laid off, Americans will go hungry, families will be evicted – more pain, more suffering and more loss.American families cannot wait any longer – and they never should have had to. The pieces were there: House Democrats passed a compromise version of the Heroes Act, a bill with a lower price tag to appease congressional Republicans but still packed with the critical investments we desperately need. Treasury Secretary Steve Mnuchin and Speaker Nancy Pelosi (D-Calif.) were hammering out details. The president called for a deal.So why did it fall apart? Because the needs of the American people simply aren’t on Republicans’ radar. With their full attention on the booming stock market and their sagging poll numbers, the administration and its allies didn’t fail to implement a national pandemic strategy – they refused. It didn’t address their priorities.The same is true about their opposition to financial relief.Debt and deficits are their boogiemen, but at best, they’re deeply flawed economic arguments, and at worst, deliberate deceptions to excuse turning their backs on the American people.Republicans often argue that government should be run like a business. But only asking about cost is a surefire recipe to run a business, and a country, into the ground. Questions of cost must come after questions of benefit, as well as an assessment of the price of not making an investment. For a restauranteur, borrowing $100,000 for a prime, new location is much different than for a new Humvee. But when it comes to addressing the needs of the American people, Republicans want you to believe shrewd investments and frivolous spending are the same.On the other hand, Republicans could not have cared less about deficits when they enacted the Trump administration’s crown jewel, the 2017 tax law, which sent revenue plummeting to record lows, and increased deficits by at least $1.9 trillion over 10 years. What kind of business willfully goes into debt in order to slash revenue?Still, their giant handout to billionaires wasn’t reckless because of the debt, but because the massive price tag offered no benefit to working families, infrastructure, future generations, security, or even the president’s illusive health care plan. It was just waste. Another gas-guzzling Humvee taking up space in the garage while millions of American families continued to go without. As chairman of the Budget Committee, I’ve emphasized that we need a much more evidence-based, contemporary understanding of debt, and I’m far from alone. Fed Chair Jerome Powell recently warned that the danger we face today is investing too little, not too much, and experts across the ideological spectrum agree that we have ample fiscal capacity to provide urgently needed economic support to our communities, foster an inclusive recovery, and rebuild a stronger economy than what we had before. In fact, the failure to invest now to achieve these goals poses amore severe risk to our economic and budget outlooks than the large amounts we must spend to get there.There is simply no sound economic reason not to provide the relief that is needed and to do it quickly. The reality is that with interest rates andinflation even lower today than before the pandemic, CBO projects we will spend less on debt service over the decade than it projected before the pandemic.
As the World Watches US Election, the Appeal of America is Diminished – A US presidential election always draws intense worldwide interest, in part due to the spectacle, but also because the leadership of the most powerful country in the world has a significant bearing on international affairs. It is also a moment of immense cultural power which magnifies America’s global significance.While political leaders and policy experts will watch the election through the prism of their strategic interests, most of the world will watch with a more nebulous sense that the fate of the world is somehow at stake. For better or worse, around the globe people tend to view the US through the figure of its president. This is certainly the case with Donald Trump, whose global celebrity has amplified feelings about the US.The 2020 election symbolically aligns with a paradigm shift in the world order, a disassembling of western and more particularly American dominance. What is at stake here is the idea of the US as the world’s leading nation, an idea that forcefully shaped “the American Century” and is now fast dissolving.Global perceptions of the US are regularly monitored by major polling organisations such as the Pew Research Center and Gallup. There are also myriad regional and national polls seeking information on the US’s reputation and influence. By almost all quantitative measures the US’s global standing has plummeted since the election of Trump and this downward spiral is more often than not associated with his leadership.A Pew study in September 2020 noted that the number of countries with a favourable view of the US is “as low as it has been at any point since the Center began polling on this topic nearly two decades ago.” The survey showed ratings of “confidence in the US president” ranging from a low of 9% in Belgium to a high of 25% in Japan. Several international polls link the decline in confidence in American leadership to Trump’s mishandling of the coronavirus pandemic, both nationally and internationally. Measuring such perceptions quantitatively has much room for error, but it’s hard to deny that the scale and consistency of these polls are indicators of the US’s maligned and depleted image and influence in the world today. The first presidential debate provoked shock and dismay in international news media. It was described as a “chaotic and virulent spectacle” (El Pais in Spain), as “mudwrestling” (The Times of India), as “a joke, a low point, a shame for the country”(Der Spiegel in Germany), as a “national humiliation for America” (The Guardian in the UK), and as evidence of the “recession of US influence, national power” (Global Times in China). Writing in the Irish Times in April, Fintan O’Toole observed:It is hard not to feel sorry for Americans … The country Trump promised to make great again has never in its history seemed so pitiful. Simon Kuper in the Financial Times made a similar observation in October, writing that “European attitudes to Americans are shifting from envy to compassion.”
Robocalls Told at Least 800,000 Swing State Residents to “Stay Home” on Election Day. The FBI Is Investigating. – ProPublica — More than 800,000 people with phone numbers tied to six presidential swing states have been targeted with automated phone calls on Tuesday suggesting they remain at home on Election Day, a tactic that has alarmed voters and has drawn the attention of the FBI, documents and interviews show. All told, more than 3 million calls were made to people across the country on Tuesday, instructing them to “stay safe and stay home,” according to data and call recordings provided by the firm TelTech, which owns the RoboKiller smartphone app. One message, only a few seconds long, delivers the message in a monotone, robotic voice. Government officials and voters interpreted the messages as potential voter suppression, though it’s not clear what the intent was since the messages apparently began last December, before the coronavirus pandemic. It is also not known who was behind the cryptic messaging campaign or whether it targeted people with particular party registrations or political leanings. Nor was it clear whether the calls had any effect on voters’ willingness to go to the polls. In many states, significant numbers of people have already voted by mail, making the apparent veiled threats irrelevant. Nonetheless, the robocall campaign added to a trove of tactics that could undermine Americans’ confidence in the election, from disinformation on social media to hacking attempts that could slow vote counting. Calls like it drew pushback from state officials, including New York Attorney General Letitia James, who tweeted Tuesday afternoon: “Attempts to hinder voters from casting ballots by spreading misinformation is illegal and will not be tolerated. That’s why I am actively investigating robocalls allegedly spreading disinformation.” The available data doesn’t show how many of the callers listened to the full message. Neither the recording provided by TelTech nor those heard by voters who spoke with ProPublica mentioned specific political candidates or even the election. But the messages were so ubiquitous that they prompted complaints from voters, as well as federal law enforcement officials. “Because it talks about safety, I thought, is this about COVID? But it doesn’t actually say anything about COVID,” said Mariah Montgomery, a Brooklyn nonprofit worker with a Los Angeles area code who received the phone call twice in one day last week. “It did seem potentially like voter disinformation or suppression, given the timing,” she said. A senior Department of Homeland Security official said Tuesday that the FBI was investigating. “Be mindful of people that are trying to intimidate you, undermine your confidence,” the official said, while cautioning that robocalls are a scourge during every election. The FBI said it was aware of the reports but declined to comment further.
Biden defeats Trump for White House, says ‘time to heal’ (AP) – Democrat Joe Biden defeated President Donald Trump to become the 46th president of the United States on Saturday, positioning himself to lead a nation gripped by a historic pandemic and a confluence of economic and social turmoil. His victory came after more than three days of uncertainty as election officials sorted through a surge of mail-in votes that delayed processing. Biden crossed the winning threshold of 270 Electoral College votes with a win in Pennsylvania. Trump refused to concede, threatening further legal action on ballot counting. Biden, 77, staked his candidacy less on any distinctive political ideology than on galvanizing a broad coalition of voters around the notion that Trump posed an existential threat to American democracy. The strategy proved effective, resulting in pivotal victories in Michigan and Wisconsin as well as Pennsylvania, onetime Democratic bastions that had flipped to Trump in 2016. Biden’s victory was a repudiation of Trump’s divisive leadership and the president-elect now inherits a deeply polarized nation grappling with foundational questions of racial justice and economic fairness while in the grips of a virus that has killed more than 236,000 Americans and reshaped the norms of everyday life. Biden, in a statement, declared it was time for the battered nation “to unite and to heal.” “With the campaign over, it’s time to put the anger and the harsh rhetoric behind us and come together as a nation,” he said. “There’s nothing we can’t do if we do it together.” Biden was on track to win the national popular vote by more than 4 million, a margin that could grow as ballots continue to be counted. Nonetheless, Trump was not giving up. Departing from longstanding democratic tradition and signaling a potentially turbulent transfer of power, he issued a combative statement saying his campaign would take unspecified legal actions. And he followed up with a bombastic, all-caps tweet in which he falsely declared, “I WON THE ELECTION, GOT 71,000,000 LEGAL VOTES.” Twitter immediately flagged it as misleading. Trump has pointed to delays in processing the vote in some states to allege with no evidence that there was fraud and to argue that his rival was trying to seize power – an extraordinary charge by a sitting president trying to sow doubt about a bedrock democratic process.
White House attacks Fauci for suggesting Trump does not take pandemic “seriously”On Saturday, the White House unloaded against Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, after the nation’s top infectious disease expert told the Washington Post that the US would surpass 100,000 new coronavirus cases a day and see rising death tolls unless there was an “abrupt change” in policy regarding the pandemic. Fauci spoke as the US recorded a new daily record of 100,000 cases on Friday, along with soaring hospitalizations that threaten to overwhelm the health care system. “We’re in for a whole lot of hurt,” Fauci told the newspaper. “It’s not a good situation. All the stars are aligned in the wrong place as you go into the fall and winter season, with people congregating at home indoors. You could not possibly be positioned more poorly.” Fauci directly criticized Trump’s chief adviser on the pandemic, Dr. Scott Atlas, who opposes mask wearing or any other measures to slow the virus. “I have real problems with that guy,” he said, adding that his approach to the pandemic “doesn’t make any sense.” Of White Chief of Staff Mark Meadows’ recent statement that the administration is not seeking to control the pandemic, Fauci said, “I tip my hat to him for admitting the strategy.” Fauci went on to compare the attitude of the Democratic Biden campaign favorably to Trump’s strident opposition to measures to contain the deadly virus. Biden, he said, “is taking it seriously from a public health perspective,” while Trump is “looking at it from a different perspective … the economy and reopening the country.” In fact, Biden and the Democrats, while paying lip service to the advice of scientists to take measures to slow the spread of the virus, support the essence of Trump’s “herd immunity” policy – forcing workers back into the factories and teachers and students back into the schools in order to fully resume the flow of profits to the corporations and banks. The Democrats voted nearly unanimously for the multitrillion-dollar bailout of the corporate-financial elite last March, while allowing minimal aid to the millions laid off in the pandemic to expire so as to increase pressure on workers to return to unsafe workplaces. Going forward, Biden proposes little more than encouraging people to wear masks.
Internal memo shows Birx contradicting Trump on pandemic: This is ‘most deadly phase’ yet – An internal memo from Deborah Birx that circulated among top officials in President Trump’s administration pokes holes in the his claim that the country is “rounding the corner” in the fight against the coronavirus and soon will have defeated it. “We are entering the most concerning and most deadly phase of this pandemic … leading to increasing mortality,” Birx said Monday in a memo reported by The Washington Post.. “This is not about lockdowns – It hasn’t been about lockdowns since March or April. It’s about an aggressive balanced approach that is not being implemented.” Trump has repeatedly attempted to reassure voters that his administration is helping the country “round the corner” and suggested the virus would soon disappear with or without a vaccine for widespread use. Birx, a member of the coronavirus task force led by Vice President Pence, has served as the nation’s top expert on COVID-19 data and appeared almost daily on television and during briefings with reporters during the pandemic’s early days. A top administration official told the Post that Birx has become increasingly frustrated by what she has characterized as feeling “ignored” by White House officials as she and others have warned against a potentially deadly second and third wave of the virus this fall and winter. The Monday memo specifically referenced Trump’s recent campaign rallies, many of which have involved little social distancing or mask-wearing by attendees. Late on Sunday, Trump, who downplayed the dangers of the virus in the spring before contracting it himself last month, encouraged a crowd of supporters who chanted for him to “fire Fauci.” Anthony Fauci is another leading member of the task force with whom Trump has publicly broken. “Don’t tell anybody, but let me wait until a little bit after the election,” Trump said of Fauci. “He’s a nice man, but he’s been wrong on a lot.” Birx’s memo reportedly insists on a “much more aggressive action from messaging, to testing, to surging personnel around the country before the crisis point.” For weeks, several states in the Upper Midwest and rural South have reported spikes in coronavirus cases, a trend public health officials attribute to loosened lockdown regulations and smaller family gatherings ahead of the holiday season. “This is about empowerment Americans with the knowledge and data for decision-making to prevent community spread and save lives,” the memo said.
After public appearance with no mask, Trump chief of staff tests positive for Covid – President Donald Trump’s chief of staff Mark Meadows has been diagnosed with the coronavirus as the nation sets daily records for confirmed cases for the pandemic. Two senior administration officials confirmed Friday that Meadows had tested positive for the virus, which has killed more than 236,000 Americans so far this year. They offered no details on when the chief of staff came down with the virus or his current condition. His diagnosis was first reported by Bloomberg News. One administration official said several other staffers had tested positive as well. Meadows traveled with Trump in the run-up to Election Day and last appeared in public early Wednesday morning without a mask as Trump falsely declared victory in the vote count. He had been one of the close aides around Trump when the president came down with the virus more than a month ago, but was tested daily and maintained his regular work schedule. It marked the latest case of the virus in the West Wing, coming not even two weeks after Marc Short, Vice President Mike Pence’s chief of staff, and other aides tests positive for the virus. Trump, first lady Melania Trump, and at least two dozen others tested positive for the virus in early October, after Trump held large gatherings of people not wearing face-masks, including the ceremony announcing the nomination of now-Justice Amy Coney Barrett to the Supreme Court. Trump has repeatedly said that the nation is “rounding the turn” on the pandemic, which was top of mind for voters in Tuesday’s election. COVID-19 cases in the U.S. have increased more than 50% in the past two weeks. According to an AP analysis of data from Johns Hopkins University, the 7-day rolling average for daily new cases rose from 61,166 on Oct. 22 to 94,625 on Nov. 5.
Houston billionaire charged with biggest tax evasion case in U.S. History, feds say -The feds didn’t mince words when they leveled charges against Houston billionaire Robert Brockman, who is accused of taking $2 billion through an elaborate scheme. Prosecutors call it the biggest case of tax evasion of its kind in American history against a single individual, according to the U.S. Justice Department. “Complexity will not hide crime from law enforcement,” U.S. Attorney Dave Anderson said at a Thursday press conference announcing the charges. “We will not hesitate to prosecute the smartest guys in the room.” Brockman, the CEO of a software company was charged in a 39-count indictment Thursday that includes charges of money laundering, conspiracy, wire fraud and tax evasion, according to the U.S. Justice Department. The extensive 42-page indictment unsealed Thursday morning states that Brockman created companies on the British Virgin Islands and allegedly used them to hide assets from the IRS. In the indictment, prosecutors allege that Brockman’s scheme was decades long, covering a 20-year period. The charges also include allegations that between 2008 and 2010, Brockman reportedly bilked investors out of nearly $68 million. The feds’ case against Brockman was further supported by another billionaire Robert F. Smith. According to prosecutors, Smith assisted Brockman in hiding his profits earned through Smith’s company Vista Equity Partners via offshore accounts. “No scheme is too complex or sophisticated for our investigators,” Chief of IRS Criminal Investigation Jim Lee said. “Those hiding income or assets offshore are encouraged to come forward and voluntarily disclose their holdings. According to the allegations in the indictment, Brockman’s scheme was comprised of a tangled web of offshore entities. Brockman allegedly directed untaxed capital gains income to secret bank accounts in Bermuda and Switzerland, according to the indictment. Prosecutors said that he created code words on encrypted emails in an attempt to hide his assets overseas. According to the indictment, Brockman’s code word was “Permit,” and the IRS was called “the house.” He assigned others certain names with fish-themed code names, including “Redfish,” “King,” “Bonefish,” “Snapper, or “Steelhead.”
More gridlock, new tax threats loom after election – After historic spending in support of more than 400 congressional candidates, credit unions finds themselves in much the same position as it was before the election. A host of industry priorities stalled in the months leading up to the election, and partisan gridlock is not expected to lessen once a new Congress is sworn in. Because of this, credit unions could have a slim chance of advancing the most pressing items on their agenda. That includes a new economic stimulus package, which features additional changes to the National Credit Union Administration’s Central Liquidity Facility and troubled debt restructuring. There is also a chance that lawmakers will look for new funding opportunities to offset the recent heavy spending meant to temper the economic fallout from the coronavirus. That could endanger the industry’s tax-exempt status, industry sources said on Wednesday. Given how much state and federal governments have spent in response to the pandemic and with more spending likely to come, “it would be reasonable to expect … that there is going to be a close look at revenue generation at the federal level and certainly at the state level, and that’s going to put tax expenditures under significant scrutiny,” Ryan Donovan, chief advocacy officer at the Credit Union National Association, said during a Wednesday morning press call. Trade groups for banks and credit unions frequently raise the issue of the tax exemption, but those moves are often more about rallying their members than any actual threats to the industry. The only time in the last decade there was serious discussion of rethinking CUs’ tax status came in 2018 when outgoing Senate Finance Committee Chairman Orrin Hatch suggested the industry had evolved beyond its tax exemption, though little came of that. “I do think the conditions that exist now certainly lend more toward taking a look at lots of different funding mechanisms, so [tax status] is something that is a concern,” said Carrie Hunt, EVP and general counsel at the National Association of Federally-Insured Credit Unions. “We’ll have to see over the next couple of weeks what happens with all of these various elections and what the eventual leadership agenda looks like.” The White House will also set the tone for those discussions, many said, noting that a Biden presidency grappling with a Republican-controlled Senate would face significant obstacles on any tax reform.
Partisan gridlock appears intact. Why that’s good for banks – – As the nation awaited the conclusion of a bitter 2020 election, the fears among bankers of a “blue wave” bringing new regulations and higher taxes quickly dissipated. With Joe Biden on the verge of winning the presidential election, Republicans appeared close to keeping their Senate majority, although the outcome in two Georgia races could ultimately determine which party controls the upper chamber. With divided government a likelier prospect than before the election, when many pollsters were predicting a Democratic sweep, bankers and other analysts sounded increasingly confident that the industry dodged a bullet. Two-party control of Washington “serves as a backstop” to prevent “some of the most extreme progressive legislation coming over from the House of Representatives that we witnessed over the last two years,” said Richard Hunt, president and CEO of the Consumer Bankers Association. The final count in the Senate was still uncertain late Friday. The race in North Carolina was not yet decided, although Sen. Thom Tillis, R-N.C., appeared close to reelection. Meanwhile, both Senate races in Georgia appeared headed for runoffs Jan. 5 to determine the winners. If Tillis can hold on and the GOP can win one of the two seats in Georgia, banks will likely be able to fend off progressive legislative proposals to cap interest rates on credit cards, break up “too big to fail” institutions, create a postal banking system, and establish a public credit reporting agency. It also means that potential Biden picks for cabinet and regulatory positions would need approval from GOP senators. Ideas such as a “cap on interest rates, a [national] consumer credit reporting bureau, [and] breaking up the big banks” can “rest in peace,” Hunt said. But divided government could have some negative consequences for banks. The industry’s two main legislative priorities – making it easier for banks to serve cannabis businesses and easing anti-money-laundering requirements – were both backed by the Democratic House and face opposition from GOP senators. J.W. Verret, an assistant professor of law at George Mason University, said legislative gridlock between House Democrats and Senate Republicans that started after the 2018 midterm elections will likely continue.
MBA Survey: “Share of Mortgage Loans in Forbearance Decreases to 5.83%” -Note: This is as of October 25th. From the MBA: Share of Mortgage Loans in Forbearance Decreases to 5.83% The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 7 basis points from 5.90% of servicers’ portfolio volume in the prior week to 5.83% as of October 25, 2020. According to MBA’s estimate, 2.9 million homeowners are in forbearance plans….”With more borrowers exiting forbearance in the prior week, the share of loans in forbearance declined across all loan types. Almost half of forbearance exits to date have been from borrowers who remained current while in forbearance, or who were reinstated by paying back past-due amounts,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “The share of loans in forbearance has returned to levels last seen in early April, but it still remains remarkably high. Further improvement will require ongoing recovery in the job market, as well as additional fiscal stimulus.”…By stage, 23.95% of total loans in forbearance are in the initial forbearance plan stage, while 74.49% are in a forbearance extension. The remaining 1.56% are forbearance re-entries.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 (#) decreased relative to the prior week: from 0.11% to 0.10%.” There hasn’t been a pickup in forbearance activity related to the end of the extra unemployment benefits, but improvement might have slowed.
Black Knight: Number of Homeowners in COVID-19-Related Forbearance Plans Decreased –Note: Both Black Knight and the MBA (Mortgage Bankers Association) are putting out weekly estimates of mortgages in forbearance. This data is as of November 3rd. From Black Knight: Forbearance Fall 5% After Slight Increase After last week’s slight increase, the latest data from Black Knight’s McDash Flash Forbearance Tracker shows that nationwide forbearance volumes have fallen by 152,000 (-5%) since last Tuesday, driven by October forbearance expiration activity. This was roughly what was expected for the first week of the month, though we will be on the lookout for further potential drops, given the remaining scheduled expirations. With some 161,000 active forbearance plans having expired at the end of October, additional extension and/or removal activity could be seen in coming days….As of Nov. 3, there are 2.9 million active forbearance plans, representing some 5.4% of mortgage-holders, down from 5.7% last week and the lowest we’ve seen since mid-April during the onset of the pandemic. Together, they represent $584 billion in unpaid principal.There were 87,000 starts over the past week, the largest volume since April, but 57% of these were repeat starts for borrowers who had previously been in forbearance, left their plans, and have since returned. These forbearance starts and restarts are worth watching, as we see them trending upward. It may well be that this is still due to the drop in early October, but given the rising trend, they warrant a close eye.
Black Knight Mortgage Monitor for September: “2020 Originations Will Surpass $4 Trillion for First Time Ever” — Black Knight released their Mortgage Monitor report for September today. According to Black Knight, 6.66% of mortgages were delinquent in September, down from 6.88% in August, and up from 3.53% in September 2019. Black Knight also reported that 0.34% of mortgages were in the foreclosure process, down from 0.48% a year ago.This gives a total of 7.00% delinquent or in foreclosure. Press Release: Rate Lock Data Suggests 2020 Originations Will Surpass $4 Trillion for First Time Ever; Q3 Originations Likely to Set New Quarterly Records: This month, the company looked into rate lock data – historically a good indicator of lending activity – and found that Q3 2020 mortgage originations are set to break quarterly records in terms of refinance, purchase and total lending volumes, the data and market conditions also suggest that origination volumes could remain elevated into November and beyond.”Rate lock data from Black Knight’s Compass Analytics division shows that Q3 2020 mortgage originations are on track to break quarterly records across the board and remain strong moving into Q4,” said Graboske. “This suggests that origination and prepayment activity will likely remain elevated well into Q4 2020. September lock activity held relatively level with August, but through October 19, lock activity overall is up 4% from the month prior – with purchase locks up 6% and refinance locks up 3% thus far. Interest rates setting new record lows in mid- and late October will likely continue to fuel lock activity in coming weeks. “Assuming a 45-day lock-to-close period, not only could Q3 2020 set quarterly records for refinance, purchase and total origination volumes alike, but that volume could remain at or near peak levels through November 2020 – if not longer. Estimated origination volumes based on underlying locks suggest both Q3 refinance and total originations could be up 25% or more from Q2 while purchase lending could be up by 35% or more. This would push 2020 purchase lending to the highest level since 2005 and both refinance lending and total origination volumes to their highest levels ever. Indeed, total lending in 2020 is well on its way to easily eclipse the $4 trillion mark for the first time in history.” Here is a graph from the Mortgage Monitor that shows the status of loans that have left forbearance by loan product. From Black Knight:Not only have forbearance take-up rates varied widely by loan product, but the rate at which borrowers are leaving such plans has varied greatly as well
The GSEs have seen the highest removal rates, with 57% of borrowers having left their plans, 42% now re-performing on their loans and another 10% having paid off their loans in full
VA loans show an even higher payoff rate at 11%, but only 21% of VA borrowers are re-performing and only 46% have left their plans
Similarly, 45% of FHA borrowers have left forbearance plans, while 27% are re-performing and only 6% have paid off their mortgages in full.
There is much more in the mortgage monitor – especially related to forbearance.
MBA: Mortgage Applications Increase in Latest Weekly Survey From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey: Mortgage applications increased 3.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 30, 2020. … The Refinance Index increased 6 percent from the previous week and was 88 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 25 percent higher than the same week one year ago. “Mortgage rates continue to hover at record lows this fall. The 30-year fixed mortgage rate remained essentially unchanged at 3.01 percent last week, but rates for 15-year fixed-rate loans, FHA loans and jumbo loans all fell to new MBA survey lows,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The drop in rates spurred an uptick in demand for refinances. Activity increased over 6 percent, with borrowers notably seeking conventional and government loans. After a solid stretch of purchase applications growth, activity decreased for the fifth time in six weeks, but was still over 25 percent higher than a year ago, and has increased year-over-year for six straight months. 2020 continues to overall be a strong year for the housing market.” … The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 3.01 percent from 3.00 percent, with points increasing to 0.38 from 0.35 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The first graph shows the refinance index since 1990. The refinance index has been very volatile recently depending on rates and liquidity. But with record low rates, the index remains up significantly from last year.
CoreLogic: House Prices up 6.7% Year-over-year in September – Notes: The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA). From CoreLogic: Powering Up in 2020: Annual U.S. Home Price Appreciation Jumped to Six-Year High in September, CoreLogic Reports CoreLogic … today released the CoreLogic Home Price Index (HPI) and HPI Forecast for September 2020. Nationally, home prices increased 6.7% in September 2020, compared with September 2019, marking the fastest annual acceleration since May 2014. On a month-over-month basis, home prices increased by 1.1% compared to August 2020. Home-purchase demand maintained pace in the late summer compared to previous years, as record-low mortgage rates continue to motivate prospective homebuyers, including first-time buyers and homeowners looking to trade-up or invest in a second home. However, according to the National Association of Realtors and U.S. Census Bureau, the national supply of homes for sale fell to the lowest recorded level in September at 40% of that seen in September 2008 and 75% of that seen in September 2000. This severe inventory shortage has intensified upward pressure on home price appreciation as consumers compete for the limited number of homes on the market. “Housing continues to be a bright spot during an otherwise challenging economic time for many U.S. households,” said Frank Martell, president and CEO of CoreLogic. “Those in sectors that weathered the transition to remote work successfully are now able to take advantage of low mortgage rates to purchase a home for the first time or to trade-up to a larger home.” “COVID has contributed to the acute shortage of inventory as the pace of new construction slowed and older prospective sellers postponed listing their homes until after the pandemic,” said Dr. Frank Nothaft, chief economist at CoreLogic. “Once the pandemic passes or a vaccine is widely administered, we should see a noticeable pick-up in for-sale homes. And if the economy’s recovery is sluggish next year, distressed sales may also add to market inventory.”
The Other Eviction Moratorium: Storefront and Office Tenants are Hanging on. But for How Long? – Yves here. I was surprised when I went to New York to see that there wasn’t much of an increase in shuttered storefronts compared to the old normal (and there were a lot due to landlords putting through aggressive rent increases starting 3-4 years back). I have to confess that I didn’t know that there was an eviction freeze for commercial tenants too. The article below has some data on the lease renegotiations for restaurants. Notice most are holding their ground.Here in Alabama, there are even fewer store closures, when you’d expect to see a marked increase due to the stresses on venues like restaurants and salons. But those shoes may be starting to drop. But the press has also reported that bankruptcies of smaller businesses are also very low. Apparently the various support programs allowed for many proprietors to wind up their operations rather than hit the wall and suffer eviction.The piece gives a very informative look at the overall storefront commercial rent picture, and highlights the way landlords often refuse to lower rents and will keep retail space vacant. I saw this on Third and Madison Avenue, where departing tenants and other informed people would tell me the landlord doubled the rent, and the property would be vacant more than half the time in the next two-three years, clearly a net losing proposition. Yet landlords refuse to budge. Given that behavior, a vacancy tax for vacancies beyond a reasonable lease-up period seems warranted. The city needs to have people working, and as Richard Murphy says, landlords above all should be taking Covid hits. From a recent post: The key issue that the government has to decide upon is who will bear the economic consequences of what is to happen. I have already indicated in my first post on this issue that I think that the consequences of this epidemic will fall upon three clearly identifiable groups, which are individuals, businesses and government. However, when appraising who will bear the cost the criteria are slightly different … But that is not to say that there are no costs to an epidemic: clearly there are. In that case the question has to be asked as to who should bear that cost. There are three groups who should. Firstly, landlords should. I have already suggested that should the epidemic spread then as a matter of statutory right any tenant should be provided with a minimum three-month rent-free period to ease the stress upon them whilst this crisis last. I would suggest that the grant of that extension should be automatic to anyone who does not make a due payment of rent on the required date during the period of the epidemic. They should be automatically granted this extension by the landlord without having to make any further application or to complete any additional paperwork.
A Lot Of People Are Leaving – COVID Shutdowns Have Turned San Francisco Into A Ghost Town – San Francisco has managed to curb the virus slightly in its city – but at what cost? Those paying sky high taxes to live in the Bay Area may soon be wondering why they are paying to live in a shut down city that state and local government officials have refused to allow to reopen due to a virus with a CDC-predicted infection fatality rate of between 0.00002 and 0.093. The entire downtown area of the city, once vibrant with business and tourism, is now “empty” according to a new report by AP. Everything from food trucks to local workers used to be sights one would see on a daily basis in San Francisco. Now, the city has been all but abandoned. Even the tech giants that San Francisco is known for have left the city, in favor of working remotely from elsewhere. Families have moved out of the city in favor of the suburbs. Rents in the city are crashing, as we highlighted about a month ago. Tourists, once part of the lifeblood of the city, are now “scarce”. As a result, business owners wonder if the city will ever get back to normal. Evan Kidera, CEO of Senor Sisig food trucks, said: “Is it ever going to get back to normal, is it ever going to be as busy as it was – and will that be next year, or in 10 years?”This past week, part of the city re-opened as a result of virus numbers slowing. We’re sure it won’t be long until case numbers freak out elected officials heading into the winter, however, and everything is once again put into draconian “the government knows what’s best for you”-style lockdown. San Francisco first announced its residents should stay at home in March, leading to just 12,200 virus cases and 145 deaths among 900,000 residents since then. It is one of the lowest death rates in the country. Long Beach, which is about half the size, has had about 900 more cases and 100 more deaths.But at the same time, the city has been crippled, with many residents leaving. And many are unsure whether or not the slight re-opening will do much to re-populate the city. One tech executive, who moved out of his $4,000/month apartment last week, told AP: “San Francisco can say, ‘Hey, it’s cool to open back up.’ But what’s changed? The virus is still there, and there’s no vaccine.” He said of the move with his partner: “We’re both extreme extroverts, so the working from home thing makes us miserable.” They packed up their things and drove to an Airbnb in San Diego, instead, and are planning on making trips around the country. 30 year old Deme Peterson, another former San Francisco resident, said: “The spark of living in the city just kind of burned out a bit with everything being closed. We kind of didn’t see when it would come back to normal.” Many restaurants in the city have already closed permanently. Many others are on the brink.
Smaller American cities see big interest from urban flight – Now that more Americans can work and attend school from anywhere, they are increasingly looking to leave large urban centers for smaller, less dense cities with cheaper housing. As different real estate entities try to measure the migration, certain cities are standout destinations. Santa Barbara, California; Louisville, Kentucky; and Buffalo, New York, are seeing big net inflows. This is the number of people looking to move in minus the number of people looking to leave, according to a study of online home search results by Redfin. Santa Barbara’s net inflow increased by 124% in the third quarter compared with the same period a year earlier. Louisville saw a 113% increase, and Buffalo a 107% gain. “Remote work has opened up a whole new world of possibilities when it comes to buying a home,” said Redfin’s chief economist, Daryl Fairweather. “Many residents of expensive areas like New York or Los Angeles couldn’t manage to afford rent and save for a home at the same time. So it’s no wonder that these folks are looking to buy homes in much more affordable places like Louisville and Little Rock.” Redfin’s top 10 list includes El Paso, Texas; Burlington, Vermont; and Tulsa, Oklahoma. Tulsa has a program, Tulsa Remote, which actually pays people to move to the city and work remotely. Most of the destination cities have relatively low housing costs compared with larger metropolitan areas. Santa Barbara is the exception. Its draw is that it is less dense than Los Angeles but close enough to commute if necessary. Looking at the larger state picture, Florida appears to be the biggest recipient of flight from New York. Nearly twice as many Redfin searchers as last year, or 22,000 more, looked to move into Florida than out in the third quarter. That is the highest net inflow since Redfin began tracking migration three years ago. Florida, Texas, Tennessee, North Carolina and Nevada saw the biggest net inflow increases since last year. Another analysis from moveBuddha, a moving company search site, found the top three larger cities people were moving into in 2020 were Denver, Austin, Texas and Portland, Oregon. Seattle had been in the top three in 2019 but dropped far down the list, likely due to high prices and its high rate of Covid-19 early on. The top cities people moved out of: New York, San Francisco and Chicago.
October Vehicles Sales decreased to 16.2 Million SAAR – The BEA released their estimate of light vehicle sales for October this morning. The BEA estimates sales of 16.21 million SAAR in October 2020 (Seasonally Adjusted Annual Rate), down 0.5% from the September sales rate, and down 3.3% from October 2019. This was below the consensus estimate of 16.5 million SAAR. This graph shows light vehicle sales since 2006 from the BEA (blue) and the BEA’s estimate for October (red). The impact of COVID-19 was significant, and April was the worst month.Since April, sales have increased, but are still down 3.3% from last 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 16.21 million SAAR. Sales-to-date are down 17.3% in 2020 compared to the same period in 2019. In 2019, there were 14.48 million light vehicle sales through October. In 2020, there have been 11.97 million sales.
U.S. wholesale inventories revised higher in September (Reuters) – U.S. wholesale inventories were higher than initially estimated in September as sales barely rose, government data showed on Friday. The Commerce Department said wholesale inventories gained 0.4% in September, instead of dipping 0.1% as estimated last month. Stocks at wholesalers increased 0.5% in August. The component of wholesale inventories that goes into the calculation of gross domestic product rose 0.4% in September. Inventories were down 3.9% in September from a year earlier. Gross domestic product rebounded at a historic 33.1% annualized growth rate in the third quarter. That followed a 31.4% rate of contraction in the second quarter, the deepest since the government started keeping records in 1947. Inventories contributed to GDP growth last quarter after being a drag for five straight quarters. Stocks of motor vehicles and parts fell 0.3% in September. Sales at wholesalers edged up 0.1% in September after increasing 1.2% in August. At September’s sales pace it would take wholesalers 1.31 months to clear shelves, unchanged from August.
AAR: October Rail Carloads down 6.6% YoY, Intermodal Up 10.0% YoY — From the Association of American Railroads (AAR) Rail Time Indicators. Back in April 2020, when the U.S. economy was basically in a coma, U.S. intermodal originations averaged 219,085 units per week. That was the fewest for any month in more than seven years and the fewest for April in ten years. Back then, no one would have thought that six months later, in October 2020, U.S. railroads would have their best intermodal month in history. Yet that’s where we are: U.S. railroads originated an average of 292,469 containers and trailers per week in October 2020, more than ever before and up a stunning 33.5% over April 2020. This graph from the Rail Time Indicators report shows the six week average of U.S. Carloads in 2018, 2019 and 2020: Total U.S. carloads are trending higher, but at a much slower pace than in July and August. U.S. railroads originated an average of 228,193 total carloads per week in October 2020, the most since February 2020 but down 6.6% from October 2019. The 6.6% year-over-year decline is the smallest since the pandemic began. For the first 10 months of 2020, total carloads were 9.48 million, down 14.5% (1.61 million carloads) from the first 10 months of 2019. The second graph shows the six week average of U.S. intermodal in 2018, 2019 and 2020: (using intermodal or shipping containers): In the 31 years from 1989 to 2019, October was the top U.S. rail intermodal month (in terms of average weekly originations) 25 times. This year will make 26. In October 2020, U.S. railroads originated an average of 292,469 containers and trailers per week, up 10.0% over October 2019 and the highest weekly average for any month in history. (The previous record was 289,994 in June 2018.) The weekly average in October 2020 was 33.5% higher than in April 2020, when they averaged just 219,085 units. That’s the biggest six-month gain in history. Few would have expected that six months ago. Note that rail traffic was weak prior to the pandemic, and intermodal has come back strong.
Trade Deficit Decreased to $63.9 Billion in September – 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 $63.9 billion in September, down $3.2 billion from $67.0 billion in August, revised. September exports were $176.4 billion, $4.4 billion more than August exports. September imports were $240.2 billion, $1.2 billion more than August imports.Both exports and imports increased in September. Exports are down 16% compared to September 2019; imports are down 6.5% compared to September 2019. Both imports and exports decreased sharply due to COVID-19, and have now bounced back (imports 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 $37.59 per barrel in September, up from $37.43 per barrel in August, and down from $53.10 in September 2019. The trade deficit with China decreased to $29.7 billion in September, from $31.6 billion in September 2019.
U.S. factory orders rise solidly; outlook uncertain (Reuters) – New orders for U.S.-made goods increased solidly in September, but further gains could be limited amid an anticipated slowdown in consumer spending as government money for businesses and workers impacted by the COVID-19 pandemic runs out. The Commerce Department said on Tuesday that factory orders rose 1.1% after climbing 0.6% in August. Orders were boosted by increased demand for primary metals, computers and electronic products as well as motor vehicles and fabricated metal products. But orders for machinery, furniture and electrical equipment, appliances and components fell. Economists polled by Reuters had forecast factory orders would rise 1.0% in September. Manufacturing, which accounts for 11.3% of U.S. economic activity, has been boosted by a shift in spending from services toward goods as Americans set up home offices and remote classrooms and avoid public transportation because of the coronavirus. A survey on Monday from the Institute for Supply Management on Monday showed its measure of national factory activity raced to its highest level in nearly two years in October, with new orders surging to their highest level in almost 17 years. But the strong manufacturing sentiment likely overstates the health of the sector. A report from the Federal Reserve last month showed production at factories dropped 0.3% in September and remained 6.4% below its pre-pandemic level. Unfilled orders at factories fell 0.2% in September after declining 0.6% in August. Inventories at factories were unchanged for a second straight month, while shipments of manufactured goods rose 0.3%. The government also reported that orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, increased 1.0% in September, as reported last month. Shipments of core capital goods, which are used to calculate business equipment spending in the GDP report, rose 0.5%. They were previously reported to have gained 0.3%. Business spending on equipment rebounded at a 70.1% rate in the third quarter, ending five straight quarters of decline.
ISM Manufacturing index Increased to 59.3 in October –The ISM manufacturing index indicated expansion in October. The PMI was at 59.3% in October, up from 55.4% in September. The employment index was at 53.2%, up from 49.6% last month, and the new orders index was at 67.9%, up from 60.2%. From ISM: Manufacturing PMI at 59.3%; October 2020 Manufacturing ISM Report On Business “The October Manufacturing PMI registered 59.3 percent, up 3.9 percentage points from the September reading of 55.4 percent and the highest since September 2018 (59.3 percent). This figure indicates expansion in the overall economy for the sixth month in a row after a contraction in April, which ended a period of 131 consecutive months of growth. The New Orders Index registered 67.9 percent, an increase of 7.7 percentage points from the September reading of 60.2 percent. The Production Index registered 63 percent, an increase of 2 percentage points compared to the September reading of 61 percent. The Backlog of Orders Index registered 55.7 percent, 0.5 percentage point higher compared to the September reading of 55.2 percent. TheEmployment Index registered 53.2 percent, an increase of 3.6 percentage points from the September reading of 49.6 percent. The Supplier Deliveries Index registered 60.5 percent, up 1.5 percentage points from the September figure of 59 percent. The Inventories Index registered 51.9 percent; 4.8 percentage points higher than the September reading of 47.1 percent. The Prices Index registered 65.5 percent, up 2.7 percentage points compared to the September reading of 62.8 percent. The New Export Orders Index registered 55.7 percent; an increase of 1.4 percentage points compared to the September reading of 54.3 percent. The Imports Index registered 58.1 percent, a 4.1-percentage point increase from the September reading of 54 percent. Here is a long term graph of the ISM manufacturing index. This was above expectations and the employment index moved above 50. This suggests manufacturing expanded at a faster pace in October than in September.
Markit Manufacturing Improves in October – The October US Manufacturing Purchasing Managers’ Index conducted by Markit came in at 53.4, up 0.2 from the 53.2 final September figure.Here is an excerpt from Chris Williamson, Chief Business Economist at IHS Markit in their latest press release:“With clues being sought as to whether the economy can sustain its recovery after rebounding from lockdowns, the rise in the PMI in October is encouraging news. It’s inevitable that the pace of economic expansion will weaken after the surge seen in the third quarter, but the strength of the PMI hints at a recovery for which the underlying trend continues to strengthen at the start of the fourth quarter.“Producers of investment goods such as business equipment and machinery are leading the upturn in a welcome sign of rising business confidence and corporate investment, but it was worrying to see consumer goods producers report weakened order book growth, reflecting rising virus-related worries. Going forward, much will naturally depend on the extent to which the economy can remain open and functioning in the face of rising virus case numbers.” [Press Release]Here is a snapshot of the series since mid-2012. Here is an overlay with the equivalent PMI survey conducted by the Institute for Supply Management (see our full article on this series here).
ISM Services Index Decreased to 56.6% in October — The October ISM Services index was at 56.6%, down from 57.8% last month. The employment index decreased to 50.1%, from 51.8%. Note: Above 50 indicates expansion, below 50 contraction. From the Institute for Supply Management: Services PMI at 56.6%; October 2020 Services ISM Report On Business: Business Activity Index at 61.2%; New Orders Index at 58.8%; Employment Index at 50.1%; Supplier Deliveries Index at 56.2% . “The Services PMI registered 56.6 percent, 1.2 percentage points lower than the September reading of 57.8 percent. This reading represents a fifth straight month of growth for the services sector, which has expanded for all but two of the last 129 months. This graph shows the ISM services index (started in January 2008) and the ISM services employment diffusion index. This was below the consensus forecast, and the employment index was barely above 50.
Markit Services PMI: “Business activity expands at fastest pace since April 2015” – The October US Services Purchasing Managers’ Index conducted by Markit came in at 56.9 percent, up 2.3 from the final September estimate of 54.6. The Investing.com consensus was for 56.0 percent.Here is the opening from the latest press release:Commenting on the latest survey results, Chris Williamson, Chief Business Economist at IHS Markit, said:“Growth of business activity accelerated markedly in October, indicating that the underlying health of the US economy continued to recover at the start of the fourth quarter. While fourth quarter GDP will invariably fail to match the strong rebound seen in the third quarter, the economy looks to be continuing to grow at an above-trend rate.“Encouragingly, future business optimism showed a record surge, pulling prospects for the year ahead up to the highest for more than two years. Hopes of a brighter outlook were pinned on a vaccine ending the COVID-19 pandemic over the coming year and additional stimulus supporting the economy in the meantime.” [Press Release] Here is a snapshot of the series since mid-2012.
Heading into election day, at least 30 million workers are being hurt by the coronavirus recession –EPI Blog by Heidi Shierholz -One of the most frequent questions I’ve gotten in the last few months is, “How many workers are being hurt by the coronavirus recession?” There is a huge amount of confusion about this because two major, completely separate, government data sets that address this question are reporting very different numbers. Specifically, the Bureau of Labor Statistics (BLS) reported that the official number of unemployed workers in September, from the Current Population Survey, was 12.6 million (September is the latest data available; October numbers will be released this Friday). But during the reference week for the September monthly unemployment figure – the week ending September 12 – the Department of Labor (DOL) reported that there were a total of 26.5 million people claiming unemployment insurance (UI) benefits. The UI number is compiled by DOL from reports it receives from state unemployment insurance agencies. What is going on? In a nutshell: The BLS official number of unemployed workers vastly understates the number of workers who have faced the negative consequences of the coronavirus recession, and DOL’s UI number overstates the number of workers receiving unemployment benefits. Let’s first look at UI. An important way the numbers coming out of DOL are overstating the number of people receiving UI benefits right now has to do with delays in the processing of applications (delays caused by the overwhelming number of applications UI agencies have received during the COVID-19 crisis). When a worker’s benefits are delayed, they are paid retroactively. This is as it should be, but it causes reporting problems. Say a worker claims UI benefits not just for their most recent week of unemployment, but also for the six prior weeks. That worker will show up in the data not as one person who claimed seven weeks of benefits, but as seven claims. Nobody knows how extensive that problem is, but this New York Times articlehas good information on it. Another issue is that state UI agencies have been the target of fraud – not individuals filing one or two fraudulent claims, but sophisticated cyberattacks involving extensive identity theft and the overriding of security systems. Note: None of this negates the fact that the expansions of unemployment insurance in the CARES Act were an enormous success! These expansions have been a lifeline to millions and a crucial boost to the economy.
Weekly Initial Unemployment Claims at 751,000 – The DOL reported: In the week ending October 31, the advance figure for seasonally adjusted initial claims was 751,000, a decrease of 7,000 from the previous week’s revised level. The previous week’s level was revised up by 7,000 from 751,000 to 758,000. The 4-week moving average was 787,000, a decrease of 4,000 from the previous week’s revised average. The previous week’s average was revised up by 3,250 from 787,750 to 791,000. This does not include the 362,883 initial claims for Pandemic Unemployment Assistance (PUA) that was up from 359,044 the previous week. (There are some questions on PUA numbers). The following graph shows the 4-week moving average of weekly claims since 1971. The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased to 787,000. 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 7,285,000 (SA) from 7,823,000 (SA) last week and will likely stay at a high level until the crisis abates. Note: There are an additional 9,332,610 receiving Pandemic Unemployment Assistance (PUA) that decreased from 10,324,779 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 3,961,060 are receiving Pandemic Emergency Unemployment Compensation (PEUC) that increased from 3,683,496 the previous week.
Slow pace of improvement in jobless claims continues – This week’s new jobless claims were essentially unchanged (but at their pandemic low), while continued claims continued their decline, also to a new pandemic low. On a non-seasonally adjusted basis, new jobless claims declined by only 543 to 738,166, just above October 3’s revised pandemic low 731,249. Seasonally adjusted claims declined by 7,000 to 751,000, a new pandemic low (which was also last week’s number before revision this week). The 4 week moving average also decreased by 4,000 to 787,000, also a new pandemic low. Here is the close up since the end of July – for comparison, remember that these numbers were in the range of 5 to 7 million at their worst in early April: Continuing claims (which lag initial claims typically by a few weeks to several months) on a non-adjusted basis declined by 537,898 to 6,951,731. With seasonal adjustment they declined by 538,000 to 7,285,000. Both of these are new pandemic lows: Continuing claims are now about 70% below their worst level from the beginning of May, but are still about 900,000 – 1,300,000 higher than their worst levels of the Great Recession. The very slow improvement in layoffs has generally continued, similar to the same slow continued improvement in most of the “weekly indicators” I update each Saturday. I continue to harbor serious doubts whether that will continue to be the case as cold weather forces some venues like outdoor dining to close again, and the pandemic continues to surge yet again, albeit with lower levels of deaths than last spring.
Over a million people still filed initial unemployment claims last week with no COVID-19 relief in sight –EPI – Another 1.1 million people applied for unemployment insurance (UI) benefits last week, including 751,000 people who applied for regular state UI and 363,000 who applied for Pandemic Unemployment Assistance (PUA). PUA is the federal program that provides up to 39 weeks of benefits for workers who are not eligible for regular unemployment insurance, like the self-employed. Without congressional action, PUA will expire in less than two months (more on that below).The 1.1 million who applied for UI last week was little changed (a decline of 3,000) from the prior week’s revised figures. Last week was the 33rd straight week total initial claims were far greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims – because we didn’t have PUA in the Great Recession – initial claims last week were still 3.6 times where they were a year ago.)Most states provide 26 weeks of regular benefits, but this crisis has gone on much longer than that. That means many workers are exhausting their regular state UI benefits. In the most recent data, continuing claims for regular state UI dropped by 538,000, from 7.8 million to 7.3 million.For now, after an individual exhausts regular state benefits, they can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 13 weeks of regular state UI. However, PEUC is set to expire in less than two months (more on that below).In the latest data available for PEUC (the week ending October 17), PEUC rose by 278,000, from 3.7 million to 4.0 million, offsetting only 46% of the 602,000 decline in continuing claims for regular state benefits for the same week. The small increase in PEUC relative to the decline in continuing claims for regular state UI is likely due in large part to administrative delays workers are facing getting on to PEUC. Further, many of the roughly 2 million workers who were on UI before the recession began, or who are in states with less than the standard 26 weeks of regular state benefits, are exhausting PEUC benefits. Nearly a million workers (972,000) had exhausted PEUC by the end of September, the latest exhaustion data available in most states (see column C43 in form ETA 5159 for PEUC here). Department of Labor (DOL) data suggest that right now, 22.8 million workers are either on unemployment benefits or have applied recently and are waiting to get approved (see Figure A). However, that number is an overestimate. For one thing, initial claims for regular state UI and PUA should be nonoverlapping – that is how DOL has directed state agencies to report them – but some individuals are erroneously being counted as being in both programs. An even bigger issue is that states are including retroactive payments in their continuing PUA claims, which would also lead to double counting. All this means nobody knows exactly how many people are receiving UI benefits right now, which is another reminder that we need to invest heavily in our UI infrastructure and technology.
ADP: Private Employment increased 365,000 in October — From ADP: Private sector employment increased by 365,000 jobs from September to October according to the October 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. “The labor market continues to add jobs, yet at a slower pace,” said Ahu Yildirmaz, vice president and cohead of the ADP Research Institute. “Although the pace is slower, we’ve seen employment gains across all industries and sizes. This was below the consensus forecast for 650 thousand private sector jobs added in the ADP report. The BLS report will be released Friday, and the consensus is for 600 thousand non-farm payroll jobs added in October. Of course the ADP report has not been very useful in predicting the BLS report.
October Employment Report: 638 Thousand Jobs Added, 6.9% Unemployment Rate –From the BLS: Total nonfarm payroll employment rose by 638,000 in October, and the unemployment rate declined to 6.9 percent, the U.S. Bureau of Labor Statistics reported today. These improvements in the labor market reflect the continued resumption of economic activity that had been curtailed due to the coronavirus (COVID-19) pandemic and efforts to contain it. In October, notable job gains occurred in leisure and hospitality, professional and business services, retail trade, and construction. Employment in government declined. … In October, the unemployment rate declined by 1.0 percentage point to 6.9 percent, and the number of unemployed persons fell by 1.5 million to 11.1 million. Both measures have declined for 6 consecutive months but are nearly twice their February levels (3.5 percent and 5.8 million, respectively). … The change in total nonfarm payroll employment for August was revised up by 4,000 from +1,489,000 to +1,493,000, and the change for September was revised up by 11,000 from +661,000 to +672,000. With these revisions, employment in August and September combined was 15,000 higher than previously reported. The first graph shows the year-over-year change in total non-farm employment since 1968.In October, the year-over-year change was negative 9.18 million jobs.Total payrolls increased by 638 thousand in October.Payrolls for August and September were revised up 15 thousand combined.The second graph shows the job losses from the start of the employment recession, in percentage terms.The current employment recession is by far the worst recession since WWII in percentage terms, and is still worse than the worst of the “Great Recession”. The third graph shows the employment population ratio and the participation rate.The Labor Force Participation Rate increased to 61.7% in October. This is the percentage of the working age population in the labor force. The Employment-Population ratio increased to 57.4% (black line). The fourth graph shows the unemployment rate. The unemployment rate decreased in October to 6.9%. This was close to consensus expectations, and August and September were revised up by 15,000 combined.
- 638,000 million jobs gained. The gains since May total about 55% of the 22.1 million job losses in March and April. The alternate, and more volatile measure in the household report was 2,243,000 jobs gained, which factors into the unemployment and underemployment rates below.
- U3 unemployment rate declined -1.0% from 7.9% to 6.9%, compared with the January low of 3.5%.
- U6 underemployment rate declined -0.7% from 12.8% to 12.1%, compared with the January low of 6.9%.
- Those on temporary layoff decreased -1,432,000 to 3,205,000.
- Permanent job losers decreased by 72,000 to 3,684,000.
- August was revised upward by 4,000. September was also revised upward by 11,000 respectively, for a net gain of 15,000 jobs compared with previous reports.
- the average manufacturing workweek rose 0.3 hours from 40.2 hours to 40.5 hours. This is one of the 10 components of the LEI and will be a strong positive.
- Manufacturing jobs rose by 38,000. Manufacturing has still lost -621,000 jobs in the past 8 months, or 4.8% of the total. 55% of the total loss of 10.6% has been regained.
- Construction jobs rose by 84,000. Even so, in the past 7 months -294,000 construction jobs have been lost, 3.8% of the total. About 75% of the worst loss of 15.2% loss has been regained.
- Residential construction jobs, which are even more leading, rose by 18,000. In the past 8 months there have still been -6,400 lost jobs, or about 0.8% of the total.
- temporary jobs rose by 108,700. Since February, there have still been -342,700 jobs lost, or 11.7% of all temporary help jobs.
- the number of people unemployed for 5 weeks or less declined by -52,000 to 2.5 million, compared with April’s total of 14.283 million.
- Professional and business employment rose by 208,000, which is still -1,149,000, or about 5.3% below its February peak.
- Average Hourly Earnings for Production and Nonsupervisory Personnel: rose $0.05 from $24.77 to $24.82, which is a gain of 3.6% in the 8 months since the pandemic began. Gains had previously reflected that job losses were primarily among lower wage earners, who have been disproportionately recalled to work. That we have increased employment and increased wages as well is a very positive development.
- the index of aggregate hours worked for non-managerial workers rose by 1.2%. In the past 8 months combined this has nevertheless fallen by about -6.3%.
- the index of aggregate payrolls for non-managerial workers rose by 1.4%. In the past 8 months combined this has nevertheless fallen by about -3.0%. Close to 80% of the loss from February to April has been made back up.
- Full time jobs were responsible for 1.0 million of the gain in the household report.
- Part time jobs were responsible for 1.2 million of the gain in the household report.
- The number of job holders who were part time for economic reasons increased by 383,000 to 6.683 million. This is still an increase since February of 2,365,000.
- Important note: There was a decline of 268,000 in government jobs. This included -147,000 census workers and -159,000 teachers!
SUMMARY: This was an extremely strong report. About the only negative was the big decline in education jobs, which may have been a quirk of seasonality. Everything else was positive. The household report’s gain of over 2 million jobs was responsible for most of the good news, including the decline in the un- and under-employment rates, and gains in both full and part-time jobs, as well as gains in aggregate hours and payrolls. Further, all of the leading jobs sectors showed gains. This bodes well for the months ahead. Nevertheless, only a little over half of all of the jobs lost due to the pandemic have come back, and the rate of increase since June has slowed to a *relative* crawl. It would take another 18 months, at the rate of this month’s job gains, to get back to the number of jobs that existed in February.
Employment in October: Further Deceleration – Menzie Chinn – The employment release confirms a deceleration in employment, presaging deceleration in the other macro indicators. Government employment is down, and not solely because of the winding-down of the decennial Census. Rather, state and local government employment is declining, and is now 6.8% below NBER peak level. Figure 1: Nonfarm payroll employment (black), civilian employment (red), both in 000’s, s.a.. Source: BLS via FRED. Civilian employment actually increased m/m in October, but that series is particularly volatile. Focusing on the nonfarm payroll number, m/m growth (not annualized, in logs) has fallen from 7% to 6% to 3% to 2%, from July to October. Figure 2: Government employment (blue), government employment ex.-Census temporary workers (brown), both in 000’s, s.a. Source: BLS via FRED, BLS, and author’s calculations. Figure 3: Government employment at state and local levels (teal), in 000’s, s.a. Source: BLS via FRED, and author’s calculations. In the wake of the 2007-09 recession, restrained government spending at state and local levels accounted for a lot of the slow recovery. We are at risk of repeating that sorry story, unless the Federal government provides further fiscal aid to the states and localities.
October jobs: better than expected by a long way to go – Jared Bernstein – Payrolls grew by 638,000 last month, and the unemployment rate fell sharply, by a full percentage point, to 6.9 percent. The report reveals a job market that’s healing, but at a slower pace than earlier in the year and with a long way to go to get back to full employment. Even with the large drop, the October jobless rate remains twice that of the pre-crisis rate. Government jobs fell (by 268,000) last month, but because this is partially related the cutting back of decennial Census jobs, a clearer signal of underlying labor demand comes from the private sector, which added 906,000 jobs. That’s a decent clip, but in May and June, private sector gains rebounded at a pace of 4 million per month; since then, the pace has slowed to 1 million. At this rate, the private sector will be back to its pre-crises peak around late summer of 2021. The figure below shows total and private payrolls. The remaining gap is clear – 10 million overall and 9 million for private – as is the slower pace of gains. This next figure shows the share of losses left to make back for many groups. The last two bars show that jobs are about halfway back. The first bar shows that because unemployment rate grew over 11 points from its low point to its high point – 3.5 to 14.7 percent – and has since clawed back almost 7 points, it has made up 70 percent of its lost ground. One important take from the figure is the slower progress by Black people. For both unemployment and employment rates, they lag other groups, having made back just half of their losses. This is an often-seen pattern for persons of color in weak labor markets, as they face labor market barriers, including racial discrimination, whose impact is accentuated in periods of weaker demand. Another worrisome sign in today’s report comes from the extended duration of unemployment for some jobless workers. About a third of the unemployed are now long-term unemployed (searching for work for at least six months), compared to 4 percent in April. This reflects that when this initial shutdown occurred, many workers went on temporary layoff, and, in fact, the bulk of the decline in unemployment last month came from these temporary layoffs getting back to work. But this means that the folks still left on the jobless rolls are in for potentially long spells of unemployment. This growth in people stuck in long-term unemployment is particularly problematic because extended unemployment insurance benefits are scheduled to expire at the end of this year. Re-extending these benefits and enhancing the dollar value of the claims should be policy makers’ first order of business in coming weeks. Turning to sectoral analysis, almost 70 percent of private industries added jobs last month, a relatively high share given the spiking coronavirus. Notable job gains in this regard can be seen in leisure/hospitality, which includes restaurants and bars, up about 200,000 last month and 400,000 over the past two months. Of course, it is very possible this gains attenuate in coming months given the sharply rising virus caseloads. While the relationship between the virus and commerce is far from one-to-one, meaning we don’t see March/April-type shutdowns in places where caseloads are climbing, we should be on the lookout for negative effects on jobs in sensitive, face-to-face services. Finally, especially given lower-for-longer interest rates from the Federal Reserve, Congress needs to get back to the business of providing relief to the millions of workers who still face considerable hardship. State and local budgets are still much reduced, forcing layoffs, and even while the the labor market is improving, it remains far from providing the income vulnerable families need to pay rents, mortgages, child care, and to meet their nutritional needs.
Comments on October Employment Report – McBride- The October employment report was at expectations, and employment for the previous two months were revised up slightly. Government employment declined 268 thousand in October. The job losses at the Federal level were due toletting go temporary decennial workers, but 130 thousand jobs were lost at state and local governments. These losses could increase sharply if there is no disaster relief for the states. I’ll have more on this. Leisure and hospitality added another 271 thousand jobs in October, following 4.56 million jobs added in May through September. Leisure and hospitality lost 8.3 million jobs in March and April, so about 58% of those jobs were added back in the May through October period. Earlier: October Employment Report: 638 Thousand Jobs Added, 6.9% Unemployment Rate. In October, the year-over-year employment change was minus 9.18 million jobs. This graph shows permanent job losers as a percent of the pre-recession peak in employment through the October report. (ht Joe Weisenthal at Bloomberg)This data is only available back to 1994, so there is only data for three recessions.In October, the number of permanent job losers decreased to 3.684 million from 3.756 million in September. Since the overall participation rate has declined due to cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old. The prime working age will be key in the eventual recovery.The 25 to 54 participation rate increased in October 81.2% to from 80.9% in September, and the 25 to 54 employment population ratio increased to 76.0% from 75.0%. Typically retail companies start hiring for the holiday season in October, and really increase hiring in November. Here is a graph that shows the historical net retail jobs added for October, November and December by year. This graph really shows the collapse in retail hiring in 2008. Since then seasonal hiring had increased back close to more normal levels. Note: I expect the long term trend will be down with more and more internet holiday shopping. Retailers hired 243 thousand workers (NSA) net in October. Note: this is NSA (Not Seasonally Adjusted).This might be distorted this year by a combination of seasonal hiring – and some bounce back in employment from the shutdowns earlier this year. The number of persons working part time for economic reasons increased in October to 6.684 million from 6.300 million in September.These workers are included in the alternate measure of labor underutilization (U-6) that decreased to 12.1% in October. This is down from the record high in April 22.8% for this measure since 1994.This graph shows the number of workers unemployed for 27 weeks or more.According to the BLS, there are 3.556 million workers who have been unemployed for more than 26 weeks and still want a job.This increased sharply in October – since the largest number of layoffs were in April – and will be a key measure to follow during the recovery. Summary: The headline monthly jobs number was at expectations, and the previous two months were revised up 15,000 combined. The headline unemployment rate decreased to 6.9%. However the number of part time workers increased, and the number of long term unemployed increased sharply.
What the next president inherits: More than 25 million workers are being hurt by the coronavirus downturn – EPI Blog by Heidi Shierholz – Some of the most frequent questions I’ve gotten in the last few months are, “How many workers are being hurt by the coronavirus recession?” and “What kind of economy will the next president inherit?” There is a huge amount of confusion about the number of workers impacted because two major, completely separate, government data sets that address this question are reporting very different numbers. Specifically, the Bureau of Labor Statistics (BLS) reported that the official number of unemployed workers in October, from the Current Population Survey, was 11.1 million. But during the reference week for the October monthly unemployment figure – the week ending October 17 – the Department of Labor (DOL) reported that there were a total of 21.5 million people claiming unemployment insurance (UI) benefits in all programs. The UI number is compiled by DOL from reports it receives from state unemployment insurance agencies. What is going on? In a nutshell: The BLS official number of unemployed workers vastly understates the number of workers who have faced the negative consequences of the coronavirus recession, and DOL’s UI number overstates the number of workers receiving unemployment benefits. One straightforward way that the weekly UI numbers are higher than the monthly unemployment numbers is that the UI numbers include both Puerto Rico and the Virgin Islands, and the monthly unemployment numbers include only the 50 states and the District of Columbia. The number of people on UI (regular state benefits, Pandemic Unemployment Assistance, Pandemic Emergency Unemployment Compensation, or Extended Benefits) for the week ending October 17 was 294,000 in Puerto Rico and 4,000 in the Virgin Islands, for a total of nearly 300,000 UI claims outside of the 50 states and the District of Columbia. Given the problems with the UI data, I estimate the number of workers affected by the coronavirus recession using the monthly unemployment data from BLS. As mentioned above, the official number of unemployed in October – 11.1 million – is a vast undercount of the number of workers being harmed. Here are the missing factors:
- Some workers are being misclassified as “employed, not at work” instead of unemployed. BLS has discussed at length that there have been many workers who have been misclassified as “employed, not at work” during this pandemic who should be classified as “temporarily unemployed.” In October, there were 0.6 million such workers. (Wonky note: Some of these workers may not have had the option of being classified as “temporarily unemployed,” meaning they weren’t technically misclassified, but all of them were out at work because of the virus.)
- Some workers who are out of work as a result of the virus are being counted as having dropped out of the labor force instead of as unemployed. In order for a person without a job to be counted as unemployed, they must be available to work and actively seeking work. However, during the COVID-19 crisis, many people who are out of work as a result of the crisis do not meet those criteria. For example, many workers are out of work because of care responsibilities as a result of COVID-19 (e.g., a young child’s school being remote, or an elderly parent’s day care closing). These workers would not be counted as officially unemployed but are nevertheless out of work because of the virus. To calculate how many there are, I estimate what the labor force level would be if the labor force participation rate had not dropped since February – the month before the pandemic hit the U.S. labor market – by multiplying the February labor force participation rate by the October population level. I then subtract this “counterfactual” labor force from the actual labor force. This yields an additional 4.5 million people out of the labor force as a result of the virus.
- The number of officially unemployed is undercounted, even in normal times (and is probably worse now). Rigorous research that addresses issues like the fact that survey nonresponse is nonrandom – and that missing individuals are more likely than the general population to be unemployed – find that the official unemployment rate was understating the unemployment rate by 1.5 percentage points at the start of 2020. Accounting for that undercount yields an additional 2.5 million unemployed workers. (This is conservative, given that there isgood evidence that this problem is likely substantially worse in the coronavirus era.)
- Millions of employed workers have seen a drop in hours and pay because of the pandemic. BLS reports that 7.0 million people who were working in October had been unable to work at some point in the last four weeks because their employer closed or lost business due to the coronavirus pandemic, and they did not receive pay for the hours they didn’t work. These workers have clearly been hurt by the coronavirus recession. (It’s worth noting that these workers represent a portion of the gap between the official unemployment numbers and the UI claims numbers, since many workers who are employed but have seen a drop in hours and pay are eligible for partial UI benefits but are not unemployed.)
Adding up all but the last quantity above, that is 11.1 million + 0.6 million + 4.5 million + 2.5 million = 18.7 million workers who are either officially unemployed or otherwise out of the labor force as a result of the virus. Also adding in the 7.0 million who are employed but have seen a drop in hours and pay because of the pandemic brings the number of workers directly harmed in October by the coronavirus downturn to 25.7 million. That is more than 15% of the workforce.
Midwestern States Thrive With Fewer Virus Rules As Second Wave Arrives – The debate between opening and closing the economy has been heated between Democrats and Republicans. President Trump has said if a second virus wave strikes, he will not close the economy. On the other hand, Democratic presidential nominee Joe Biden said he would close the economy to mitigate the virus spread. While the debate to close or leave open the economy rages on between both political parties as record daily caseloads have been seen in the last few days, we shed light on a handful of Republican Midwestern states that have defied implementation of strict coronavirus restrictions, allowing their respective economies to thwart complete economic devastation. Many of these states, run by Republican governors, have practically no restrictions to mitigate the spread of COVID-19. Still, the strategy, so far, has paid off with fewer business closures and more hiring shown in the latest unemployment figures, according to AP News. “For now, though, those Midwestern states have a lock atop the unemployment rankings, far below the national average rate for September of 7.9%. Nebraska leads the nation with a 3.5% unemployment rate, followed by South Dakota, Vermont, North Dakota, Iowa, and Missouri,” AP said. However, there’s a tradeoff between keeping the economy open, and limited coronavirus restrictions appear to be running into significant issues. These states are now recording some of the highest surges in new virus cases in the country. Take, for example, North Dakota and South Dakota, are conservative states, have had a Laissez-faire approach to mitigate the virus spread, both are now exhibiting the most cases per capita in the U.S., along with Nebraska and Iowa. Despite surging cases in Midwestern states, their economies have recovered much quicker than New York or major cities in California, which are liberal-run and continue to enforce some of the strictest social distancing rules, crushing SMEs. Midwestern governors were some of the first to ease lockdowns in late spring, supporting SMEs: “I’ve got to believe that if you shut down harder, you’re going to see a more severe impact to your industries and the longer you’re shut down, the harder it’s going to be for those industries to rebound,” Nebraska Gov. Pete Ricketts said. Missouri Gov. Mike Parson, who contracted the virus last month, has promoted the idea of balancing the virus and keeping the economy open. And Iowa Gov. Kim Reynolds has repeatedly told residents not to let the virus dominate their lives. South Dakota Gov. Kristi Noem has said,” there are consequences to what we’ve seen happen in other states – that shutting down businesses, stopping people’s way of life has some devastating impacts. We’re taking a very balanced approach.”
No Indiana COVID-19 Policy Changes Post-Election, Holcomb Says – The day after a landslide reelection victory, Republican Gov. Eric Holcomb said he’s not making any changes to policy on handling COVID-19, a major point of contention on the campaign trail. There’s “no truth” to rumors that Indiana will shut down again after the election, he said during a Wednesday afternoon briefing on the pandemic. That includes no changes to the state’s economy, and no statewide closure of schools. Holcomb won a second term as governor on Tuesday, defeating Democrat Woody Myers, a former state health commissioner. Myers had called for tougher anti-virus actions as Indiana’s COVID-19 hospitalizations, deaths and new infections climbed steeply since nearly all state restrictions were lifted in September. Alternatively, some conservatives called Holcomb’s coronavirus actions excessive and, instead, backed Libertarian candidate Donald Rainwater. The governor has continued to resist calls for reinstating coronavirus limits, however, emphasizing Wednesday the preference for health officials to address virus spread at the county level and adding that “we just don’t make decisions based on politics.” “I don’t think the frustration or the the impatience with getting through COVID-19 is partisan whatsoever.” Holcomb said. “We’re making decisions based on the common good, and trying to get us through this as safely and swiftly as possible. It has zero to do with political capital or election results with me.” Indiana’s newly reported COVID-19 cases have risen to their highest single-day level of the pandemic, state health officials said Wednesday as the number of coronavirus patients being treated at Indiana hospitals also climbed to a new high. The 3,756 new coronavirus infections reported Wednesday by the Indiana State Department of Health surpassed the 3,649 new infections the state agency reported on Oct. 29.
Judge rules to limit California governor powers amid pandemic – A judge ruled on Monday to limit California Gov. Gavin Newsom‘s (D) executive powers during a pandemic.Sutter County Superior Court Judge Sarah Heckman issued a preliminary order for Newsom to stop making executive orders that could contradict state laws, after determining one of his orders was “an unconstitutional exercise of legislative power.”Her order prevents Newsom “from exercising any power under the California Emergency Services Act which amends, alters, or changes existing statutory law or makes new statutory law or legislative policy.”The judge determined that the California Emergency Services Act itself was constitutional but noted it “does not permit the Governor to amend statutes or make new statutes.””The Governor does not have the power or authority to assume the Legislature’s role of creating legislative policy and enactments,” the order says.Heckman’s order will become final in 10 days if Newsom’s team does not challenge it. She is the second judge in the county to conclude Newsom was overstepping his authority, but the ruling is contradictory to other state and federal decisions on the governor’s emergency powers during the coronavirus pandemic, The Associated Press noted. A spokesman for Newsom told The Hill that the administration does not agree with the ruling’s limitations and is “evaluating next steps.””The tentative ruling makes clear that the Governor’s statutory emergency authority is broad, and constitutional, and that the Governor has the authority, necessary in emergencies, to suspend statutes and issue orders to protect Californians,” the spokesman said.Republican state Assemblymen James Gallagher and Kevin Kiley challenged Newsom, saying he was overstepping state law with his executive orders.”This is a victory for separation of powers,” the lawmakers said in a joint statement obtained by the AP. Newsom “has continued to create and change state law without public input and without the deliberative process provided by the Legislature.”
McKinsey, Deloitte Charge Big Bucks to States for Botched Covid Projects – Yves Smith – The Wall Street Journal has a solid report tonight on how state governments have been fleeced by major consulting firms like McKinsey and Deloitte.1 The question one winds up asking when reading about these fiascoes is whose bright idea was it to hire big name, and even if they discounted a bit, still very pricey consultants for engagements that weren’t in their wheelhouses. “Nobody ever got fired for hiring IBM” does not apply to hiring IBM to manage a construction site. Mind you, the world is awash with outsourcing and consulting grifting,. It’s been so extensive in the UK that we’ve been negligent in chronicling it, since it’s hit the “dog bites man” level of predictability. Nevertheless, even the numbed UK press worked up some outrage over the costly fail of outsourced contract tracing. The BMA recently published an overview of the extent of government outsourcing of its Covid responses and why they performed poorly.What is distressing about these US examples isn’t merely that they demonstrate the folly of hollowing governments and then expecting them to be able to add capacity or respond to emergencies by bringing in private sector mercenaries. It is that they also illustrate the general decline in what we’ve called organizational capacity. The consultants either have to have been utterly cynical and knew that they couldn’t deliver on the project specs and didn’t much care, or were so lacking in understanding what the required tasks were about that they arrogantly believed that simply being good at show and tell (aka PowerPoint) and recognized as smart was all it took. Nathan Tankus discussed the importance of organizational capacity in a post on the Greece bailout negotiations, explaining in some detail why the Greek government was not even remotely in a position to take over the Bank of Greece (which was really a node of the European Central Bank) or start its own central bank. What I find impossible to fathom here is how the state governments in question here failed to understand that what they needed were cadres of middle managers and experienced lower level workers with relevant expertise, not pricey symbol manipulators. What was California smoking to hire Deloitte to run call centers, particularly when there actually are firms that specialize in running outsourced call centers? Admittedly, the call center outsourcing took place in parallel to a smaller contract on a related IT system.But California was doubling down on failure. But documents obtained by Public Records Act requests suggest that Deloitte had performed poorly on its considerable work on the employment IT system over the years. From the Journal: Deloitte clearly has “not successfully resolved [the department’s] IT challenges or modernized its system,” a letter from dozens of local lawmakers this year said. David Chiu, a Democratic member of the state’s Assembly, said it is “incredibly concerning that [the employment department] has continued to go back to a contractor that has a well-documented history of bungling unemployment insurance work, not just for California but for other states.” … But this level of client-fleecing is amateur hour compared to McKinsey. Get a load of this: New York Gov. Andrew Cuomo’s office awarded McKinsey a $9.9 million contract in March to advise the state on issues related to Covid-19, the illness caused by the new coronavirus. That included 18 weeks of “leadership counseling” at $42,500 a week – the contract didn’t specify who would be counseled, or what that would entail.
With 200,000 customers in the region behind on utility bills, help available for many | Pittsburgh Post-Gazette – More than 200,000 utility customers in southwestern Pennsylvania are behind on their bills, with winter looming and an eight-month long pandemic-driven ban on utility shutoffs about to expire on Nov. 9. Utilities serving customers here, including Duquesne Light, Peoples Natural Gas, Columbia Gas of Pennsylvania, West Penn Power, and the Pittsburgh Water & Sewer Authority, report they’re owed more than $171 million in overdue payments as of Sept. 30, a 47% increase from the same period last year. But not all of those customers are at risk of losing service. Some, whose household income is within 300% of the federal poverty line, fall into a protected group that Pennsylvania regulators decided should be exempt from shutoffs until the end of March 2021. The carve-out essentially mirrors the annual winter moratorium that starts on Dec. 1 and prohibits utilities from shutting off low-income customers for nonpayment. That applies to households at or below 250% of the federal poverty level. Still, utilities don’t know for sure how many customers fall into these protected categories. That’s, in part, because the way utilities confirm that a client has a low income is if the client volunteers this information when seeking assistance. And data shows that not all low-income customers get the help they need in paying utility bills. Of the customers served by North Shore-based Peoples Natural Gas, the utility estimates that nearly a quarter of those thought to be low income aren’t enrolled in any assistance programs for which they qualify. That’s gleaned by comparing how many low-income households the utility assumes it serves based on U.S. Census Bureau data versus how many have verified they are low income by seeking assistance through utility programs. For Downtown-based electric utility Duquesne Light, the spread is even bigger. The company reported to regulators that in 2019 less than half of the customers it estimated to be low income were actually receiving assistance. At Columbia Gas of Pennsylvania, which serves a large swath of the western and central portion of the state, and at electric utility West Penn Power, nearly a quarter of residential customers are estimated to be low income. But those who have sought assistance make up a smaller number – 16% at Columbia and 11% at West Penn.
PURA Opts for Existing Programs Over Shutoff Moratorium – The Public Utilities Regulatory Authority ruled in a virtual hearing on Friday morning that it would not renew the statewide moratorium on electricity and gas shutoffs which expired on October 1. Eversource had filed a motion to extend the moratorium on September 30. Under current regulations, an extension would have allowed Eversource to offset the cost of customers unable to pay their bills by increasing costs for paying customers. Without a moratorium, Eversource has no legal right to these funds. Eversource representatives at the hearing said that they wanted to have the moratorium in place for the sake of “clarity and alignment,” at a time when many Connecticut residents are unable to make payments due to economic fallout from the COVID pandemic. According Eversource Vice President of Operations Jessica Cain, enrollment in payment programs has nearly doubled since the start of the pandemic. Eversource currently has 65,000 individuals enrolled in payment arrangements or matching payment programs. Cain said that 125,000 households currently have a past due balance of greater than $125, leaving them eligible to receive a disconnect notice. State Sen. Norm Needleman, D-Essex, who chairs the Energy and Technology Committee in the state legislature, said he believes that the decision will be revisited before the Winter Protection Program’s no-shut-off policy is lifted next March. According to PURA Chair Marissa Gillett, 15 states never put in place a shut off moratorium and 18 others have already allowed their moratoria to lapse. Companies in those states, she said, voluntarily decided not to shut off power for any of their customers.
Official academics downplay the risks of school reopenings as pandemic rages across the US – Last month, the Atlantic published an article by Professor Emily Oster, an economist at Brown University, titled “Schools Aren’t Super-Spreaders,” which has since been promoted by multiple media outlets to pressure communities to resume in-person learning in K-12 schools and universities across the United States. The New York Times has been early and steadfast in its endorsement of the policy. In her article, Oster argued that “fear and bad press” led to the slowing down and cancellation of school reopenings in late summer, even in places “with relatively low positivity rates” like “Chicago, L.A., and Houston – all remote, at least so far.” As her article title suggests, Oster seeks to allay these fears by asserting that schools are not super-spreader locations, where one person transmits COVID-19 to multiple others. In reality, COVID-19 is often transmitted in “super-spreader” fashion because its aerosolized form allows it to linger and concentrate in a closed space, with poorly-ventilated and overcrowded classrooms being highly conducive to this type of spread. The American Academy of Pediatrics (AAP) reported Monday that there were 61,447 new child COVID-19 cases last week, bringing the total in the US to 853,635. This represents 11.1 percent of all US cases, up from 2 percent in April. In October there were nearly 200,000 new cases in children, predominately in Western states such as Alaska, Colorado, Idaho, Montana, New Mexico and Utah. Other states reporting a greater rise among children include the Dakotas, Kentucky, Michigan and Wisconsin, where recent surges have been significant. These rapid rises coincide with the expansion of school reopenings in recent weeks. The basis of Oster’s data was limited to the last two weeks of September, where she notes that infections in schools were very contained. She writes: “Our data on almost 200,000 kids in 47 states from the last two weeks of September revealed an infection rate of 0.13 percent among students and 0.24 percent among staff. That’s about 1.3 infections over two weeks in a school of 1,000 kids or 2.2 infections over two weeks in a group of 1,000 staff. Even in high-risk areas of the country, the student rates were well under half a percent.” According to CISION PRWeb, only 38 percent of K-12 school students were attending schools in person on Labor Day. However, by Election Day that figure exceeded 60 percent, with 35.7 percent of schools offering in-person learning every day, 26.5 percent in a hybrid schedule of 2-3 in-person days per week and 37.8 percent of schools only offering virtual learning.
Thirteen-year-old eighth grader in Missouri dies of COVID-19 -Peyton Baumgarth died of COVID-19 at Cardinal Glennon Hospital in St. Louis, Missouri, on Saturday, October 31, becoming one of the youngest victims of the coronavirus in the US. He was only 13 years old. Peyton was an eighth grader at Washington Middle School. His last day in school was on October 22, before beginning his quarantine on October 26. Within a week, his symptoms worsened dramatically, and he was hospitalized. He died less than two weeks after he last attended class. Peyton’s uncle told 5 On Your Side news that the family never thought anything like this could happen. “We thought this was a passing … nothing worse than the common flu, and obviously that’s not the case,” said Wayne Franek, Jr. Sadly, Franek reported that Peyton’s mom has also tested positive for the coronavirus: “I can’t imagine what she’s going through,” Franek said. “Nobody should ever have to deal with that.”Like hundreds of thousands of people across the US, Peyton’s parents are undoubtedly struggling through unthinkable pain. On top of the immense grief that comes with losing a child, these parents are facing outrageous medical bills from Peyton’s brief hospital stay. AGoFundMe page for Peyton’s parents, set up by a family friend, reads: “Peyton’s parents, Stephanie and John, are now left with HUGE medical bills, funeral expenses and loss of pay related to time off of work.”
Omaha, Nebraska school worker dies from COVID-19 as cases spike and teacher anger grows — Greg Petersen, a school custodian in the Millard School District of Omaha, Nebraska died from COVID-19 on Thursday as schools in the state reopen amid the continued spread of the virus, fueling mounting anger among educators. Infections are rising rapidly in Nebraska, with a record 1,605 daily new cases on Thursday. As of Sunday, the state has recorded 652 COVID deaths. Petersen was in his 60s and worked full time at Grace Abbott Elementary as a custodian, and previously worked at other Omaha schools. His wife Lisa wrote on Facebook, “The kids and I are in shock. I don’t know what we’re going to do without him. Such a wonderful husband and father and a great guy.” The school district has tried to absolve itself of all responsibility for Petersen’s death. Rebecca Kleeman, Millard School District spokesperson, told the Omaha World Herald, “We don’t know how he contracted the virus.” Kleeman claims Petersen had no contact with anyone else at the school. Abbott Elementary has had at least three confirmed cases of COVID-19 this year while the district has officially reported over 85 active cases and 273 students and staff quarantined so far. Other schools have seen confirmed outbreaks as well. A principal at Millard North sent a letter Friday saying, “we learned of four positive cases within our community.” Counselors at Millard North were also asked to come back before a 14-day quarantine ended. More than 70,000 Nebraskans have tested positive with COVID-19 as of Sunday. Douglas County, which includes Omaha, had over 421 confirmed cases by Friday, adding to a total of 22,786 total cases since March. There have been 149 reported cases in schools over the past two weeks in Douglas County, which includes over 90 staff and 59 students so far. At least 174 educators and students are in quarantine.
Washington D.C. Public Schools halt reopening plans as teachers mount sickout strike — On Monday, officials in the Washington D.C. Public School (DCPS) system announced a halt to their plans to reopen schools after hundreds of teachers began calling out sick. The sickout took place after a member-wide vote last week of the Washington Teachers Union (WTU) resulted in 93 percent of teachers declaring “no confidence” in Democratic Mayor Muriel Bowser’s reopening plans, which had been slated to begin Nov. 9. The WTU suggested teachers take a “mental health day” before Tuesday’s presidential election. “We are living in turbulent times and teachers are experiencing a great amount of fear and anxiety around the national elections as well as the District’s Return to School Plan,” declared WTU President Elizabeth Davis in an email to teachers Sunday. “While one day off may not by itself cure burnout, a mental health day can provide you with a much-needed and well-deserved break.” The announcement comes after the Washington D.C. region has seen an increase of COVID-19 cases in its jurisdictions. The seven-day daily average of new cases recorded Monday for Maryland-DC-Virginia stood at 2,274. This exceeded the previous high of 2,218 set during May. According to the American Academy of Pediatrics and the Children’s Hospital Association, 61,000 children caught COVID-19 in the United States last week. In all, over 853,635 children have caught the virus in the US, or nearly 11.1 percent of the total COVID-19 cases in the country, dispelling the myth promoted by Democrats and Republicans across the US that children are less susceptible to the virus and that schools can be reopened “safely.” The WTU and DCPS officials have been at loggerheads over certain precautions in the district’s school reopening plan. The plan was to begin allowing 11 students per grade to attend what was being termed “CARE classrooms” starting Nov. 9.
Brookline, Massachusetts educators begin sickout strike as state officials push to keep schools open – On Monday, Massachusetts Governor Charlie Baker announced new restrictions in response to a spike in coronavirus cases in the state. Sunday marked the ninth straight day the state had reported more than 1,000 new infections, while the three-day average for COVID-related hospitalizations has jumped by nearly 40 percent over the course of the last month, from 432 to 602. The Republican governor has repeatedly vowed that Massachusetts would not return to the “lockdown” implemented in the early months of the pandemic and the new measures make this clear. The new set of targeted restrictions tightens a mask-wearing order, imposes a 10 p.m. to 5 a.m. curfew for all but “essential” activities, as well as ordering restaurants, liquor stores, gyms, casinos and theaters to close at 9:30 p.m. However, Baker and state school officials have placed a premium on opening schools despite the dangers faced by students, teachers and their families, and these new restrictions do nothing to change that. Schools across the state remain a patchwork of partially opened districts, hybrid and fully remote learning, with the health and safety of communities hanging in the balance. There is mounting opposition to the opening of schools among educators across Massachusetts and the entire country. In the Greater Boston town of Brookline on Monday, the Brookline Educators Union (BEU) announced that they intend to strike Tuesday after the Brookline School Committee’s “decision to renege on its support for maintaining 6 feet of social distancing within public schools to best prevent against the spread of COVID-19,” BEU President Jessica Wender-Shubow said in a statement. In a letter to Brookline parents, the school committee said that it reserved the right at any point to adjust “best practices” for school safety, including mandating 6-foot distancing, as “best practices can change.” The school committee has filed a petition for a strike investigation with the Massachusetts Department of Labor Relations. Massachusetts law prohibits public employees from striking.”We’re doing a sickout tomorrow. We’ve been trying to sit down with the school committee for months to come up with a new MOA, and they’ve been refusing to discuss anything.”
Ohio schools report 2,000 new coronavirus cases this week – (WCMH) – For the eighth consecutive week, Ohio schools reported a record increase of coronavirus cases among students and staff members on Thursday, 2,010 new cases that elevate the state’s total to 7,068.Since mid-September, the Ohio Department of Health has released case numbers for this school year from Ohio’s public districts, private schools, vocational schools, preschools and other non-college institutions. Every week has seen a record increase in cumulative cases from the previous. Cumulative COVID-19 cases reported by Ohio schools Schools report cases to ODH on Tuesdays to be announced to the public on Thursdays. (See more information on the data in the dropdown below.) Schools report cases among students and staff to ODH on Tuesdays, and ODH releases numbers on Thursdays at 2 p.m. However, the numbers a school reports to ODH may not be as recent as Tuesday. Case criteria
- Full-time or part-time students and staff members who have tested positive for or been diagnosed with COVID-19.
- Staff includes teachers, administrators, coaches and support staff.
- Excludes students/staff who are completely remote, but includes them if they were “on-site” while infectious.
ODH reports “new” and “cumulative” cases. Cases only move over to “cumulative” once the person is no longer COVID-positive. This means the number of “new” cases each week is not guaranteed to be the weekly difference between “cumulative” totals. More info4,333 (61%) of Ohio’s cases are students and 2,735 (39%) are staff members, which include teachers, administrators, coaches and support staff.992 schools, districts, etc. have reported at least one COVID-19 case this school year, an increase of 108 since last week. Three large public districts in the Columbus area lead the state in cumulative cases: Olentangy Local Schools (140), Dublin City Schools (105) and South-Western City Schools (102).
Michigan K-12 schools see another huge increase in COVID-19 outbreaks – COVID-19 continues to rip through Michigan’s K-12 schools. New data shows that last week there were a record 44 new outbreaks in schools across the state, an increase of more than 50 percent over the previous week. This brings the number of ongoing outbreaks in Michigan schools to 126, with a total of 606 COVID-19 cases among students, teachers and staff. As these latest figures show, the spread of COVID-19 through Michigan schools is not only continuing but accelerating, with an increasing number of new outbreaks each week for the past month in virtually every part of the state. Grand Rapids and its surrounding suburbs, which comprise Michigan’s second largest metropolitan area, with a population over one million, are the state’s current hotspot for COVID-19 outbreaks in K-12 schools. Twelve different schools across Kent County now have ongoing outbreaks, with a staggering 138 teachers, students and staff infected so far. The state’s largest ongoing school-related outbreak is connected to Rockford High School, located north of Grand Rapids. The outbreak was detected in the first days of October, with four cases initially reported on October 5. By October 12, the number of cases had increased to 10, prompting the closure of the high school and a switch to virtual learning. Despite this, the outbreak has continued to spread further each week, and as of November 2 there are 29 Rockford High students, teachers and staff who have tested positive. Click for interactive map. The Detroit metro area (Wayne, Macomb and Oakland counties, with a combined population of over 3 million) has 22 ongoing outbreaks totaling 84 cases in schools spread out across the cities of Detroit, Canton, Wyandotte, Romulus, Troy, Oxford, Clarkston, Ortonville, Rochester Hills, Warren, Clinton Township, St. Clair Shores, Chesterfield, Macomb, Mount Clemens, Ira and Romeo. Genesee County, whose largest city is Flint, has 10 ongoing outbreaks with 35 cases in schools across Flint, Burton, Swartz Creek, Grand Blanc, Lindon, Davison and Fenton. Rural Michigan schools also continue to see increasing numbers of cases and outbreaks. The state’s largest new outbreak infected 11 people at Benzie Central High School in the village of Benzonia. Located in the northern Lower Peninsula near the Sleeping Bear Dunes, Benzonia has a total population of about 500. Michigan’s rural Upper Peninsula has 11 ongoing outbreaks with 69 total cases, including four new outbreaks last week in Marquette County. All of the UP, as well as all of northern Michigan, has now fully reopened for face-to-face learning according, to Burbio’s K-12 School Opening Tracker. There were also new outbreaks last week in four different schools in the city of Lapeer, which is located north of Detroit and east of Flint in Michigan’s rural “Thumb” region. With a population of 8,600, Lapeer now has ongoing outbreaks in six of its schools.
Bipartisan assault on US public education intensifies amid COVID-19 pandemic – Several recently published reports have drawn attention to the unrelenting assault on public education being carried out by Republicans and Democrats across the United States. Under conditions of a deepening pandemic, which is exacerbating the broader economic and social crisis for the working class and poor, the bipartisan gutting of school district budgets across the US is projected to reach an unprecedented scale. According to a recent Economic Policy Institute (EPI) study, K-12 districts across the US are facing a $1 trillion shortfall by the end of 2021. The sharp decline in state and local tax revenue comes in the aftermath of decades of systematic disinvestment in public education. State and local funding constitutes the majority source of K-12 public school budgets in the US. While corporate profits quickly rebounded in the period following the Great Recession, surpassing 2008 levels by nearly 80 percent within six years according to many conservative estimates, spending on public education was consistently slashed during the same period under the Obama administrations. Average state and local funding for public education only returned to 2008 levels in 2016 and remained flat from that year until the onset of the pandemic. The Center for American Progress estimates that near-term state and local spending on education will drop as much as 50 percent due to the pandemic. The further evisceration of state and local budgets for education will have a devastating impact on education workers and public school students alike. Recent Bureau of Labor Department data reveals that nearly 1 million K-12 education jobs were cut during the first four months after the onset of the pandemic. Another 350,000 education jobs were slashed this past September alone. The mass layoffs in public education, which is aggravating residual staffing shortages stemming from pre-pandemic layoffs, is taking place amid a general rise in K-12 student enrollment across the US. In addition to job cuts, the decades-long, bipartisan effort to drive down wages among education workers has continued full force. A Southern Regional Education Board study published in September details how average teacher salaries across the US have sunk so low that mid-career educators in 38 states, both Democrat and Republican-led, qualify for federal assistance programs such as food stamps. One out of five teachers in the US is forced to take on a second job to make ends meet. Massive job cuts, stagnant wages and worsening school conditions, including increased classroom overcrowding, crumbling school infrastructure, as well as antiquated and inadequate instructional materials, form the objective conditions that have compelled teachers across the US to engage in an ongoing series of strikes since the February 2018 statewide wildcat strike by West Virginia teachers. Despite the initiative and courage of rank-and-file educators, the American Federation of Teachers (AFT), the National Education Association (NEA) and their state and local affiliates have continuously worked to isolate and wear down striking teachers in an effort to subordinate their struggle to the Democratic Party, which has played an equally active role in gutting education. Significantly, many of the education jobs that are being eliminated are concentrated among special education teachers, teacher assistants and other support staff, guidance counselors and school nurses. Reduced staffing in these areas has been shown to aggravate the negative impact of cuts to education for those students most in need of support. Additionally, school districts across the country are slashing enrichment programs in areas such as arts and foreign language study.
College student, 20, found dead in dorm room after testing positive for COVID-19 -Bethany Nesbitt, a 20-year old psychology major at Grace College in Winona Lake, Indiana, has become one of the latest young victims of the coronavirus in the US. She was found dead on the morning of Friday, October 30 in her dorm room, after having been sent home from the hospital following a positive COVID-19 test. Bethany, who was in her junior year at Grace College, was the youngest of 9 children from a family in Michigan. She was training to be a Child Life Specialist, a type of health care professional who helps children and families navigate the process of illness, injury, disability, trauma, or hospitalization. A statement from the family, published by her brother on Twitter, noted that she had been quarantined in her dorm room for 10 days at the time of her death. Initially experiencing symptoms in the week of October 20, she took a test for the virus on October 22nd, at which time she began quarantining. The statement notes that the results of that initial test were never delivered due to an unknown clerical error. Bethany, who was asthmatic, worked with her mother and campus health officials to monitor her oxygen saturation levels. On October 26, Bethany experienced a drop in her oxygen saturation and was taken to the emergency room for evaluation. An ER doctor determined that she likely had COVID-19 but felt that it was not a severe case as she seemed to be recovering. She then returned to her dorm room and continued her quarantine. On October 28, Bethany notified her family that her oxygen levels were normalizing and that she had been fever free for 24 hours. On October 29, she was tested again. The statement from her family notes that her improving condition had encouraged her. She watched Netflix that night before retiring to bed. Bethany passed away that night. The results of the second test, positive for COVID, were delivered only after her death. The immediate cause of Bethany’s death was a pulmonary embolism, which is a common cause of death among COVID-19 patients. A pulmonary embolism, according to the Mayo Clinic, is “a blockage in one of the pulmonary arteries in your lungs.” A recent article in Science News cites a new study which suggests that such embolisms in COVID patients may be a product of the body’s immune system attacking the patient’s body rather than the virus itself. The statement from Bethany’s family notes that she had elected to return to Grace College this semester and had been granted a single-person dorm room by the college. Grace College, which is a small, evangelical Christian college, notes on their website that while students are “required to wear a mask at all times in their residence hall,” they have adopted a “floor is family” philosophy. As a result, students residing on the same floor are not required to wear a face mask around each other. Despite this, the statement from Bethany’s family notes that she “was careful. She wore her mask. She socially distanced.”
Here’s how many Covid-19 cases have been reported at NE Ohio colleges – There have been nearly 11,000 Covid-19 cases across 56 Ohio colleges and universities since the start of the pandemic, according to a tracker that has data on schools nationwide.The New York Times has been tracking Covid-19 cases at schools nationwide, and its tracker found that there have been 10,855 cases at Ohio colleges since Oct. 22, the last time the tracker was updated.According to the report, Ohio State University has had 3,350 of those cases, accounting for more than 30% of the total number of cases tracked.Here are some totals for Cleveland-area schools:
- Kent State University – 282
- Ohio University – 519
- Norte Dame College – 16
- John Carroll University – 120
- Case Western Reserve University – 47
- Cleveland State University – 1
For its research, the Times said it tracked every four-year public institution and every private college that competes in NCAA sports. Across those schools, there have been more than 214,000 cases and at least 75 deaths since the start of the pandemic, the Times noted. Most of the deaths were reported in the spring and were college employees, according to the Times. In addition, because the Times’ numbers are cumulative, the data does now show how the virus might be spreading from each campus.
US schools intensify student surveillance in the COVID-19 era – Millions of students participating in online learning are gravely concerned about how schools are monitoring their activity on and off campus and using their data. As technology continues to advance by leaps and bounds, critical issues of privacy, data use and basic democratic rights are being brought to the fore. Just last month, the University of Miami was caught using facial recognition technology to track down students who attended a protest opposing the university’s reckless reopening plans. The university emailed nine students who went to the protest to tell them the dean of students wanted to discuss the “incident” which they had participated in, referring to the small protest. When the students questioned the university dean, Ryan Holmes, as to how the university knew the identity of those involved in the peaceful demonstration, he told them the University of Miami Police Department (UMPD) had helped identify the students via surveillance footage. After a slew of bad press, the university released a short statement denying it uses facial recognition technology. While the university itself may not use the technology, it is evident that the campus police do. In the sheriff’s resume, he states the school utilizes an advanced camera system with sophisticated algorithms for “motion detection, facial recognition, object detection and much more.” This chilling incident raises serious questions regarding the basic democratic rights of students everywhere. The incident in Miami is not an isolated event. Rather, it is part of a broad trend at K-12 schools as well as university campuses throughout the country. In many cases, schools have used the transition to online learning, brought on in response to the COVID-19 pandemic, to intensify the surveillance of students.
A Crushed Student Movement and Shrinking Hope Ahead of Myanmar’s Election – (Reuters) – Myanmar teacher Hnin grew up idolizing Aung San Suu Kyi, the one-time democracy icon who now leads her country. But when voters go to the polls on Sunday for the second general election since the end of military rule, Hnin will not back her. While Suu Kyi’s National League for Democracy (NLD) is expected to win again on the strength of its leader’s enduring popularity, critics such as Hnin say she has failed to make good on promises to unite the country. “I have no more trust in her,” said the 21-year-old of the Nobel peace prize laureate. “The path she is trying to take towards democracy is impossible.” Far from the wave of optimism that greeted the NLD’s landslide win in 2015, Myanmar goes into this election facing a surging coronavirus outbreak, rising economic hardship and escalating civil and ethnic conflicts. Hnin is one of dozens of activists from a student group behind anti-government protests and leaflet campaigns across the country in recent months. The All Burma Federation of Students Union (ABFSU), which urges a boycott of the vote, are a fringe group at the sharp edge of deepening disillusionment in parts of the country. Their campaign has been met with a sharp crackdown. Nine have been sentenced, two of them to five years in prison, for causing public mischief among other charges, while 10 others are in police custody and more than a dozen are in hiding.
Indian Pharma is Being Squeezed – and It’s Bad News for Drug Access in Developing Countries – India’s pharmaceutical industry is renowned for selling medicines to the world at reasonable prices, especially developing countries. This has helped Africa in its fight against HIV/Aids, for instance. Such endeavours have earned India a reputation as the “pharmacy of the world“. Now, the advantages that have enabled India to play this role are in danger of being eroded. Not only would this be bad news for India’s economy, it could make it harder for developing countries to access the medicines they need – threatening the UN Sustainable Development Goals in the process. India is the world leader in generic medicines, which contain the same ingredients as the originator version, and go on the market after the original patent has expired. India’s top pharma firms include Cipla, Aurobindo Pharma, Lupin, Dr Reddy’s Laboratories and Sun Pharmaceutical Industries. One challenge is coming from China, which has increasingly been exporting active pharmaceutical ingredients in recent years. Indian companies have managed to turn this into an opportunity by using these ingredients to supply medicines at reasonable prices while reducing their production costs and R&D spend. But China is also expanding into drug formulations. By our calculations, China’s global share of formulations exports trebled from 0.4% in 2009 to 1.2% in 2018, while India’s doubled over the same period from 1.5% to 3.6%. Remarkably, 36% of China’s exports are to the EU and North America, where regulations are the most stringent, compared to 19% in 2009. Another challenge to India is wealthy countries protecting their pharma industries to ensure drug security. In August, President Trump issued an executive order that called for the elimination of drug imports, both as active ingredients and formulations. France and Germany look to be heading in a similar direction. If the US order is strictly adhered to, it will heavily affect Indian pharma. More than half of India’s pharma sales are from exports, and by our calculations, the US has bought 37% of them over the past three years. Access to the US market is also critical for leading firms to maintain profit margins. COVID-19 underlines India’s importance to developing countries when it comes to drug access. The Serum Institute of India (SII), the world’s largest vaccines producer, is collaborating with the World Health Organization, the COVAX facility of Global Alliance for Vaccines and Immunisation (GAVI), and the Coalition for Epidemic Preparedness Innovations (CEPI) to produce and supply 100 million doses of a COVID-19 vaccine at a maximum cost of US$3 per dose. This is the lowest quoted price in the world for a COVID vaccine, and will see them distributed in low and middle-income countries. By comparison, German biotech firm BioNTech’s deal with US involves a price of US$19.50 per dose, while the Moderna/US deal is set at between US$32 and US$37 per dose.
Soaring Exports of Pakistan’s Information Technology and Pharma Industries Amid COVID Pandemic – Pakistan’s IT exports increased by 44% during the first quarter (July, August and September) of the fiscal year 2020-21, according to a tweet by Razzak Dawood, Special Assistant to Prime Minister Imran Khan. Pharmaceutical exports saw 22.6% increase in the same period over last year. Pakistan’s information technology and pharmaceutical exports are soaring by double digits amid the COVID pandemic, much faster than the overall exports. “I am glad to note that our exports of Telecommunication & IT Services have done very well during the period Jul-Sep of this Financial Year (FY). The exports have grown by 41% to USD 444 million as compared to USD 315 million in the corresponding period in the last FY”, Mr. Dawood tweeted today. In Fiscal Year 2019-20 ending in June, 2020, the Information Telecommunication (IT) and IT enabled Services (ITeS) export remittances surged 23.71% to $1.230 billion from $994.848 million during the same period in the prior year, according to Pakistan Bureau of Statistics as reported by Pakistani media. Pakistan’s pharmaceutical exports have also gotten off to a great start this year, rising 22.6% in Q1 of the fiscal year 2021 to $68.1 million from $55.6 million last year. Export of pharmaceutical products accelerated in September with 57.99% increase from a year earlier, according to the latest data released by the Pakistan Bureau of Statistics. With several major brands moving production to Pakistan amid the COVID19 pandemic, the country’s exports have grown at a faster pace than those of Bangladesh and India, according to Bloomberg News. Pakistan’s total textile shipments rose 7% in September, compared with India’s 6% and Bangladesh’s 3.5%. “Pakistan has seen orders shifting from multiple nations including China, India and Bangladesh,” said Shahid Sattar, secretary general at the All Pakistan Textile Mills Association, in an interview with Bloomberg’s Faseeh Mangi. “Garment manufacturers are operating near maximum capacity and many can’t take any orders for the next six months.”
Germany starts ‘wave-breaker’ shutdown as Europe locks down (AP) – Several European countries are tightening restrictions this week, starting with a partial shutdown Monday in Germany, as authorities across the continent scramble to slow a rapid rise in coronavirus infections that threatens to overwhelm their health care systems. Britain and Austria will follow suit later in the week, closing restaurants, bars and many leisure activities. Italy, Greece and Kosovo also announced new measures. In some places, the new rules – which vary in strictness – are prompting violent protests by people frustrated at once again having to forgo freedoms. But in many, experts are saying they should have come weeks ago – a reflection of the increasingly difficult balance many countries are struggling to strike between controlling the virus and boosting already damaged economies. “We are aware of the frustration, the sense of loss, the tiredness of citizens, also of the anger which is being manifested in these days, by citizens who find themselves living with new limits to their personal freedom,” said Italian Premier Giuseppe Conte, as he defended his government’s decision to order new measures. Restrictions have been slowly ramping up for weeks in many European countries, but virus cases have continued to rise. There was a sign of hope from hard-hit Belgium, however, where a leading virologist said that “the high-speed train is somewhat easing up.” Overall, Europe has seen more than 270,000 confirmed virus-related deaths, according to a tally by Johns Hopkins University. Experts say case and death figures understate the true toll of the pandemic due to missed cases, limited testing and other reasons. In Germany, restaurants, bars, theaters, cinemas, gyms and other leisure facilities closed in a four-week “wave-breaker” shutdown that seeks to force daily new infections back down to manageable levels. Germans have been asked not to travel, and hotels are barred from accommodating tourists. In a worrying sign for a country long praised for its testing and tracing abilities, German officials say they can’t track the source of three-quarters of new coronavirus cases. Health Minister Jens Spahn, who himself caught the virus, says he doesn’t know where he was infected. Chancellor Angela Merkel said the number of COVID-19 patients in intensive care has doubled in 10 days, and the government couldn’t stand by and watch. “The virus punishes half-heartedness,” she said of the new restrictions, telling Germans that “everyone has it in their own hands” to make them a success. “We will do try to do everything politically so that this is limited to November,” Merkel told reporters in Berlin. But she stressed that “we are very much dependent on the majority of people simply being sensible and playing along, and so saving others’ lives.”
German teachers, students and parents oppose keeping schools open as pandemic spreads– The Robert Koch Institute (RKI), Germany’s main disease control agency, reported 17,214 new coronavirus infections on Wednesday. According to statistics from Johns Hopkins University, daily infections in Germany rose well above 19,000 in recent days. In neighbouring Austria, daily infections have risen above 5,000, with hospitals on Monday reporting a 78 percent increase in patients requiring intensive care treatment within a week. In late September, students in Greece occupied over 700 schools to protest the unsafe restart of in-person teaching and demand safe education for all. A few days later, similar nationwide protests erupted in Poland after two teachers and a student died of COVID-19. Students in France have been striking and protesting since Monday against the unsafe return to schools following the end of the autumn holidays. A parent organization in the UK has called a strike for Thursday to oppose the Johnson’s government’s refusal to close schools. Under conditions of an explosion in new infections, which is the direct product of the German government’s deliberate policy of mass infection, strong opposition to keeping schools open is also developing among students, teachers, and parents in Germany. After a rank-and-file safety committee was founded by students in Dortmund in August, students in Karlsruhe and other cities are now calling for such committees to be established and the closure of schools to be organised. There is growing support for the call by the Sozialistische Gleichheitspartei and International Youth and Students for Social Equality (IYSSE) for the building of a network of rank-and-file safety committees and the preparation of a Europe-wide school strike against the policy of mass infection. Tensions are running especially high in Bavaria, where the state government will hold a school conference today with students, parents, and teacher representatives. As in other German states, hardly any local authorities in Bavaria are dividing up classes to keep groups small, even though most regions have a seven-day incidence of 100 infections per 100,000 inhabitants. Even though the RKI published guidelines two weeks ago advising that regular in-person teaching should be halted when infection levels reach such heights due to medical risks, the ministers of education in Germany’s states simply ignored them. In an open letter to the Education Ministry, the Bavarian State Student Council referred to a “grading spree” of up to four tests per week. This puts students “under incredible pressure to perform, which shows no regard for the current situation.”
Teachers strike across France against first day of deadly school reopenings – As schools reopened across France yesterday after the holidays, mass opposition among students and teachers at the Macron administration’s deadly school reopening policy is growing. Assemblies of teachers met at schools yesterday morning and resolved to strike against the lack of safe conditions to prevent the spread of the virus. Images are being widely shared online showing students crammed like sardines into hallways, classes and cafeterias. The government is reopening schools despite a second wave of the pandemic that its own scientific council has warned will likely be larger than the first, which killed more than 30,000 people in France and 200,000 across Europe. More than 37,000 people have now died from the virus in France, with another 416 deaths reported on Monday. A Twitter account reporting on opposition among teachers to the Macron government reported dozens of local strikes by teachers organised in assemblies at schools across France on Monday morning. At the Balzac de Mitry-Mory school, 24 teachers organised to strike at 8 a.m. yesterday. At the Romain Rolland school in Clichy-sous-Bois near Paris, another 22 teachers voted to strike. In the Feyder school in Epinay-sur-Seine near Paris, 47 teachers voted by 100 percent to strike at 8 a.m. Classes were held for 60 students out of 1,600 enrolled. At the Berthelot school in Pantin, north of Paris, 28 teachers resolved to strike against the demand that they return to classes “as though nothing was happening.” At Bachelard school in Chelles, 20 staff lodged their “right to strike” with the direction due to unsafe conditions caused by the pandemic and “non-respect of the health protocol.” At the Jean Jaures school in Clichy, teachers walked out, and the administration told families that the school may be forced to close. At Von Donghen school in Lagny, classes were cancelled after teachers threatened to strike. At the Flora Tristan school north of Paris, half of teachers supported a strike at 8:30 a.m. At the Joliot-Curie school in Nanterre, teachers voted 53-3 for a strike at midday. At the Olympe de Gouges school in Noisy-le-Sec, over 30 teachers voted to strike in the morning. At the Eugene Henaff school in Bagnolet, 18 teachers voted to strike. At the Alice Guy school in Lyon, the student body reportedly refused to enter classes, and there were reports of further strike action by teachers in Montpellier and Marseille, as well. Safety protocols inside schools are essentially non-existent. One teacher writing into Le Monde stated: “I feel humiliated. While in the media there are grandiloquent statements to support our teachers, in reality there is nothing. … The health protocol is the same as before the holidays! The students continue to change between classes, with 30 crammed into a class. We have not received disposable masks since the beginning of the confinement! We have the right to only two masks on Sundays!”
Europe Back In Lockdown Mode – As with the first set of lockdowns in the spring, the restrictions meant to curb the renewed spread of Covid-19 in Europe are happening fast and all at once. Spain and France, where a second wave of infections spread from mid-July, led the way by imposing local lockdowns from early and mid-October, respectively. While France announced a national lockdown to start Friday, Spain’s local solution now includes several major provinces.Germany is following these cues to lock down the country starting Nov. 2 (opting for the national route), and as Statista’s Katharina Buchholz notes, several other European countries followed suit this week – among them Poland, which explicitly does not call its new measures a lockdown while still applying all the hallmark restrictions from restaurant and school closures to cancelling cultural and other events, limiting the number of groups that can meet to five, restricting hotel access and urging people not to travel around the country. Several more countries have introduced curfews to harness the spread of the coronavirus, forbidding their citizens to move around during night hours without a good reason. Spain is imposing this measure nationwide in addition to local lockdowns. Italy recently started to employ a similar approach while adding early closing of restaurants into the mix. Still, opposition to the measures has been fierce in both countries. National curfews are also in place in Slovenia, Slovakia, Cyprus and Hungary, where all bars and restaurants are closed in additionAs with the first wave of lockdowns, enforcement varies significantly between countries, with Germany merely urging residents to stay at home, while more stringent checks are customary in Spain and France. Unlike the first time around, several governments imposing restrictions have said that they are expecting to ease them again rather soon, starting in early December.
Goldman, Deutsche Order UK Staff To Stay Home As European COVID-19 Outbreak Explodes -Just days after Capital One announced that all of its ‘call center’ workers would be allowed to work from home permanently if they so desired, Goldman Sachs and Deutsche Bank have ordered all of their staff in London (and for Deutsche, all staffers in the UK) to work from home until they hear otherwise. Goldman Sachs said only ‘in-office essential’ employees would be allowed to work from its London office after UK PM Boris Johnson announced the new lockdown measures. This represents a remarkable shift from where the bank stood in September, when it started to quietly move staff back to the office.To be sure, Goldman in-office essential employees represents a tiny fraction of the bank’s 5,000 workers in London. Deutsche Bank, on the other hand, has said that employees who are eligible to continue working from DB’s UK offices will receive an email Monday evening with instructions.An internal memo obtained by Bloomberg said only essential workers will be permitted to come to GS’s Plumtree Court building, according to an internal memo. Deutsche Bank also informed staff that only essential employees can work from all the bank’s offices in the UK. Gyms will remain open, for another day, but they will be closed by Wednesday,Goldman, DB and other banks paused plans to bring bankers back to the office in September after outbreaks were discovered on trading floors owned by JPM, Goldman and Deutsche in both New York and London. Before that, JPM CEO Jamie Dimon publicly leaked research from the bank criticizing working from home as a drain on “creative intelligence”displayed by the bank’s younger analysts.
Time to Reset Expectations for World Economy With Virus Untamed – Investors banking on a coronavirus vaccine to save the world economy in 2021 need to temper their ambitions as scientists increasingly warn of a long and difficult road ahead. While drug companies are making progress in the quest to find a cure for a disease that triggered the worst recession since the Great Depression, questions remain about how effective the first wave of vaccines would be, how easy they will be to distribute to more than 7 billion people and then how many will agree to take them. The future for global growth relies on the answers to those questions as a new wave of the pandemic means health fears and government restrictions continue to inhibit daily life and commerce. Even when a successful immunization system does come along, it won’t be an instant economic panacea, says Chris Chapman, a portfolio manager at Manulife Investment, which manages more than $660 billion.”In terms of actually getting back to pre-Covid or trend growth, it could take more than a year,” said Chapman. “The timing of the recovery will be delayed, but there is still expectation of a vaccine at some point next year.”For decades, the world economy relied on central bankers and finance ministers to pull it out of crisis, on the basis that if you pump the right amount of money into an economy, a recovery will eventually follow.This time is different, as investors look to scientists and data from vaccine and treatment trials for signs of hope just as much as they pore over stimulus plans coming out of Washington, Beijing or European capitals. The longer the hunt for an effective vaccine lasts, the weaker economic expansions will be.To be sure, science could yet make major breakthroughs in the near term. If even only a small proportion of the population such as healthcare workers and the most vulnerable are immunized, that could make a big difference to the resumption of everyday life. Savings built up by households and businesses in 2020 could be unleashed in 2021. “There is a fair prospect that by the late spring, vaccines will be available in quantities sufficient to protect the most vulnerable groups,” said Neil Ferguson, an epidemiologist at Imperial College London, and former Covid-19 adviser to the U.K. government. “But at least until then, life will unfortunately remain a balancing act between reopening society and keeping the virus in check.” Scientific hiccups may slow things down too. Johnson & Johnson paused clinical trials of its Covid-19 shot this month after a participant fell ill, weeks after AstraZeneca Plc and the University of Oxford stopped studies for the same reason. Effective treatments that would also help the economic recovery are also a mixed picture. Disappointing trial results this month for the much-hailed drug remdesivir from Gilead Sciences Inc. showed the antiviral treatment doesn’t save the lives of Covid-19 patients, despite U.S. President Donald Trump extolling its benefits. Still, U.S. regulators cleared the drug for use this week and Gilead has challenged the recent findings citing other positive results. Even if an effective vaccine is discovered, the logistics of distribution will still mean disruption to work, travel and leisure will remain, with only a small subset of the population expected to receive a shot in the first instance anyway.
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