Coronavirus Economic Weekly News 10January 2021

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 the coronavirus relief bill and stimulus checks, government funding, the latest employment data, housing market reports, mortgage delinquencies & forbearance, layoffs, lockdowns, and schools, as well as GDP. 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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FOMC Minutes Show Fed Discussing 2013-Like Taper To Bond-Purchases –Two days after Atlanta Fed President Raphael Bostic says the central bank might taper its bond purchases later this year if the distribution of vaccines boosts the U.S. economic outlook.“I am hopeful that in fairly short order we can start to recalibrate,” Bostic said in an interview with Reuters Monday“If we determine things have strengthened appreciably, that we have made significant progress, then we will think about the next appropriate action”But who’s gonna monetize the debt cries Washington? And so, all eyes are on today FOMC Minutes for any signs that The Fed is about to start stealing the jam out of the market’s donut.And so, as we noted above, with a shitload (technical term) of fiscal stimulus delivered and (post-Georgia) teed up for more,will the Fed use these Minutes to preview when the dreaded (hand-off) tapering will happen? Or is the break of the psychological 1.0% yield level have them preferring to keep the dream of Yield Curve Control alive with their signaling from these Minutes?But of course, as the image suggests, Powell has already answered all these questions – they’ll keep rates low and printing billions for longer and longer than you can imagine – which suggests today’s Minutes should be a nothing-burger.Well, first things first, they did mention the taper:A number of participants noted that, once such progress had been attained, a gradual tapering of purchases could begin and the process thereafter could generally follow a sequence similar to the one implemented during the large-scale purchase program in 2013 and 2014.Some participants noted that the Committee could consider future adjustments to its asset purchases – such as increasing the pace of securities purchases or weighting purchases of Treasury securities toward those that had longer remaining maturities – if such adjustments were deemed appropriate to support the attainment of the Committee’s objectives.”But, on the other hand, some suggested extending the duration of their buying: Regarding the decisions on the pace and composition of the Committee’s asset purchases, all participants judged that it would be appropriate to continue those purchases at least at the current pace, and nearly all favored maintaining the current composition of purchases, although a couple of participants indicated that they were open to weighting purchases of Treasury securities toward longer maturities. Primarily in response to the recent favorable news on the development of COVID-19 vaccines, the staff revised up its projection of real GDP growth for 2021 as a whole, as social-distancing measures were expected to ease more quickly than previously assumed. With monetary policy assumed to remain highly accommodative, the staff continued to project that real GDP growth over the medium term would be well above the rate of potential output growth, leading to a considerable further decline in the unemployment rate. The resulting take‑up of labor- and product-market slack was expected to lead to gradually increasing inflation, and, for some time in the years beyond 2023, inflation was projected to overshoot 2 percent by a moderate amount, as monetary policy remained accommodative.

FOMC Minutes: “Uncertainty surrounding the economic outlook” – From the Fed: Minutes of the Federal Open Market Committee, December 15-16, 2020. A few excerpts: Participants continued to see the uncertainty surrounding the economic outlook as elevated, with the path of the economy highly dependent on the course of the virus. The positive vaccine news was seen as reducing downside risks over the medium term, and a number of participants saw risks to economic activity as more balanced than earlier. Still, participants saw significant uncertainties regarding how quickly the deployment of vaccines would proceed as well as how different members of the public would respond to the availability of vaccines. Participants cited several downside risks that could threaten the economic recovery. These risks included the possibility of significant additional fiscal policy support not materializing in a timely manner, the potential for further adverse pandemic developments – which could lead to more-stringent restrictions, more-severe business failures, and more permanent job losses – and the chance that trade negotiations between the United Kingdom and the European Union would not be concluded successfully before the December 31 deadline. As upside risks, participants mentioned the prospect that the release of pent-up demand, spurred by wider-scale vaccinations and easing of social distancing, could boost spending and bring individuals back to the labor force more quickly than currently expected as well as the possibility that fiscal policy developments could see measures that were larger than expected in amount or economic impact. Regarding inflation, participants generally viewed the risks as having become more balanced than they were earlier in the year, though most still viewed the risks as being weighted to the downside. As an upside risk to inflation, a few participants noted the potential for a stronger-than-expected recovery, coupled with the possible emergence of pandemic-related supply constraints, to boost inflation.

Fed returns money to Treasury for terminated emergency programs – The Federal Reserve has returned about $42 billion to the U.S. Treasury, and will soon transfer another $20 billion in excess funds connected to emergency lending facilities that stopped offering new loans last month, the central bank said Thursday in documents posted on its website. The transfers will fulfill the promise made by Fed Chair Jerome Powell on Nov. 20 to comply with Treasury Secretary Steven Mnuchin’s controversial demand that the programs be terminated. The Treasury committed $195 billion from its Exchange Stabilization Fund to provide a backstop for the four programs and had transferred $102.5 billion to the Fed. The programs are retaining about $40 billion to protect against potential losses on the credits the programs extended before their closure. The four programs are the Term Asset-Backed Securities Loan Facility, the Municipal Liquidity Facility, the primary and secondary corporate credit facilities, and the Main Street Lending Program. All except Main Street were closed on Dec. 31. The termination of Main Street was delayed until Jan. 8 to allow time to finish processing a late surge of loan applications.

Rates Are Blowing Out: A 1% Increase In 10Y Yields Will Slash P/E Multiples By 18% As Bloomberg macro technician William Maloney writes this morning, after a lengthy period of meandering, the yield on 10-year U.S. Treasuries spiked above 1.0% and hit 1.052% amid an ascending triangle breakout, signalling a further rise could be on the way. According to Maloney, the breakout could set up a run to 1.09%, which is 76.4% Fibonacci of the March 19 peak to August low. The reason for the breakout, as discussed earlier, is simple: the Docratic blue sweep which now appears likely paves the way for more spending, much more stimulus and a gaping budget deficit, pushing inflation expectations and nominal yields sharply higher. Indeed, long-bond rates were on track for their biggest one-day jump since March’s pandemic-related turmoil and investors have already started to dust off reflation trades in anticipation of a so-called Blue Sweep. “The result will certainly be seen as a driver of higher Treasury yields,” said James Athey, a money manager at Aberdeen Standard Investments. “The reflation trade has already been sparked. The question really is how much further the Senate result will push that.” “I can see 10-year Treasury yields rising to 1.5% to 2% in short order if more and more uncertainty gets behind us,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore. To be sure, while a continuation of the move higher in yields is guaranteed, the reason why markets remain sanguine about a major, VaR-shock inducing move – one which would risk to violent deleveraging among the risk parity funds and hammer risk assets – is because the Fed has previously telegraphed it would step in with some form of Yield Curve Control to prevent just that from happening. But what if the Fed is willing to let yields run? What if inflation is about to be unleashed and the next stop for the 10Y is not 1.50% but 2.0% or even 3.0% or more? What will happen to stocks then? For the answer we go to the latest note from Morgan Stanley’s Michael Wilson, who warned that surging yields is the biggest risk the market is unprepared for, and made some ominous observations. We excerpt them below:

Economists Expect Tough Sledding in Winter, Then a Rebound – WSJ – Headed into 2021, the U.S. faces a surge in coronavirus cases, new restrictions on business,cautious holiday shopping and slowing economic growth. Forecasters anticipate that the Labor Department’s December jobs report, due to be released Friday, will show the labor market closed the year on a weak footing. Economists surveyed by The Wall Street Journal expect to see employers added 68,000 new jobs in December, down from 245,000 a month earlier. That would mark the slowest month of the labor market’s recovery since May.As the Covid-19 pandemic drags into another year, however, economists see several reasons for optimism.First, the recently enacted pandemic-relief legislative package will pump $900 billion into the economy in coming months.Second, with much of the services sector hobbled by the pandemic, Americans have been saving an unusually high share of their income since spring, when the pandemic first prompted widespread restrictions on business activities. The U.S. personal saving rate was 12.9% in November, down from 33.7% in April but still well above the 7.5% rate a year earlier. Many households will be able to draw on those reserves to boost spending once coronavirus-related restrictions ease and vaccinations embolden people to venture out more, according to economists.These two factors together could fuel a resurgence in spending that will jazz the economy in the second half of 2021.Third, borrowing costs are low, and most Federal Reserve officials expect the central bank will hold short-term rates near zero for at least three more years.Goldman Sachs expects U.S. gross domestic product to grow 5.8% in 2021 after contracting 3.5% in 2020. Moody’s Investors Service expects 4.2% growth in 2021.One cloud on the horizon is that the latest coronavirus-relief package might be coming too late to prevent the economy from slowing further in the first quarter of 2021.In a Journal survey of economists last month, forecasters slashed their projections for economic growth and job creation in the first quarter of 2021, but raised them for the second, third and fourth quarters.“I look at 2021 as a critical transition year for the U.S. economy,” said Bernard Baumohl, chief global economist at Economic Outlook Group. He welcomed the new pandemic-relief package, but cautioned that uncertainty remained around the vaccine rollout. He said he expected 2021 “to be a year of adjustment, of adaptation.”Richard Moody, chief economist at Regions Financial Corp. in Birmingham, Ala., said the recovery’s shape would depend on consumers’ psychology, particularly whether and when they feel comfortable going back to spending as they did before the pandemic.Analysts caution that the economy is likely to look different as it emerges from the pandemic, with some crisis-driven shifts proving permanent. Companies are rethinking whether to bring workers back to offices and how much employees need to travel now that teleconferencing is a bigger part of daily life. American consumers have accelerated their embrace of digital shopping, telehealth appointments and online fitness classes while shunning malls, doctors’ offices and gyms.

Business Cycle Indicators, January 4th by Menzie Chinn – With the release of the IHS Markit (nee Macroeconomic Advisers) monthly GDP, key indicators tracked byNBER Business Cycle Dating Committee (BCDC) continue to show mixed behavior. Monthly GDP declined in November (joining personal income ex.-transfers in decline): Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus for employment as of 1/4/2021 (light blue square), industrial production (red), 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, IHS Markit (nee Macroeconomic Advisers) (1/4/2021 release), NBER, Bloomberg, and author’s calculations.The Bloomberg consensus for nonfarm payroll employment for December is for an increase of only 100,000 (that was true when I last checked as well – 12/23).IHS Markit notes:Monthly GDP declined 0.8% in November following a 0.6% increase in October that was revised lower by 0.1 percentage point. The decline in November was the first so far in the recovery and reflected declines in personal consumption expenditures, nonresidential fixed investment, net exports, and nonfarm inventory investment. There were partially offsetting increases in residential investment and the portion of monthly GDP not covered by the monthly source data. NY Fed nowcast as of 12/31 is for 2.1% in Q4, and Atlanta Fed GDPNow as of 1/4 is for 8.6%. The IHS Markit forecast as of today is 3.0%, implying a further 0.4% (nonannualized) decline in December.

Seven High Frequency Indicators for the Economy – These indicators are mostly for travel and entertainment. 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 January 3rd. The seven day average is down 53.0% from last year (47.0% of last year). 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 January 2, 2020. This data is “a sample of restaurants on the OpenTable network across all channels: online reservations, phone reservations, and walk-ins. Dining picked up during the holidays. Note that dining is generally lower in the northern states – Illinois, Pennsylvania, and New York. Note that California dining is off sharply with the orders to close. 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 December 31st. Movie ticket sales have picked up slightly over the last couple of months, and were at $28 million last week due to Wonder Woman 1984 (compared to usually around $400 million per week at this time of year). This graph shows the seasonal pattern for the hotel occupancy rate using the four week average. The red line is for 2020, dash light blue is 2019, blue is the median, and black is for 2009 (the worst year since the Great Depression for hotels – prior to 2020). This data is through December 26th. Hotel occupancy is currently down 33.0% year-over-year. 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 December 25th, gasoline supplied was off about 9.3% YoY (about 90.7% 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 January 1st 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 43% of the January level. It is at 30% in Chicago, and 49% in Houston – and mostly trending down over the last few months (with dips on holidays like Thanksgiving and Christmas). Here is some interesting data on New York subway usage. This graph is from Todd W Schneider. Schneider has graphs for each borough, and links to all the data sources.

Mitch McConnell’s House Vandalized Over $2,000 Checks – Senate Majority Leader Mitch McConnell had his home vandalized this week, after blocking the vote to increase stimulus payments to $2,000. Messages like ‘WERES MY MONEY’ and ‘MITCH K1LLS THE POOR.’ were spray-painted on the building. Police said that they don’t have any suspects. On Saturday, McConnell released a statement to the Louisville Courier Journal which read: “Vandalism and the politics of fear have no place in our society. My wife and I have never been intimidated by this toxic playbook. We just hope our neighbors in Louisville aren’t too inconvenienced by this radical tantrum.” In 2015, Time listed McConnell as one of the 100 most influential people in the world. McConnell is the longest-serving U.S. senator for Kentucky in history, and the longest-serving leader of U.S. Senate Republicans in history. During the Trump administration, Senate Republicans, under McConnell’s leadership, broke records on the number of judicial nominees confirmed. Among those nominees were Neil Gorsuch and Brett Kavanaugh who were recently confirmed to the Supreme Court. McConnell’s critics have called him by a variety of different nicknames, including “Moscow Mitch”, “Cocaine Mitch”, the “Grim Reaper”, “Darth Vader”, “Rich Mitch”, “Nuclear Mitch”, and “Midnight Mitch.” On some occasions, he has even embraced these nicknames, although he was apparently unhappy with the more recent “Moscow Mitch.” McConnell has a net worth of $35 million dollars, and many Americans feel that he is out of touch. He isn’t the only US politician that was a target for vandalism this week. According to a report from TMZ this week, House Speaker Nancy Pelosi had her house vandalized with a pig’s head and fake blood. Spray painted in black on the white garage door were the messages “$2K,” an apparent reference to the $2,000 COVID stimulus checks that have been held up in the U.S. Senate, as well as “CANCEL RENT!” and “WE WANT EVERYTHING!”

Biden stimulus plan: $2,000 stimulus checks and unemployment benefits – The Washington Post -President-elect Joe Biden said Friday he is assembling a multitrillion-dollar relief package that would boost stimulus payments for Americans to $2,000, extend unemployment insurance and send billions of dollars in aid to city and state governments, moving swiftly to address the nation’s deteriorating economic condition and the rampaging pandemic. The package will also include billions of dollars to improve vaccine distribution and tens of millions of dollars for schools, as well as rent forbearance and assistance to small businesses, especially those in low-income communities, Biden said at a news conference in Wilmington, Del.“We need to provide more immediate relief for families and businesses now,” Biden said. “The price tag will be high,” he said, adding, “The overwhelming consensus among leading economists left, right and center is that in order to keep the economy from collapsing this year, getting much, much worse, we should be investing significant amounts of money right now.” Biden said he would lay out the package in more detail next week. It would build on some $4 trillion in economic assistance Congress has already devoted to battling the devastating pandemic, including a $900 billion package President Trump signed into law last month. Discussions were getting underway in earnest with Democratic leaders on Capitol Hill, with Biden aiming to move the package to a vote as quickly as possible. But in an early sign of the challenges Biden may face in getting his agenda through Congress, even with both chambers controlled by Democrats, Sen. Joe Manchin III (D-W.Va.) expressed skepticism Friday about the benefits of a new round of stimulus checks. “I don’t know where in the hell $2,000 came from,” Manchin said. “I swear to God I don’t. That’s another $400 billion dollars.” Manchin initially seemed to suggest in an interview with The Washington Post that he was “absolutely” opposed to a new round of checks. He clarified in a follow-up interview that he could potentially support more checks if they were narrow in scope and targeted for people who really need them. Manchin also said that the first priority needed to be on getting people vaccinated, not sending out checks. “If they can direct money and they say, ‘This will help stimulate the economy,’ hell yeah I’m for it,” Manchin said. “But basically right now, you better get them vaccinated.” Biden has made new stimulus checks a central promise, specifically telling Georgia voters that they would be getting $2,000 payments if Democrats won Senate runoff elections in the state this week.

Top House Appropriations Republican tests COVID-19 positive -Rep. Kay Granger (Texas), the top Republican on the House Appropriations Committee, announced on Monday that she tested positive for COVID-19 after arriving in Washington for the start of the new session of Congress. Granger’s positive test came after she received her first dose of the Pfizer-BioNTech COVID-19 vaccine that the Capitol physician began distributing to members of Congress last month. Granger was tested for COVID-19 on Sunday and is not feeling symptoms, according to her spokesperson. “When she arrived in DC for the beginning of the 117th Congress, Congresswoman Kay Granger was tested for coronavirus in accordance with the Attending Physician’s guidance for Members when traveling from their home state. She was later notified that she tested positive and immediately quarantined. Having received the vaccine in December, she is asymptomatic and feeling great! She will remain under the care of her doctor,” Granger spokesperson Sarah Flaim said in a statement. Before learning of her positive test, Granger participated in House floor votes on Sunday, including the Speaker election. Members of Congress are advised to be tested for COVID-19 upon arrival in Washington, but can still go about their regular business while awaiting their results if they don’t have symptoms or any known exposure to the virus. The Capitol’s testing system provides results within one day at the most, although often in a matter of hours. The Pfizer-BioNTech vaccine is shown to provide some protection against COVID-19 about 10 days after receiving the first dose, but the second dose provides a longer-term boost. Pfizer has said that the vaccine efficacy after the first dose is about 52 percent, but it goes up to 95 percent after the second dose – which is administered three weeks later.

GOP Rep. Kevin Brady tests positive for COVID-19 –Rep. Kevin Brady (R-Texas) announced Tuesday that he tested positive for COVID-19, becoming the latest in a growing list of lawmakers to contract the virus. Brady said the House physician told him Tuesday night that he contracted the coronavirus and that he must now in quarantine. He added that he received the first dose of the Pfizer vaccine on Dec. 18 and last tested negative for the coronavirus on Jan. 1. The lawmaker said he would receive treatment Wednesday, though he did not clarify what that treatment will be. Brady is the second House member in as many days to test positive for COVID-19 after receiving the first dose of the Pfizer-BioNTech COVID-19 vaccine. Rep. Kay Granger (Texas), the top Republican on the House Appropriations Committee said Monday that she has the coronavirus. Data has shown that the Pfizer-BioNTech vaccine provides some protection against COVID-19 about 10 days after receiving the first dose, but recipients get a more significant boost after receiving their second dose three weeks later. Pfizer has conceded that its vaccine’s efficacy sits around 52 percent after just the first dose but jumps to 95 percent after the full regimen is complete. Lawmakers have been advised to get tested for the coronavirus when coming back to Washington but are allowed to perform their duties while they wait for the results if they are asymptomatic or have not come into contact with someone who knows they have the virus. It was not immediately clear where Brady contracted the virus, but lawmakers were seen crowding on the House floor Sunday during an unexpected floor vote. That development sparked a stern rebuke from Speaker Nancy Pelosi (D-Calif.), who sent a letter to lawmakers reminding them of social distancing guidelines. At least 49 members of Congress or lawmakers-elect have tested positive for COVID-19 since March. A number of others have tested positive for antibodies or had presumed cases.

COVID-19 relief bill: A promising first act for immigration reform – On Sunday evening, President Trump signed into law the $900 billion coronavirus funding package that would provide, among other relief measures, stimulus checks to over 3 million U.S. citizens who were previously denied because they married or have a parent who is an undocumented immigrant. This victory proves that even in a horrible political environment, bipartisan solutions to our nation’s immigration challenges are possible, setting a launch pad for common sense immigration solutions for the new year. The new bill ends a damaging marriage penalty and allows payments of $600 for an individual U.S. citizen and $600 for each dependent child in households with an undocumented spouse. The new bill also allows families to recover the covid relief check denied in the first round of stimulus payments – $1,200 for each U.S. citizen taxpayer and $500 for each U.S. citizen child – when they file their 2020 taxes in the spring. A broad, bipartisan coalition of advocates together with a coalition of bipartisan Congressional leaders made this win possible. Sen, Marco Rubio, a Republican from Florida, Democratic Leader Chuck Schumer of New York, Republican Sen. John Cornyn of Texas, Republican Sen. Susan Collins of Maine, Democratic House Speaker Nancy Pelosi and Sen. Ron Wyden, need to be thanked The American Business Immigration Coalition (ABIC) joined advocates New York Immigration Coalition, National Immigration Law Center, Catholic Conference of Bishops, SEIU, and Mixed Status Families United among many others to correct this unfair and unkind mistake. As COVI9-19 infections surge across the country, choking the economy, the new Covid funding package will offer a life-line to more households without a punishing immigration marriage penalty. Ending this discrimination is rare progress on immigration issues under President Trump. This promising bipartisan leadership is the kick-off for immigration solutions in 2021. Similar to stimulus checks for mixed status households, a path to legalization is popular among American voters. Despite – or perhaps because – of Trump’s efforts to limit immigration and denigrate immigrants, American support for immigration has soared to historic highs. For the first time since such polls were conducted in 1965, Americans want more, not less, immigration.

Attorney says census count to determine congressional seats won’t be done until February – An attorney in President Trump’s administration said Monday that the census count to determine how many congressional seats each state gets will not be completed until February. John Coghlan, a deputy assistant attorney general, said during a California court hearing that the Census Bureau has discovered new irregularities in its data, which is expected to delay the delivery of the data until after President-elect Joe Biden takes office, The Associated Press reported. The postponement of census data delivery beyond Inauguration Day would dash Trump’s efforts to remove undocumented immigrants from the final count for states, thus reducing their representation in the House and their portion of allocated federal funding. Coghlan, who spoke during a hearing for a federal lawsuit in San Jose, Calif., noted the numbers may not be finalized until later than the current Feb. 9 goal, adding that, “It’s a continuously moving target,” according to the AP. This year marked the first time the Census Bureau missed its end-of-year deadline to complete its data finalization after its processing time was halved because of an extended collection period due to the COVID-19 pandemic. The census collection was originally scheduled to be completed at the end of July before the deadline was moved to the end of October. The bureau had requested for the data processing deadline to be extended to April 2021, but the matter stalled in the GOP-controlled Senate.

While All Eyes Were On Washington, Daily Coronavirus Deaths Set Another Record – WHILE turmoil enveloped the U.S. Capitol on Wednesday, the coronavirus was claiming more American lives in one day than ever before.Data from Johns Hopkins University showed that 3,865 people died on Wednesday, breaking a record set just a day earlier. The death toll in the U.S. exceeds 362,000, and experts expect it to get worse following holiday season travel.The Centers for Disease Control and Prevention on Wednesday updated its death forecast to predict that mortalities could grow to 438,000 before the end of January. If that number plays out, the U.S. could lose roughly 76,000 more lives to the virus in the next roughly three weeks.New York, Texas, California and Florida report the highest death tolls. They also report the highest infection numbers.But deaths and cases are increasing almost everywhere, and concern is mounting over a new variant that is likely more transmissible. At least 52 cases of the strain first identified in the U.K. have been reported in the U.S., according to data posted Wednesday by the CDC. Some hospitals are growing overwhelmed, with a record 132,476 patients currently admitted with the virus across the country.

World’s richest people added $1.8T to their combined wealth in 2020 – The world’s 500 richest people added approximately $1.8 trillion to their combined wealth in 2020, bringing them to a total net worth of $7.6 trillion, according to the Bloomberg Billionaires Index. Bloomberg noted that the 31 percent increase, which came even amid the economic crisis spurred by the coronavirus pandemic, is the largest annual gain in the index’s eight-year history. The growth mainly reached those at the very top, where five people now each hold more than $100 billion, with another 20 individuals each worth at least $50 billion. At the top of Bloomberg’s index is Amazon founder and CEO Jeff Bezos with approximately $190 billion. The tech company profited highly amid the pandemic as lockdowns and health restrictions forced more people to turn to online shopping. Tesla founder and CEO Elon Musk saw the greatest wealth increase in 2020, which Bloomberg reported was potentially the fastest wealth creation in history. Now worth $170 billion, Musk first surpassed Microsoft co-founder Bill Gates for the title of second-richest person in the world in November. Musk’s increase in wealth was largely driven by Tesla, which as of Saturday has a market value of nearly $670 billion. About three-fourths of Musk’s net worth is made up of Tesla shares. Bloomberg reported that, combined, Bezos and Musk had an increase in wealth of about $217 billion in 12 months, which is roughly enough to send $2,000 checks to more than 100 million Americans. Gates now takes the third spot with a total net worth of about $132 billion, while Bernard Arnault, chairman and CEO of LVMH Moët Hennessy Louis Vuitton, holds fourth place with $114 billion. Facebook founder and CEO Mark Zuckerberg is the fifth-richest person in the world with a net worth of about $104 billion.

U.S. bankruptcy filings hit 35-year low thanks to government pandemic aid (Reuters) – U.S. bankruptcy filings for 2020 hit their lowest level since 1986 as a flood of government support programs offset at least temporarily the full brunt of the coronavirus pandemic and a related recession, Epiq AACER reported on Friday. The firm’s compilation of bankruptcy cases showed the Chapter 11 filings used to reorganize larger businesses still jumped 29% in 2020 to 7,128, compared to 5,158 in 2019, a tally that included major retailers like J.C. Penney driven under by the biggest economic downturn in a century. But overall filings, including all personal and other business bankruptcies, for the year were 529,068, compared to nearly 800,000 annually in recent years, and triple that in 2010 at the end of the last recession. The low level of bankruptcies has been one of the more perplexing dynamics of a pandemic era that has seen millions of jobs destroyed, record numbers of people collecting unemployment insurance, and small businesses forced to close to combat the spread of the coronavirus. Government unemployment insurance, business loans and other programs ended up replacing much of that lost income, pushing savings to record levels and keeping households and businesses afloat — at least for now. A further $900 billion recently approved by Congress may continue to push a full reckoning down the road. But Epiq AACER Senior Vice President Chris Kruse said in a press release he expects household and other non-commercial filings “to grow substantially in the second half of 2021,” as government programs end and debts from the last few months come due. Though many households used government stimulus or increased unemployment benefits to pay down debts, for example, others are wracking up obligation by delaying rent and mortgage payments.

IRS blesses tax breaks on forgiven PPP loans after law change – The U.S. Internal Revenue Service will allow businesses that got their Paycheck Protection Program loans forgiven to write off expenses paid for with that money, shifting policy after Congress passed new legislation last month. IRS guidance issued on Wednesday overrides previous rules that recipients of PPP loans that had been forgiven couldn’t claim deductions for the wages, rent, utilities and other expenses covered by the loans. The change came after a bipartisan move in Congress to clarify that business owners should be eligible for those tax breaks. The recent stimulus legislation updated the CARES Act passed in March to “say that no deduction is denied, no tax attribute is reduced, and no basis increase is denied by reason of the exclusion from gross income of the forgiveness of an eligible recipient’s covered loan,” the IRS said in a statement. The change is widely regarded as a victory for small businesses, which can use tax-free money to generate more breaks, something that’s typically prohibited under the tax code. Lawmakers said allowing the deductions was necessary to keep small businesses afloat amid waves of restrictions and weakened consumer spending resulting from the coronavirus pandemic. Some firms could pay a negative tax rate on their PPP money – meaning the tax benefits outweigh the amount of their loan. For business owners paying the top tax rate, it generally means they could save as much as $37 on their taxes for every $100 of tax-free PPP money they received. The new guidance from the IRS stretches the money received from the government even further, said Lisa Zarlenga, a partner at the law firm Steptoe & Johnson. “The PPP loan proceeds are free, if they’re forgiven, effectively – so it’s it’s a good benefit,” Zarlenga said. Many small businesses expected to be able to claim the deductions based on the original Cares Act language, said Andrew Gibson, a managing partner at the accounting firm BDO. Lawmakers made it clear that their intent was for companies to claim the deductions after the IRS said that they wouldn’t allow the tax breaks, he said. But IRS officials said they couldn’t update their guidance based on intent – they needed a law change, so the issue sat unresolved for months until it was included in the December stimulus legislation.

More incentives for smaller lenders in next PPP round – Lenders now have more clarity in advance of the Paycheck Protection Program’s reopening. The Small Business Administration released new guidance for PPP late Wednesday, putting considerable emphasis on helping smaller lenders and borrowers. The new version of the program, which received $285 billion in funds from the most recent stimulus package for new and existing PPP borrowers, is expected to begin next week. The SBA, which is administering the program with the Treasury Department, will grant community development financial institutions and minority depository institutions exclusive access to the PPP portal for at least the first two days. It said that through its online Lender Match tool it plans to connect borrowers to “small lenders who can aid traditionally underserved communities,” and that its portal will have dedicated hours to assist the “smallest PPP lenders.” A big reason for the guidance is to help “ensure increased access to PPP for minority, underserved, veteran, and women-owned business concerns,” the agency said. An interim final rule issued by the SBA increased the lender fees for loans of less than $50,000 by removing the 5% cap that existed previously – a move aimed at incentivizing lenders to work with smaller borrowers. The window to have loans approved is set to close on March 31. Loans made this time around have five-year maturities. The program sets aside $15 billion for lenders with less than $1 billion of assets and another $15 billion for those with less than $10 billion of assets. The SBA also included an optional demographic reporting section on the borrower application, noting that it wants lenders to encourage borrowers to fill it out to improve “efforts to reach underserved, minority-owned, veteran-owned and women-owned businesses.”

Uncertainty looms over PPP’s relaunch – Lenders, while generally supportive of the Small Business Administration’s restart of the Paycheck Protection Program, have a number of unanswered questions about how it will operate. The SBA, which issued more than 120 pages of rules and guidance late Wednesday, is getting high marks for prioritizing underserved and marginalized groups. But concerns remain over the application process, particularly for existing PPP participants seeking a second loan, and verifying that a borrower qualifies. “The biggest unknown right now how will applications will be submitted,” said Mark Marionneaux, CEO of Bank of Zachary, a $299 million-asset community development financial institution in Louisiana. “There seems to be some chatter that there will be a different application portal this time around … similar to the forgiveness portal,” Marionneaux added. “Will second-draw loans use a different portal from new loans, or will they both be on a new portal?” “We have some unknowns still,” said Chris Albrecht, director of SBA at Sunrise Banks, a $1.4 billion-asset CDFI in St. Paul, Minn. “We have yet to see an application and have yet to get confirmation on what the portal will look like. But we’re working diligently to make sure we’re prepared.” An SBA spokesman said Friday that “all indications” are that lenders will use the agency’s E-Tran platform to process applications and that a standard form was made available for download earlier this week. The SBA will start accepting new applications on Monday and requests for second draws two days later. CDFIs and minority depository institutions – which senior government officials said make up about a tenth of all participating PPP lenders – will have an exclusive two-day window to process new PPP applications on Monday. While other lenders might be added on Wednesday, there is a possibility that the SBA will extend the exclusivity period for CDFIs and minority depository institutions. The goal is to process more applications for minority- and women-owned businesses, among other groups overlooked during the PPP’s initial phase. Though the inclusionary effort was well received, lenders are still waiting on the application forms.

We Are the Main Event– ON DECEMBER 21, Congress finally passed a $900 billion Covid-19 relief bill that had laboriously heaved itself through a thicket of partisan ratfucking. While it fell far short of what’s actually needed to help alleviate the widespread suffering that the government’s botched response to the pandemic has inflicted upon the population, there were a few bright spots to be gleaned from its thousands of overstuffed pages. For one, the extension of the Payroll Support Program will provide funds to pay furloughed flight attendants, reservations agents, and pilots for several more months, and provide back pay to those who have been left in the lurch since October. Sara Nelson, international president of the Association of Flight Attendants-CWA, has heralded this as a much-needed win and is particularly proud of the terms that she and her members set. The deal isn’t perfect – she points to the loss of overtime hours, which means that workers will be making a bare minimum – but it’s a badly needed safety net for the thousands of members she represents, over thirty thousand of whom were furloughed when the program initially expired in September. Unlike the broader Payroll Protection Plan, whose funds have been siphoned off every which way by various government officials and Trump lackeys, the PSP money has plenty of strings attached; among other stipulations, it can only be used for worker pay and benefits, furloughs and separations are prohibited, reductions to worker hourly rates of pay are prohibited, and executive compensation has been capped for two years beyond its expiry. In short, it puts the workers first, and as Nelson told me in a recent phone interview, she considers it an exciting blueprint for other unions to follow in the struggles to come. “We do everything, we create all the value – we say these things, right, but we have to internalize it,” she says. “We said, we’re not going to give you a set of standards that we hope that you can put in the labor section of the bill. No, we were the bill.” One thing to remember about Sara Nelson is that she can be as polite as she is passionate, and that chimeric quality has served her well during years of knock-down, drag-out battles with airline executives, bad bosses, and government officials. As she once told me, “I can rock a string of pearls, or be the hellraiser on the picket line.” Though she kept mum about any specific plans (including that upcoming vacancy at the top of the AFL-CIO . . . ), Nelson had a lot to say about the struggles ahead, the life-or-death importance of organizing, and what labor can expect from a Biden presidency. If she has her way, Nelson – and the rest of us, too – are going to be spending 2021 raising a whole lot of hell. The following conversation has been condensed and edited for clarity.

‘COVID, COVID, COVID’- Pandemic set to dominate ’21 banking agenda on Hill – As the coronavirus continues to exact a heavy toll on the nation, bankers can expect lawmakers on the House and Senate banking committees to maintain their focus in 2021 on mitigating the economic effects of the pandemic. To be sure, the legislative agenda for financial services will be significantly affected by Tuesday’s critical runoff elections for the two Senate seats from Georgia, which will determine if the Republicans or Democrats control the chamber. But regardless of the outcome, observers say the pandemic will likely consume the majority of lawmakers’ attention in the new year. COVID-19 “really turned the priority list upside down in March,” said James Ballentine, executive vice president for political affairs and congressional relations at the American Bankers Association. “Certainly there were issues that we were pursuing. … Not that we and Congress can’t walk and chew gum at the same time, but it required a real myopic focus on addressing what was going on with the world and how the banks could help.” The industry may continue to pursue non-pandemic legislative priorities, such as a bill making it easier to provide banking services to marijuana businesses and further reforms to the anti-money-laundering framework. And banks will have a vested interest in the Senate confirmation process for regulators chosen by the incoming Biden administration.But bankers’ wish lists will likely take a backseat to continued debates about pandemic relief programs like the Paycheck Protection Program. And with the nation focused on vaccination programs and the alarming virus caseloads and death rates, banking policy generally will likely be low on Congress’s and the Biden administration’s agenda. In 2020, banks did win notable regulatory relief in Congress’s pandemic relief packages, most recently in provisions related to troubled debt restructurings and the compliance deadline for the Current Expected Credit Losses accounting standard. And the industry’s biggest legislative victory was reform of shell-company rules – shifting beneficial-owner reporting requirements away from banks – in a defense authorization bill. But the focus on the pandemic in the new year means bankers probably won’t win more sweeping reg relief from Congress in 2021. That said, they also likely will avoid any new regulations imposed by lawmakers, even if Democrats seize the Senate majority. If lawmakers are able to enact any meaningful change in financial policy, it would likely have to be on reforms with support from both parties. “I don’t think the filibuster is going to be threatened. You are still going to need 60 votes. There’s still going to be incredibly tight ratios in the committees. If anything it hopefully forces people to work more closely together.”

Q4 2020 Update: Unofficial Problem Bank list Increased to 65 Institutions – The FDIC’s official problem bank list is comprised of banks with a CAMELS rating of 4 or 5, and the list is not made public (just the number of banks and assets every quarter). Note: Bank CAMELS ratings are also not made public. CAMELS is the FDIC rating system, and stands for Capital adequacy, Asset quality, Management, Earnings, Liquidity and Sensitivity to market risk. The scale is from 1 to 5, with 1 being the strongest. As a substitute for the CAMELS ratings, surferdude808 is using publicly announced formal enforcement actions, and also media reports and company announcements that suggest to us an enforcement action is likely, to compile a list of possible problem banks in the public interest. Here is the unofficial problem bank list for Q4 2020. Here are the monthly changes and a few comments from surferdude808: Update on the Unofficial Problem Bank List through December 31, 2020. Since the last update at the end of October 2020, the list increased by one to 65 institutions after one addition. Assets increased by $1.5 billion to $58.2 billion, with $1.3 billion of the increase from updated asset figures through September 30, 2020. A year ago, the list held 67 institutions with assets of $51.1 billion. Added this month was the Business Bank of Texas, N.A., Austin, TX ($115 million). On December 1, 2020, the FDIC released third quarter results and an update on the Official Problem Bank List. In that release, the FDIC said there were 56 institutions with assets of $53.9 billion on the official list, up from 52 institutions with assets of $48.1 billion at the second quarter of 2020. With the conclusion of the fourth quarter, we bring an updated transition matrix to detail how banks are transitioning off the Unofficial Problem Bank List. Since we first published the Unofficial Problem Bank List on August 7, 2009 with 389 institutions, 1,768 institutions have appeared on a weekly or monthly list since then. Only 3.7 percent of the banks that have appeared on a list remain today as 1,703 institutions have transitioned through the list. Departure methods include 1,003 action terminations, 411 failures, 270 mergers, and 19 voluntary liquidations. Of the 389 institutions on the first published list, only 3 or less than 1.0 percent, still have a troubled designation more than ten years later. The 411 failures represent 23.2 percent of the 1,768 institutions that have made an appearance on the list. This failure rate is well above the 10-12 percent rate frequently cited in media reports on the failure rate of banks on the FDIC’s official list.

Tax hikes, tough regulators: What Democratic sweep may hold for banks – Bankers should brace for stricter congressional scrutiny, tax increases and more progressive regulators now that Democrats have gained control of the Senate, according to industry analysts. With Democratic wins called in both runoffs in Georgia, the chamber will be split 50-50 between Democrats and Republicans, with Kamala Harris holding the tiebreaker once she is sworn in as vice president. Democrats will maintain a majority in the House, too. While the coronavirus pandemic is expected to consume much of lawmakers’ attention, their agenda will likely include legislation to promote financial inclusion, ensure the financial system is safe from climate-change risks and reform the credit reporting industry. Banks are also expected to face tougher oversight from Congress, with Rep. Maxine Waters, D-Calif., and Sen. Sherrod Brown, D-Ohio, setting the priorities of the banking committees. Moreover, President-elect Joe Biden is expected to have a much easier time getting nominees confirmed to regulatory agency posts since his party will control the Senate. “Banks were one of the primary beneficiaries of the Trump administration given the reduction in corporate taxes and the deregulatory agenda,” Isaac Boltansky, an analyst at Compass Point Research & Trading, said in a research note Wednesday. “Under a Democratic-sweep scenario, banks would face higher corporate taxes and a less hospitable regulatory environment, but the timing, prioritization and magnitude of these changes are relatively nuanced.” Banks can expect more aggressive enforcement from the Consumer Financial Protection Bureau, as well as other regulatory agencies, as Biden will have more freedom to pick liberal policymakers to lead the agencies. “Biden should have an easier time getting his choices confirmed to top jobs,” Jaret Seiberg, an analyst at Cowen Washington Research Group, said in a note Wednesday. “It also means a crusading progressive should end up in charge of the CFPB, which means more enforcement and regulatory risk for auto lenders, servicers, mortgage originators, credit card lenders, payday lenders and debt collectors.” Biden, in wide-ranging policy documents published over the summer, also suggested increasing corporate income taxes and potentially imposing a financial crisis responsibility fee for banks.

Top U.S. banks’ tax bill would rise $11 billion with Biden hike – After three years of savings, top U.S. banks could face an increased tax bill of as much as $11 billion a year if President-elect Joe Biden moves forward with corporate rate hikes he campaigned on. That would follow $42 billion of savings by the six biggest banks thanks to outgoing President Trump’s 2017 tax cuts, which have boosted their bottom line by more than 10% over the past three years. While the tax hike – which is probable, though not assured, given Democrats’ narrow control of Congress – would hurt bank earnings, other measures taken by the incoming administration could help counter the increase. Further fiscal stimulus to boost an economic recovery, causing borrowing costs to rise slightly, would be a positive for banks weighed down by historically narrow interest rate margins. “A tax increase would be a very concrete negative for banks,” said Mike Mayo, an analyst at Wells Fargo. “But you have to think of low interest rates as an implicit tax on banks, and that’s much bigger than the impact of potential tax-rate hikes. So anything that pushes rates up is good for banks.” Banks benefited more than other industries from Trump’s tax cuts because their effective rates are always much closer to the headline figure as they, unlike companies in other industries, can’t benefit from most deductions. When the corporate tax rate was 35%, the biggest banks paid an average of 30%, while the average for non-financial companies was 14%. When it was cut to 21% by Trump, banks’ effective rate dropped to 19%. Biden has said he’d increase the corporate rate to 28%.A representative for Biden’s transition team didn’t immediately respond to a request for comment. Biden has said he likely won’t pursue tax increases until 2022 at the earliest given the ongoing pandemic and economic fallout. This week’s Georgia runoff elections gave Democrats half the Senate’s 100 seats, meaning the vice president would have to break a tie. While 60 votes are ordinarily needed to pass legislation, Biden could turn to the budget reconciliation process, which Republicans used to pass Trump’s tax law. Democrats also lost House seats in November’s election, narrowing their margin of control there. “Given the razor-thin margins in the House and Senate, centrist Democrats will be the ones with the leverage and will dictate what will happen on taxes and other legislative efforts,” said Brian Gardner, Stifel Financial’s chief Washington policy strategist. “Biden can’t get to 28%, but maybe to 24% to 25%, if he can get the centrists to go along with a hike at all.” The six biggest banks are on track to save $10 billion on their 2020 tax bill, based on analysts’ estimates for fourth-quarter earnings. Firms start reporting results for the period on Jan. 15. Their savings will be lower for 2020 than in previous years because their profits were cut by surging provisions for bad loans as the pandemic hurt the economy. This year, pretax income for the group is expected to rise by 36%, according to estimates compiled by Bloomberg. Next year, they could fully recover ground lost during the pandemic, some analysts estimate. “Banks were among the biggest beneficiaries of the corporate tax cut,” said Jason Goldberg, an analyst at Barclays. “And higher rates will cut into their profit, just like it would for other U.S.-based companies. But, at the end of the day, the most important thing for banks is the health of the economy.”

Lenders to small landlords brace for credit losses – Dawn Garza, a landlord and small-business owner in San Antonio, is hoping to get a second loan from the Paycheck Protection Program to cover her property taxes due at the end of January. She’s short because business is down, and she gave her tenants – one a student and part-time restaurant worker, and the other an out-of-work hairdresser who is recovering from COVID-19 – a three-month break on rent this year. “I am not going to ask for back rent because I know it’s impossible for them,” Garza said. The stimulus package enacted in December extended the Centers for Disease Control and Prevention’s moratorium on evictions through Jan. 31 and granted renters other relief. But for many landlords the mortgage payments are still due, a reality that translates into a looming credit risk for banks. About 1.6% of an estimated $1.6 trillion market for mortgages on 1- to 4-unit properties were delinquent in November, holding steady from the previous month, according to the Mortgage Bankers Association. But delinquencies are expected to climb. Chris Nichols, chief strategy officer for the nearly $19 billion-asset CenterState Bank in Winter Haven, Fla., said banks have been working closely with landlords to restructure their debt and provide forbearances, but this relief will expire soon and is a concern. Defaults on rental properties are typically caused by mismanagement or economic downturns that are easier to gauge. “Since none of us have been through a pandemic this large before, there is no playbook and few alternatives,” Nichols said. Nichols estimates that banks will see a peak in these delinquencies in the fourth quarter of 2021. The delinquency rate could climb a full percentage point to the mid-2% range in some markets like New York and Chicago, Nichols said, and lenders could be dealing with these problem loans for up to two years. “Small landlords are getting hit hard with no real way out of the problem until the pandemic ends,” Nichols said.

MBA Survey: “Share of Mortgage Loans in Forbearance Remains Flat at 5.53%” — Note: This is as of December 27th. From the MBA: Share of Mortgage Loans in Forbearance Remains Flat at 5.53%: The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance remained unchanged relative to the prior week at 5.53% as of December 27, 2020. According to MBA’s estimate, 2.7 million homeowners are in forbearance plans. … The share of loans in forbearance remained relatively unchanged in the final two weeks of 2020, maintaining the trend of hovering around 5.5 percent for the last two months. However, the share for Ginnie Mae loans continues to inch up and is now at its highest level since the week of November 1st,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Forbearance requests and exits both slowed markedly, and servicer call volume dropped sharply over the holidays.” Fratantoni continued, “While the increasing number of COVID-19 cases continues to slow economic activity, the passed stimulus legislation should provide financial support for many households as the vaccine rollout commences.” 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 generally been trending down. The MBA notes: “Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week from 0.10% to 0.06%, the lowest level since the week ending March 15.”

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 January 5th. From Black Knight: Slowdown in Rate of Forbearance Improvement: Over the first week of the year, the number of mortgages in active forbearance plans in the U.S. fell by 92,000 (a decline of 3%), the largest weekly drop since early November. The decline was driven by the large volume of quarterly forbearance plan expirations at the end of December, many of which were reaching their nine-month point. … Despite the decline, this represents a troubling slow-down in the rate of improvement. … The 3% decline in the first week of January fell starkly short of the 9% decline seen in the first week of July (which brought about the first quarterly wave of expirations) And it pales in comparison to the 18% reduction in the first week of October when plans began to reach six-month expirations. While the monthly rate of decline has varied over the past seven months of the pandemic due to fluctuations in scheduled expiration activity, the average rate of improvement over the past 30 days has been -1% month-over-month, down from -7.5% month-over-month on average from June through November. December marked the last significant wave of quarterly expirations before the first plans begin to reach their 12-month points at the end of March. As such, it’s likely we’ll see only modest improvement in overall forbearance volumes between now and then. As of Jan. 5, 2.74 million (5.2% of) homeowners remain in COVID-19-related forbearance plans, including 3.3% (932,000) of GSE mortgages, 9.3% (1.13 million) of FHA/VA loans and 5.2% (673,000) of portfolio-held and privately securitized loans. Together, they represent $547 billion in unpaid principal.

Construction Spending Increased 0.9% in November – From the Census Bureau reported that overall construction spending increased: Construction spending during November 2020 was estimated at a seasonally adjusted annual rate of $1,459.4 billion, 0.9 percent above the revised October estimate of $1,446.9 billion. The November figure is 3.8 percent above the November 2019 estimate of $1,405.5 billion. Private spending increased and public spending decreased: Spending on private construction was at a seasonally adjusted annual rate of $1,111.8 billion, 1.2 percent above the revised October estimate of $1,098.6 billion. … In November, the estimated seasonally adjusted annual rate of public construction spending was $347.6 billion, 0.2 percent below the revised October estimate of $348.3 billion.This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted. Residential spending is 3% below the previous peak. Non-residential spending is 9% above the previous peak in January 2008 (nominal dollars), but has been weak recently. Public construction spending is 7% above the previous peak in March 2009, and 33% above the austerity low in February 2014. The second graph shows the year-over-year change in construction spending. On a year-over-year basis, private residential construction spending is up 16.1%. Non-residential spending is down 9.5% year-over-year. Public spending is up 3.1% year-over-year. Construction was considered an essential service in most areas and did not decline sharply like many other sectors, but it seems likely that non-residential, and public spending (depending on disaster relief), will be under pressure. For example, lodging is down 27% YoY, multi-retail down 21% YoY, and office down 7 YoY. This was at consensus expectations of a 0.9% increase in spending, and construction spending for the previous two months was revised up slightly.

Update: Framing Lumber Prices More Than Double Year-over-year -Here is another monthly update on framing lumber prices. This graph shows CME framing futures through Jan 4th. This is up 115% year-over-year – more than double.There is a seasonal pattern for lumber prices, and usually prices will increase in the Spring, and peak around May, and then bottom around October or November – although there is quite a bit of seasonal variability. Clearly there is another surge in demand for lumber.

Hotels: Occupancy Rate Declined 17.2% Year-over-year – From HotelNewsNow.com: STR: US hotel results for week ending 2 January: Thanks to a travel boost leading into the New Year’s holiday, U.S. weekly hotel occupancy improved noticeably from the previous week, according to STR‘s latest data through 2 January. 27 December 2020 through 2 January 2021 (percentage change from comparable week in 2019/2020):

• Occupancy: 40.6% (-17.2%)

• Average daily rate (ADR): US$107.93 (-21.5%)

• Revenue per available room (RevPAR): US$43.81 (-35.1%)

Hotel demand jumped in week-over-comparisons while TSA checkpoint counts showed five days with more than 1 million passengers. Substantial hotel demand growth is not expected to continue as leisure travel once again dissipates after the holidays. The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

Car Companies Expected To Post Lowest Sales In A Decade As Focus Turns To 2021 Recovery – Auto sales numbers for the end of 2020 could be the harbinger of a recovery to come in 2021 – but the annual numbers for 2020 are undoubtedly going to look ugly in the grand scheme of things. Despite decent numbers from GM and Toyota for December, all major automakers are expected to post “significant declines” for the year, according to the Wall Street Journal.Sales will likely total 14.4 million to 14.6 million for the year once results are in. This would mark a 15% decline from 2019 and the lowest level for sales in a decade. Among the highlights and lowlights:

• GM saw sales up 4.8% and sales of new pickup trucks rising 11%.
• Toyota saw sales up 20.4% and its 9.4% fourth-quarter sales beating estimates of 9%.
• Mazda‘s December sales were up 18%.
• Nissan’s fourth-quarter sales dropped 19%, marking its eighth straight drop, according to Bloomberg.
• According to the WSJ, Fiat’s fourth quarter sales were down 8% due to “sharply lower demand” from car-rental companies.
• As we noted days ago, Tesla sales for the year came in at 499,550, up about 36% year over year.

The seasonally adjusted annualized selling rate was estimated by Bloomberg to be 16.4 million in December, which is down from 16.9 million a year ago. Citing J.D. Power, these numbers show “recovery from the early days of the pandemic”. Analysts think a sales rebound can continue into 2021, driven by record low interest rates and – of course – stimulus checks.

December Vehicles Sales increased to 16.27 Million SAAR; Annual Sales off 14.7% – The BEA released their estimate of light vehicle sales for December this morning. The BEA estimates sales of 16.27 million SAAR in December 2020 (Seasonally Adjusted Annual Rate), up 4.1% from the November sales rate, and down 3.2% from December 2019. This was above the consensus estimate of 15.8 million SAAR. This graph shows light vehicle sales since 2006 from the BEA (blue) and the BEA’s estimate for December (red). The impact of COVID-19 was significant, and April was the worst month. Since April, sales have increased, but are still down year-over-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 16.27 million SAAR.Annual sales in 2020, at 14.46 million, were down 14.7% from 16.95 million in 2019. This was the fewest annual sales since 2012.

Having Dropped for Years, US Auto Sales Plunged to 1970s Level in 2020 (graphs) During the infamous year 2020, with all its distortions and shifts, automakers delivered 14.46 million new vehicles in the US, retail and fleet combined, down 15.4% from 2019, the largest year-over-year percentage decline since 2008 (-18%). Topping off years of declines, 2020 took auto sales back to levels first seen in the 1970s. Every recession has left a deep scar on auto sales. But over the past 20 years, it has taken many years to get back to the prior highs, only to then watch sales plunging again. The last high was in 2016, which had barely eked past the prior high of 2000, in this terribly cyclical business of long-term stagnation interrupted by deep plunges: These are deliveries of new vehicles by dealers to their customers, retail and fleet, plus direct deliveries by automakers to their large fleet customers, such as rental car companies, and direct sales by automakers to their employees under employee programs. None of the automakers reported it when they published their vehicle sales this week, but all seven giants in the US have now booked several years in a row of declines; for GM, Toyota, and Ford, 2020 was the fifth year in a row of declines. In their press releases, they highlighted a cherry-picked record here or there. But long-term sales trends, no way. Investors have a short memory, or no memory – that’s what automakers are counting on. And the media doesn’t report long-term sales trends either, so I will. Because there are some doozies in the batch, and because the Pandemic didn’t start the trends but just accelerated them.

• General Motors, the largest automaker in US sales, reported that its deliveries in the US in the year 2020 fell by 12% to 2.55 million units. It was the fifth year in a row of declines. The Pandemic just accelerated the process. Since 2015, its vehicle sales have dropped by 17.4%:
• Toyota, which re-became the second largest automaker in the US last year, reported that its total sales in the US fell by 11.9% in 2020 to 2.11 million vehicles, thereby bypassing Ford, after having surrendered the second position to Ford in 2019. The two have been nip and tuck for years. For Toyota, it was also the fifth year in a row of declines. Since 2015, Toyota’s sales have dropped 15.5%:
• Ford, the third largest automaker, reported that total sales in 2020 fell 15.6% from 2019 to 2.04 million vehicles, also the fifth year in a row of declines. Since 2015, its sales have dropped 21.4%:
• Fiat Chrysler Automobiles, the fourth largest automaker, reportedthat its US sales fell 17.4% in 2020 to 1.82 million vehicles. Since 2015, its sales have dropped 19.6%. But it’s the only automaker among the seven giants here whose sales in 2020 were higher than in 2013, if only by a hair, and if only because 2013 was still so crummy for FCA:
• American Honda, the fifth largest automaker in the US, reported that its sales in 2020 dropped 16.3% to 1.35 million vehicles, the third year in a row of declines. Since 2017, its sales are down 18.0%:
• Hyundai and Kia – they report separately though they’re joined through their ownership structure – sold 1.21 million vehicles combined in 2020, down 7.4% from 2019. This makes the company the sixth largest automaker in the US, with Nissan’s sales having collapsed over the past three years, and fallen through the floor. Hyundai-Kia sales are down 15.1% since 2016:

U.S. Heavy Truck Sales down 5% Year-over-year in December – The following graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the December 2020 seasonally adjusted annual sales rate (SAAR). Heavy truck sales really collapsed during the great recession, falling to a low of 180 thousand SAAR in May 2009. Then heavy truck sales increased to a new all time high of 575 thousand SAAR in September 2019. However heavy truck sales started declining in late 2019 due to lower oil prices. Note: “Heavy trucks – trucks more than 14,000 pounds gross vehicle weight.” Heavy truck sales really declined towards the end of March due to COVID-19 and the collapse in oil prices, but have since rebounded. Heavy truck sales were at 454 thousand SAAR in December, down from 477 thousand SAAR in November, and down 5% from 475 thousand SAAR in December 2019. For the year, heavy truck sales were 409 thousand, down 22.3% from 527 thousand in 2019. This was the fewest heavy truck sales since 2016.

AAR: December Rail Carloads down 3.7% YoY, Intermodal Up 12.2% YoY –From the Association of American Railroads (AAR) Rail Time Indicators. U.S. rail traffic left something to be desired in 2020 – no surprise, of course, given the pandemic – but traffic finished the year reasonably strong. In December 2020, U.S. rail intermodal volume was up 12.2% over December 2019, its biggest monthly gain since February 2016. … For all of 2020, U.S. intermodal originations were 13.46 million containers and trailers – the fourth highest annual total in history (behind 2017, 2018, and 2019) and down 2.0% (276,904 units) from 2019….Total U.S. carloads (not including intermodal) were 11.28 million in 2020, down 13.0% (1.69 million carloads) from 2019 and easily the lowest annual total since sometime before 1988, when our data begin. … U.S. carloads excluding coal were down 7.9% in 2020 from 2019, though they were up 1.0% in December 2020 over December 2019. That’s their first year-over-year monthly gain in nearly two years. This graph from the Rail Time Indicators report shows the six week average of U.S. Carloads in 2018, 2019 and 2020: In December, total carloads were down 3.7%, their smallest monthly decline since May 2019. Still, average weekly carloads in December 2020 (220,265) were the lowest for December since our records begin.The second graph shows the six week average of U.S. intermodal in 2018, 2019 and 2020: (using intermodal or shipping containers):In December 2020, intermodal was up 12.2% over December 2019, its biggest monthly percentage gain since February 2016. Week 50, the second of the five weeks in December 2020, was the highest volume U.S. intermodal week ever. Five other weeks in 2020, all since week 43, are in the all-time intermodal top 10.Note that rail traffic was weak prior to the pandemic, and intermodal has come back strong and was only down 2% annually compared to 2019.

Trade Deficit Increased to $68.1 Billion in November –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 $68.1 billion in November, up $5.0 billion from $63.1 billion in October, revised.November exports were $184.2 billion, $2.2 billion more than October exports. November imports were $252.3 billion, $7.2 billion more than October imports. Both exports and imports increased in November. Exports are down 12.5% compared to November 2019; imports are unchanged compared to November 2019. Both imports and exports decreased sharply due to COVID-19, and have now bounced back (imports much 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 $35.68 per barrel in November, down from $36.23 per barrel in October, and down from $51.91 in November 2019. The trade deficit with China increased to $30.7 billion in November, from $26.3 billion in November 2019.

The Trade Deficit Surges –Menzie Chinn – To a 14 year high (in absolute terms, not as a share of GDP). Shrinkage in US-China deficit stalls. Figure 1: US goods and services trade balance (blue), and US-China goods trade balance, 12 month trailing moving average (brown), both in millions of $. Gray dashed line at NBER defined peak. Orange shading denotes trade war dated from March 2018. Source: BEA/Census via FRED, and author’s calculations.While the trade balance improves slightly during the trade war (shaded orange) pre-pandemic, I’d attribute that development more to macroeconomic conditions. The goods trade balance pre-pandemic was increasing, but from the pandemic onward, has trended sideways, with a downward move in latest months. This is merely an illustration of the point that tariffs and other trade barriers will to a first approximation only re-allocate the trade deficits between countries.The dollar strengthening – due to safe haven effects exacerbated by policy uncertainty surrounding Trump’s erratic trade policies – worked against trade deficit shrinkage. Figure 2: US goods and services trade balance, in millions of $ (blue, left scale), and real value of dollar against broad basked of currencies, in logs 2006M01=0 (red, right scale). Gray dashed line at NBER defined peak. Orange shading denotes trade war dated from March 2018. Source: BEA/Census via FRED, and author’s calculations.It is interesting to see the rapidly increasing deficit occur against a backdrop of slow economic growth; consumer goods accounted for a large component of the increase in imports, so may represent the shift in consumption patterns specific to the pandemic.

ISM Services Index Increased to 57.2% in December –The December ISM Services index was at 57.2%, up from 55.9% last month. The employment index decreased to 48.2%, from 51.5%. Note: Above 50 indicates expansion, below 50 contraction. From the Institute for Supply Management: Services PMI™ at 57.2%; December 2020 Services ISM® Report On Business®: Economic activity in the services sector grew in December for the seventh month in a row, say the nation’s purchasing and supply executives in the latest Services ISM® Report On Business®.The report was issued today by Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee: “The Services PMI™ registered 57.2 percent, 1.3 percentage points higher than the November reading of 55.9 percent. This reading represents a seventh straight month of growth for the services sector, which has expanded for all but two of the last 131 months.

December Markit Services PMI: “Business activity growth slowest for three months amid rise in virus cases” – The December US Services Purchasing Managers’ Index conducted by Markit came in at 54.8 percent, down 3.6 from the final November estimate of 58.4. The Investing.com consensus was for 55.3 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: “Rising virus case numbers took an increasing toll on the US economy in December, with business activity, order books and employment all growing at much reduced rates. The slowdown was especially steep in the service sector, where stricter social distancing measures hit consumerfacing businesses in particular. “While the survey data remained sufficiently resilient to indicate that GDP continued to expand at a relatively robust rate in the fourth quarter, the near-term outlook has deteriorated. Business expectations for the coming year fell considerably compared to November, as some postelection exuberance waned and companies grew more anxious about the ongoing impact of the pandemic. Rising case numbers represent an increased risk to the economy in the coming weeks, and hopes rest to a large extent on pandemic stimulus lifting the economy to prevent another downturn. “More encouragingly, businesses remain much more confident about the outlook in a year’s time than before the successful vaccine developments, reflecting greater optimism for prospects of life returning to normal in the second half of 2021.” [Press Release] Here is a snapshot of the series since mid-2012.

Weekly Initial Unemployment Claims at 787,000 — The DOL reported: In the week ending January 2, the advance figure for seasonally adjusted initial claims was 787,000, a decrease of 3,000 from the previous week’s revised level. The previous week’s level was revised up by 3,000 from 787,000 to 790,000. The 4-week moving average was 818,750, a decrease of 18,750 from the previous week’s revised average. The previous week’s average was revised up by 750 from 836,750 to 837,500. This does not include the 161,460 initial claims for Pandemic Unemployment Assistance (PUA) that was down from 310,462 the previous week. 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 818,750.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 5,072,000 (SA) from 5,198,000 (SA) last week and will likely stay at a high level until the crisis abates.Note: There are an additional 8,383,387 receiving Pandemic Unemployment Assistance (PUA) that decreased from 8,453,940 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 4,516,900 are receiving Pandemic Emergency Unemployment Compensation (PEUC) that decreased from 4,810,334 the previous week.

First UI claims of 2021 are still higher than the worst of the Great Recession -EPI Blog -Another 948,000 people applied for Unemployment Insurance (UI) benefits last week, including 787,000 people who applied for regular state UI and 161,000 who applied for Pandemic Unemployment Assistance (PUA). The 948,000 who applied for UI last week was a decrease of 152,000 from the prior week. That drop was driven almost entirely by a drop in PUA claims, undoubtedly due to uncertainty over whether PUA would be extended, as Trump delayed signing the relief bill during that week. Now that the program has been extended (more on that below), I expect PUA claims to rise again in coming weeks.Last week was the 42nd straight week total initial claims were 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 greater than the second-worst week of the Great Recession.)Most states provide 26 weeks (six months) of regular benefits. Given the length of this crisis, many workers have exhausted their regular state UI benefits. In the most recent data, continuing claims for regular state UI dropped by 126,000. After an individual exhausts regular state benefits, they can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 24 weeks of regular state UI (the December COVID-19 relief bill increased the number of weeks of PEUC eligibility by 11, from 13 to 24).However, in the most recent data available for PEUC, the week ending Dec 19, PEUC claims dropped by 293,000. That was undoubtedly due to exhaustions. Well over 2 million people had exhausted the original 13 weeks of PEUC before Congress passed the extensions (see column C43 in form ETA 5159 for PEUC here). These workers are eligible for the additional 11 weeks, but they will need to recertify. We can expect PEUC numbers to swell dramatically as this occurs.Continuing claims for PUA also dropped, by 71,000, in the latest data. The latest data for this series is also for the week ending December 19 – so before the relief bill, meaning some of that drop would have been exhaustions, i.e. temporary. The COVID-19 relief bill also extended the total weeks of eligibility for PUA by 11, from 39 to 50 weeks. As with PEUC, those who had exhausted the original 39 weeks of PUA before Congress passed the extensions are eligible for the additional 11 weeks, but they will need to recertify. Workers who were still on PUA (or PEUC) when Congress passed the bill will not need to recertify.The 11-week extensions of PEUC and PUA just kick the can down the road – they are not long enough. Without additional action by Congress, millions will exhaust benefits in mid-March, when the virus is still surging and job opportunities are still scarce. Figure A shows continuing claims in all programs over time (the latest data are for December 19). Continuing claims are still more than 17 million above where they were a year ago, even with the exhaustions occurring during the time period covered by this chart.

ADP: Private Employment decreased 123,000 in December – From ADP: Private sector employment decreased by 123,000 jobs from November to Decemberaccording to the December 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. “As the impact of the pandemic on the labor market intensifies, December posted the first decline since April 2020,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “The job losses were primarilly concentrated in retail and leisure and hospitality.” The BLS report will be released Friday, and the consensus is for 100 thousand non-farm payroll jobs added in December. Of course the ADP report has not been very useful in predicting the BLS report.

A Closer Look at Today’s ADP Employment Report – In this morning’s ADP employment report we got the December estimate of 123K nonfarm private employment jobs lost from ADP, a decrease over November’s revised 304K. The popular spin on this indicator is as a preview to the monthly jobs report from the Bureau of Labor Statistics.Here is a snapshot of the monthly change in the ADP headline number since the company’s earliest published data in April 2002. This is quite a volatile series, so we’ve plotted the monthly data points as dots along with a six-month moving average, which gives us a clearer sense of the trend.As we see in the chart above, the trend peaked 20 months before the last recession and went negative around the time that the NBER subsequently declared as the recession start. The COVID-19 pandemic has brought employment numbers down to levels we have never seen this century.ADP also gives us a breakdown of Total Nonfarm Private Employment into two categories: Goods Producing and Services. Here is the same chart style illustrating the two. The US is predominantly a services economy, so it comes as no surprise that Services employment has shown stronger jobs growth. The trend in Goods Producing jobs went negative over a year before the last recession. It makes sense that service-producing employment has plummeted during the pandemic for a couple of reasons – our economy is mostly supported by service-producing jobs; and during the pandemic those same services are being brought to a halt.For a sense of the relative size of Services over Goods Producing employment, the next chart shows the percentage of Services Jobs across the entire series. The latest data point is below the record high. There are a number of factors behind this trend. In addition to our increasing dependence on Services, Goods Production employment continues to be impacted by automation and offshoring. For a better sense of the components of the two Goods Producing and Service Providing cohorts, here is a snapshot of the five select industries tracked by ADP. The two things to note here are the relative sizes of the industries and the relative trends. Note that Construction and Manufacturing are Production industries whereas the other three are Service Providing. Another view of the relative trends of the five select industries is an overlay of the year-over-year comparison. For a longer-term perspective on the Goods Producing and Service Providing employment, see our monthly analysis, Secular Trends in Employment: Goods Producing Versus Services Providing, which is based on data from the Department of Labor’s monthly jobs report reaching back to 1939.

December Employment Report: 140 Thousand Jobs LOST, 6.7% Unemployment Rate – From the BLS: Total nonfarm payroll employment declined by 140,000 in December, and the unemployment rate was unchanged at 6.7 percent, the U.S. Bureau of Labor Statistics reported today. The decline in payroll employment reflects the recent increase in coronavirus (COVID-19) cases and efforts to contain the pandemic. In December, job losses in leisure and hospitality and in private education were partially offset by gains in professional and business services, retail trade, and construction…. The change in total nonfarm payroll employment for October was revised up by 44,000, from +610,000 to +654,000, and the change for November was revised up by 91,000, from +245,000 to +336,000. With these revisions, employment in October and November combined was 135,000 more than previously reported. The first graph shows the year-over-year change in total non-farm employment since 1968. In December, the year-over-year change was negative 9.37 million jobs. Total payrolls decreased by 140 thousand in December. Private payrolls decreased by 95 thousand. Payrolls for October and November were revised up 135 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 was unchanged at 61.5% in December. This is the percentage of the working age population in the labor force. The Employment-Population ratio was unchanged at 57.4% (black line). IThe fourth graph shows the unemployment rate. The unemployment rate was unchanged in December at 6.7%. This was well below consensus expectations, however October and November were revised up by 135,000 combined.

December Jobs Report: 140K Jobs Lost, Unemployment Rate Remains At 6.7% – This morning’s employment report for December showed a 140K decrease in total nonfarm payrolls, which was below theInvesting.com forecast of 71K jobs added. Here is an excerpt from the Employment Situation Summary released this morning by the Bureau of Labor Statistics: Total nonfarm payroll employment declined by 140,000 in December, and the unemployment rate was unchanged at 6.7 percent, the U.S. Bureau of Labor Statistics reported today. The decline in payroll employment reflects the recent increase in coronavirus (COVID-19) cases and efforts to contain the pandemic. In December, job losses in leisure and hospitality and in private education were partially offset by gains in professional and business services, retail trade, and construction. This news release presents statistics from two monthly surveys. The household survey measures labor force status, including unemployment, by demographic characteristics. The establishment survey measures nonfarm employment, hours, and earnings by industry. For more information about the concepts and statistical methodology used in these two surveys, see the Technical Note. Seasonally adjusted household survey data have been revised using updated seasonal adjustment factors, a procedure done at the end of each calendar year. Seasonally adjusted estimates back to January 2016 were subject to revision. The unemployment rates for January 2020 through November 2020 (as originally published and as revised) appear in table A on page 7, along with additional information about the revisions. Here is a snapshot of the monthly percent change in Nonfarm Employment since 2000. We’ve added a 12-month moving average to highlight the long-term trend.

December jobs report: jobs actually declined in December; BUT employment primed for takeoff once pandemic abates — Important: There was a huge amount of seasonality in this report. This is common for December, but the issue was greatly exacerbated because of the outsized impact of the pandemic. Take the large changes in some of the data with many grains of salt. I have been warning for almost 4 weeks that the December employment report might have a negative number. It did. At the same time, the internals are not nearly so bad as the headline.HEADLINES:

• -140,000 million jobs lost, 95,000 of which were in the private sector and 55,000 were in government. Comparatively, there were 22.1 million job losses in March and April. The alternate, and more volatile measure in the household report indicated a gain of 21,000 jobs, which factors into the unemployment and underemployment rates below.
• U3 unemployment rate was unchanged at 6.7%, compared with the January low of 3.5%.
• U6 underemployment rate fell -0.3% from 12.0% to 11.7%, compared with the January low of 6.9%.
• Those on temporary layoff increased 277,000 to 3,039,000.
• Permanent job losers decreased by -348,000 to 3,370,000.
• October was revised upward by 44,000. November was also revised upward by 95,000 respectively, for a net gain of 135,000 jobs compared with previous reports.
• the average manufacturing workweek was unchanged at 40.2 hours. This is one of the 10 components of the LEI.
• Manufacturing jobs increased by 38,000. Manufacturing has still lost -543,000 jobs in the past 10 months, or -4.2% of the total. About 60% of the total loss of 10.6% has been regained.
• Construction jobs increased by 51,000. Even so, in the past 10 months -226,000 construction jobs have been lost, -30% of the total. About 80% of the worst loss of 15.2% loss has been regained.
• Residential construction jobs, which are even more leading, rose by 8,900. Since February there have now been actual job *gains,* to the tune of 6,400 jobs, to a new 10 year+ high.
• temporary jobs rose by 67,600. Since February, there have still been -213,500 jobs lost, or -7.3% of all temporary help jobs.
• the number of people unemployed for 5 weeks or less rose by 849,000 to million, compared with April’s total of 14.283 million.
• Professional and business employment rose by 161,000, which is still -858,000, or about 4% below its February peak.
• Average Hourly Earnings for Production and Nonsupervisory Personnel: rose $0.20 from $24.89 to $25.09, which is a gain of 5.2%(!) in the 10 months since the pandemic began. As with last March and April, these gains reflect that job losses occurred primarily among lower wage earners, who since May had been disproportionately recalled to work.
• the index of aggregate hours worked for non-managerial workers declined by -0.1%. In the past 10 months combined this has nevertheless fallen by about -6%.
• the index of aggregate payrolls for non-managerial workers rose by 0.7%. In the past 10 months combined this has nevertheless fallen by about -1.6%. Still, about 90% of the loss from February to April has been made back up.
• Full time jobs gained 397,000 in the household report.
• Part time jobs declined -471,000 in the household report.
• The number of job holders who were part time for economic reasons decreased by -332,000 to 4.891 million. This is still an increase since February of 1,772,000.

SUMMARY: While the headline was a negative number, this was almost entirely due to huge declines of -372,000 in food and beverage establishments, and another -92,000 in amusement and recreation. Private education lost -63,000, and there were also sizable losses in local and state government. In contrast, all of the leading job groups showed equally sizable gains, and residential construction employment made a new decade-plus high. Among leading employment indicators, only the increase in short term unemployment was a negative. Full time jobs also showed gains, while part time jobs showed losses. Aggregate and average payrolls also rose sharply. While the average hourly wage increase can be put down to the heavily skewed nature of the new job losses, the aggregate increase which includes the total from all jobs, is a big positive, probably reflecting some annual raises. This is an absolutely poor report as to current conditions, particularly 10 months into the pandemic. On the other hand, the leading sectors once again show that the economy – including employment – is primed for takeoff once the pandemic is brought under control.

Comments on December Employment Report –The headline jobs number in the December employment report was well below expectations, however employment for the previous two months was revised up significantly. Government employment declined 45 thousand in December. State and local governments lost another 51 thousand jobs. Leisure and hospitality lost 498 thousand jobs in December due to the surging pandemic. In March and April, leisure and hospitality lost 8.3 million jobs, and then gained about 60% of those jobs back. With the December job losses, leisure and hospitality is down 3.9 million jobs since February 2020. Earlier: December Employment Report: 140 Thousand Jobs LOST, 6.7% Unemployment Rate In December, the year-over-year employment change was minus 9.37 million jobs. This graph shows permanent job losers as a percent of the pre-recession peak in employment through the November report. (ht Joe Weisenthal at Bloomberg) This data is only available back to 1994, so there is only data for three recessions. In December, the number of permanent job losers decreased to 3.370 million from 3.718 million in November. This is good news. 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 December to 81.0% from 80.9% in November, and the 25 to 54 employment population ratio increased to 76.3% from 76.0% in November. 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 230 thousand workers (NSA) net in December. Note: this is NSA (Not Seasonally Adjusted). This was a gain of 121 thousand jobs, seasonally adjusted, in December. This might be distorted this year by a combination of seasonal hiring – and some bounce back in employment from the shutdowns earlier this year. But this an unexpected large gain for retail. The number of persons working part time for economic reasons decreased in December to 6.170 million from 6.641 million in November. These workers are included in the alternate measure of labor underutilization (U-6) that decreased to 11.7% in December. This is down from the record high in April 22.9% for this measure since 1994. This graph shows the number of workers unemployed for 27 weeks or more. According to the BLS, there are 3.956 million workers who have been unemployed for more than 26 weeks and still want a job. This will be a key measure to follow during the recovery. Summary: The headline monthly jobs number was well below expectations, however the previous two months were revised up 135,000 combined. The headline unemployment rate was unchanged at 6.7%. The good news is permanent job losses declined, and the number of employees working part time for economic reasons also declined. However, overall, this was another disappointing report.

The economy President-elect Biden is inheriting: 26.8 million workers – 15.8% of the workforce – are being directly hurt by the coronavirus crisis – EPI Blog by Heidi Shierholz – We now have a full year of jobs data for 2020. This is an important moment to take stock of where things stand in the labor market. The official unemployment rate was 6.7% in December, and the official number of unemployed workers was10.7 million, according to the Bureau of Labor Statistics (BLS). These official numbers are a vast undercount of the number of workers being harmed by the weak labor market, however. In fact, 26.8 million workers – 15.8% of the workforce – are either unemployed, otherwise out of work due to the pandemic, or employed but experiencing a drop in hours and pay. 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 December, there were 1.0 million such workers, a substantial increase from November. (Wonky aside: 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 of work because of the virus.) Accounting for these workers, the unemployment rate would be 7.3%.
• 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 2.7 million unemployed workers who are misclassified as not in the labor force. This is conservative, given that there is good evidence that this problem is likely substantially worse in the coronavirus era. (Another wonky aside: this research also finds that the official labor force participation rate was understating labor force participation by 1.9 percentage points at the start of 2020, or by 4.8 million workers.)
• 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 coronavirus shock. 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 December population level. I then subtract this “counterfactual” labor force from the actual labor force. This yields an additional 4.9 million people out of the labor force as a result of the crisis.
• Millions of employed workers have seen a drop in hours and pay because of the pandemic. BLS reports that 7.5 million people who were working in December 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. This is a substantial increase from November. These workers have clearly been directly harmed by the coronavirus downturn.

Adding up all but the last quantity above, that is 10.7 million + 1.0 million + 2.7 million + 4.9 million = 19.3 million workers who are either unemployed or otherwise out of the labor force as a result of the virus. Accounting for these workers, the unemployment rate would be 11.3%. Also adding in the 7.5 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 December by the coronavirus downturn to 26.8 million. That is 15.8% of the workforce.

Covid-19 Pandemic Likely Improved Your Commute to Work – WSJ – Workers across the U.S. can look forward to similarly improved post-pandemic commutes, thanks to the anticipated staying power of the work-from-home trend, say people who study transportation. Even after offices reopen on a large scale, many employees will likely go in only a few days a weekand a large share will have flexibility to travel at off-peak times, according to recent surveys. Fewer cars on the road during rush hour would mean less traffic congestion. “It will be as though maybe you added a lane each direction in the freeway,” said Tim Lomax, research fellow at the Texas A&M Transportation Institute. “This telework phenomenon has shown people that they don’t have to be in the office all the time.” The impacts will depend on a range of factors, including how much leeway employers give and the choices employees make. In big metro areas with robust public transit systems, some planners and academics worry that a large-scale shift from trains and buses to cars – a phenomenon the pandemic has put into motion – could worsen traffic snarls. More than 300 North American employers polled in October said they expect about 30% of their full-time employees will be working from home in three years, up from 5% three years ago, according to a survey by global advisory firm Willis Towers Watson. Overall, an estimated 18% of U.S. workers will likely work from home every day in the post-pandemic era, more than double the 7% who did beforehand, .Commute times nationwide had been edging higher before the pandemic. Nationwide, the average trip to work in 2019 took nearly 28 minutes, about two minutes longer than in 2010, according to the Census Bureau. In some of the biggest metro areas, car commuting collapsed in March, rebounded in late spring and early summer, then plunged during the fall as the virus surged, according to data-analytics company StreetLight Data Inc. In metro Chicago, commuting miles traveled in November were about half the pre-pandemic norm, StreetLight found. Metro Boston’s total wasn’t much higher at 57%, while Houston and Los Angeles stood at 65% and 77%, respectively.

With Guards Crippled by COVID-19, States Are Closing Prisons – States and counties are finding it hard to keep jails and prisons open as the virus ravages both prisoners and staff members. But transferring inmates can spur new outbreaks.Battered by a wave of coronavirus infections and deaths, local jails and state prison systems around the United States have resorted to a drastic strategy to keep the virus at bay: Shutting down completely and transferring their inmates elsewhere.From California to Missouri to Pennsylvania, state and local officials say that so many guards have fallen ill with the virus and are unable to work that abruptly closing some correctional facilities is the only way to maintain community security and prisoner safety.Experts say the fallout is easy to predict: The jails and prisons that stay open will probably become even more crowded, unsanitary and disease-ridden, and the transfers are likely to help the virus proliferate both inside and outside the walls. “Movement of people is dangerous,” said Lauren Brinkley-Rubinstein, a professor at the University of North Carolina School of Medicine, who has been tracking coronavirus cases in correctional settings. “We’ve got really good examples of overcrowding equals more infection and greater risk of outbreak. We’ve got lots of evidence that even transferring people from one facility to the next is very dangerous.“There have been more than 480,000 confirmed coronavirus infections and at least 2,100 deaths among inmates and guards in prisons, jails and detention centers across the nation, according to a New York Times database.Among those grim statistics are the nearly 100,000 correctional officers who have tested positive and 170 who have died.Early in the pandemic, some states tried to ward off virus outbreaks by releasing some offenders early and detaining fewer people awaiting trial in order to reduce their populations, but those efforts often met with resistance from politicians and the public.More recently, as arrests in many areas have increased, jail populations have returned to pre-pandemic levels, according to data collected by the Vera Institute of Justice, a nonprofit research and policy group based in New York.That fact, combined with widespread infections among correctional officers, staffing shortages stretching back many years and strains on prison medical facilities, have pushed states as the pandemic progresses toward more concentration and crowding, rather than less, in part through closure of strained facilities.

Public input sessions on MDU’s proposed natural gas rate hike set for March – The public can weigh in with state regulators on Montana-Dakota Utilities’ proposed rate increase that would raise the average household’s natural gas bill by $6.26 per month. The North Dakota Public Service Commission has scheduled public input sessions for March 2 at noon and at 5:30 p.m. A hearing on the proposal is slated to begin at 1 p.m. March 17 and could take several days. AARP North Dakota, which advocates for people age 50 and older, has intervened in the case. As an intervenor, it can participate in the hearing by providing testimony and cross-examining MDU representatives. AARP has concerns that such a significant jump in rates would adversely impact older residents. MDU seeks to collect an additional $9 million in annual revenues through the rate case. The company says the requested increase stems from infrastructure investments since its last rate case in 2018, including $53 million spent since then to improve the reliability and safety of its gas service. The PSC has already approved an interim rate increase for MDU that raises customers’ gas rates by $3.57 per month for the average household. It took effect Jan. 1. MDU customers could see a refund if the PSC were to reject an increase or approve a lesser amount than the interim rate. MDU has 114,000 natural gas customers in 75 communities across North Dakota, including Bismarck and Mandan. The PSC also is gearing up for another case that would significantly raise rates for some North Dakotans. Xcel Energy, which serves customers in eastern North Dakota and in the Minot area, is asking regulators to approve an electricity rate increase of $8.37 per month for the average household in winter and $8.53 per month in summer. The PSC will hold public input sessions for that case on March 4 at noon and 5:30 p.m. A hearing has not yet been scheduled.

DeVos makes final pitch for school choice in letter to Congress – Education Secretary Betsy DeVos made a case for expanding federal tax dollars to students attending private schools while also urging lawmakers to resist calls to cancel student debt in her final letter to Congress on Monday. In the letter obtained by The Hill, DeVos reportedly argued that federal grants for K-12 education should be handled in a manner similar to federal college aid provided directly to students. “Given this precedent of choice and empowerment, it is impossible to understand how it is acceptable for federal taxpayer dollars to support a student attending the University of Notre Dame, but not for a student who wants to attend Notre Dame Prep High School,” reads the letter. “Let me encourage you to fund education – that is, learning – not a Department of Education. Let me urge you to fund students, not school buildings,” she continued. DeVos, who is set to depart from her role in coming weeks, also reportedly took aim at a major ask by activists to the incoming Biden administration to cancel student loan debt, which now totals more than $1.6 trillion nationwide, according to the Federal Reserve. “I hope you also reject misguided calls to make college ‘free’ and require the two-thirds of Americans who didn’t take on student debt or who responsibly paid off their student loans to pay for the loans of those who have not done the same,” the secretary wrote. The Biden campaign and in particular incoming first lady Jill Biden, who is a practicing professor of English at Northern Virginia Community College, hammered DeVos for months during the 2020 election season and vowed to overturn a rule put in place by the departing secretary strengthening protections for those accused of rape or sexual assault on college campuses. In September, Jill Biden told CNN that she didn’t believe the Education secretary ever “felt invested in America’s public schools” while accusing her of not having a plan to reopen schools safely in the fall amid the COVID-19 pandemic. “She didn’t have a strategy, [President] Trump didn’t have a strategy,” Biden said at the time.

Chicago schools to resume in-person learning next week – Chicago Public Schools (CPS) plans to resume in-person learning for some students next week, although several teachers, who were directed to return to the classrooms on Monday to prepare, stayed home due to concerns about COVID-19. Starting next week, the country’s third-largest school district will begin allowing preschool and some special education students the option to return to in-person instruction for the first time since March or to continue online learning. CPS’s phased reopening will permit students from kindergarten to eighth grade to opt into in-person classes beginning on Feb. 1. The district has not yet provided a date for high school students to return to in-person instruction. But the Chicago Teachers Union (CTU) has vocally opposed the district’s reopening plan, citing safety concerns amid the pandemic, and noted several of its members were electing not to return “until buildings are safe.” The district told preschool and some special education instructors to report to classrooms on Monday, while staff for kindergarten through eighth grade will be instructed to return Jan. 25. “CPS wants to force pre-K and special education cluster teachers back into buildings on Monday, six days before Chicago Mayor Lori Lightfoot’s most recent stay-at-home order expires – and before health professionals can gauge any additional post-holiday risk of spread,” the union said in a release. Out of the more than 5,000 staff instructed to report in-person on Monday, about 1,800 requested special accommodations with about 600 receiving approval, CTU President Jesse Sharkey said, according to NBC Chicago. It was unclear how many of the staff showed up on Monday. The district indicated that it had approved accommodations to work from home for educators with a Centers for Disease Control and Prevention-recognized medical condition.

Chicago schools press ahead with reopening despite wide opposition among teachers and parents – Chicago Public Schools (CPS) is pressing ahead with its plan to reopen schools for in-person learning, with many Pre-K and special education teachers reporting to schools on Monday despite wide opposition among parents and educators. The Chicago Teachers Union (CTU) has resisted calling for any joint action as it tries to pressure the administration of Democratic Mayor Lori Lightfoot into working with the union to craft a reopening policy it can sell to its members and the wider working class. The Lightfoot administration is pushing aggressively to reopen schools in the face of predictions that the month of January will see 115,000 deaths or more from COVID-19 in the US, an enormous increase from the record 77,000 deaths in December. According to the City of Chicago’s own COVID-19 dashboard, the city’s positivity rate is 10.2 percent, up from 8.6 percent the previous week. While the number of confirmed cases in the city has fallen slightly from the previous week, there has been a substantial falloff in testing over the holidays, with the number of daily tests roughly half what they were just before Thanksgiving.Even with a right-wing media blitz claiming schools can be reopened safely, the deadly reality of the pandemic is clear to the majority of working class Chicagoans. According to numbers released by the district, just 23 percent of families indicated they would opt for in-person learning this year. The number of students who actually report is likely to be far less than that, as CPS previously stated that students who chose to opt-in would be able to continue online until families feel safe returning. This means that while educators will be back in schools, most of their students will continue learning from home. However, in addition to teaching those students who are learning remotely, teachers will also have to deliver instruction and modify lessons at the same time for a small number of students in the classrooms, degrading the quality of education for both groups of students. This backwards model – which endangers all those present in the classroom – has already been implemented in districts and states across the US, and is widely loathed by educators.

Chicago Teachers Union leader partied in Puerto Rico as teachers were herded back into schools – On December 31, Chicago news station WGN published social media posts by Chicago Teachers Union Area Vice President Sarah Chambers enjoying a vacation in Puerto Rico just days before thousands of teachers were forced back into dangerous school buildings under Democratic Mayor Lori Lightfoot’s reopening plan. The incident revealed the essence of the CTU, which falsely claims to “represent” more than 30,000 educators in the nation’s third-largest school district. It is an outfit run by upper-middle-class functionaries who are completely insulated from the disastrous consequences their actions have and continue to produce for rank-and-file teachers and working class families in the city. In addition to poolside selfies from her Caribbean vacation, Chambers posted messages about the restaurant meals she was looking forward to in Old San Juan, the tourist section of the impoverished island’s capital. Puerto Rico has had 127,000 people contract COVID-19 and 1,200 deaths. Using the account name Sarah4Justice, Chambers, who was there along with CTU grievance coordinator Sara Echevarria, created posts oblivious to these conditions, not to mention the struggle of Puerto Rican teachers against the impact of hurricanes, earthquakes and savage austerity. In Chicago, district officials have ordered all pre-K through eighth grade teachers without approved medical exceptions back into buildings this month, regardless of their family’s health conditions, and threatened those who do not return with dismissal. This is despite a citywide infection rate of over 10 percent. Infection rates are closer to 20 percent in working class neighborhoods where low-wage workers are forced to work, rely on mass transit and live in large, multigenerational households., To make matters worse, public health experts believe the new, more virulent strain of the virus, which spreads particularly fast among young people, is already in Chicago, sparking the latest surge in cases. On Sunday, Chicago resident Arnold Herrera, a 19-year-old with no prior health problems, died of the disease.Under these conditions, there is immense opposition among educators and parents to the deadly reopening policy. More than half of the 2,100 teachers and 40 percent of the support staff instructed to return to work Monday did not return, according to district officials. On Sunday evening, CPS CEO Janice Jackson admitted in her letter to Chicago aldermen that only 37 percent of parents of pre-K through eighth grade and special education students have stated intention to return for in-person learning. Chambers’ social media posts further undermined the already tattered credibility of the CTU, which continues to posture as an opponent of Lightfoot’s forced reopening even as it blocks collective action by teachers against the murderous policy. In an effort at damage control, Chambers, who at first defended her actions, issued a statement of contrition and announced she would “step back” from the CTU executive board, at least temporarily.

Illinois high school student dies of COVID-19 — Sarah Simental, an 18-year-old high school student from Tinley Park, Illinois, died December 26 just days after becoming sick with COVID-19. About one week before Christmas, Simental became ill with a headache and congestion. By December 23 her condition had rapidly deteriorated and she was taken to Silver Cross Hospital in New Lenox. After it became apparent that she needed intensive care, Simental was airlifted to the University of Chicago Medical Center. In a video interview shared by the press, Sarah’s mother Deborah Simental reported that at first it seemed that her daughter may have only come down with the common cold. However, her symptoms quickly became more concerning. “There was vomiting, and she was getting the chills, and the body aches,” said Simental. After having spent days in the hospital with no signs of improvement and being placed on oxygen machines, Sarah suffered a series of strokes which led to cardiac arrest. The Cook County medical examiner’s office reported that Simental’s death was the result of acute hypoxic respiratory failure due to COVID-19 infection, with non-traumatic cerebral hemorrhages as a contributing factor. She had no prior health concerns and was in perfect health before becoming infected with COVID-19. Sarah Simental is now one of 483 Americans aged 15 to 24 years old to have died of COVID-19. Her mother told the press, “Sarah is an example that it can happen to the youngest and healthiest people.” Sarah’s parents urged that people take the pandemic seriously and wanted to speak out on her daughter’s death to demonstrate that young people are also at risk of dying from the pandemic. Sarah’s mother, wanting others to understand her family’s pain and hopefully prevent similar tragedies, urged others not to take any risks, saying, “You’re going to have a Christmas next year. You’re going to have a Thanksgiving, you’re going to have a birthday, and my daughter along with hundreds of thousands of other people are not going to have those things with their family members anymore. You need to take it seriously.” “We are living it and it is an absolute nightmare,” Deborah Simental told reporters. In the last conversation between the mother and daughter Sarah told her mother she was sorry that she would miss being home for Christmas. Deborah assured Sarah that she should not worry and that they would celebrate the holiday after she recovered. Deborah said that Sarah replied saying, “Mom, it’s going to be okay,” before adding through tears, “And that was my last conversation with my daughter.”

As reopening plans stall, 1 in 3 students are testing positive for COVID-19 at some L.A. schools – With 1 in 3 students testing positive for the coronavirus in some Los Angeles neighborhoods, Gov. Gavin Newsom’s push to reopen campuses is clashing with the reality of a raging pandemic as many school districts opt for January shutdowns and superintendents call for clearer guidance on when it will be safe to unlock their campus doors. The swift-moving developments come one week after Newsom announced financial help – totaling $2 billion – that would go to elementary schools that reopen as early as next month and later to schools serving older students. Newsom cited the widely acknowledged harms of learning loss and social isolation – especially for Black and Latino students from low-income families – after in-person instruction shut down nearly 10 months ago across the state. Superintendents from seven of the state’s largest school districts on Wednesday called on Newsom to set a clear and mandated state standard for reopening campuses. They also faulted Newsom’s plan for seeming to rely on funds that would otherwise go toward important existing education programs. “Our schools stand ready to resume in-person instruction as soon as health conditions are safe and appropriate. But we cannot do it alone,” superintendents from Los Angeles, Long Beach, San Diego, San Francisco, Oakland, Fresno and Sacramento wrote in the letter. “Despite heroic efforts by students, teachers and families, it will take a coordinated effort by all in state and local government to reopen classrooms.” Amid an unprecedented surge of coronavirus infections that has overwhelmed hospitals – and is widely expected to worsen in coming weeks – many districts, including those in Los Angeles, Pasadena and Claremont, have moved to keep campuses closed for the near future. “Extraordinarily high case counts of COVID are the barrier to opening schools in the Los Angeles area, and we encourage the governor, the Legislature, state and local authorities to make that job one,” said L.A. schools Supt. Austin Beutner. “Because until the case counts are within any reasonable standard … it’s not possible for schools in Los Angeles to be open, and that’s troubling for all of us.” L.A. Unified contributed an alarming data point in the letter: Nearly 1 in 3 asymptomatic students from some lower-income communities tested positive for the coronavirus during the week of Dec. 14. At the time of the test, the children reported feeling no effects of COVID-19 – but they had come to a district-operated site, typically with family members, for a coronavirus test. Asymptomatic carriers can spread the disease to others and might later develop symptoms. The student positivity rate was 32% in the Maywood, Bell and Cudahy communities, where families have a median income of about $37,000, according to district data, and 25% in Mid-City, where the median income is about $41,000. In contrast, the rate was 4.3% in Venice, with a median income of about $73,000, and 7.1% in the Woodland Hills, West Hills and Tarzana area, with a median income of about $81,000.

Beloved El Paso, Texas teacher dies from COVID-19 as Governor presses schools to reopen – The death of 35-year-old El Paso, Texas, teacher Zelene Blancas last week underscores the homicidal character of the ruling class policy of reopening schools and non-essential businesses amid the raging COVID-19 pandemic. While her school and district were teaching remotely at the time Blancas tested positive on October 20, Texas Republican Governor Greg Abbott had pressured districts across the state to reopen, contributing to a major upsurge of the pandemic throughout the entire region. With Abbott renewing these efforts over the past month by seeking to tie school funding to districts’ reopening status, the district where Blancas taught, Socorro Independent School District, is now considering reopening in February. Blancas was hospitalized shortly after testing positive for COVID-19. She appeared to be gradually recovering over a few weeks, but then her oxygen levels suddenly dropped and she was intubated on November 22. In total, she spent two months in the hospital before dying of complications from COVID-19. Blancas had taught for over a decade, and most recently worked as a bilingual first-grade teacher at Dr. Sue A. Shook Elementary School. In 2018, millions of people watched and shared a video she posted on social media of her students greeting one another with their own chosen interactions. From the statements of her loved ones and coworkers, it is clear that the impact she had on both the students she taught and the community she loved reflected a deep commitment to education and a desire to reach every student regardless of his or her background or economic situation. Her humane efforts were not limited to the classroom. Following the mass shooting perpetrated by far-right domestic terrorist Patrick Crusius on August 3, 2019 that killed 23 and wounded another 23 at a local Wal-Mart in El Paso, Blancas organized a fundraising effort to raise awareness about bullying at her school. By any objective measure, Zelena Blancas was a pillar of kindness and humanity who improved anything she worked on and anyone she worked with. Her death is an enormous tragedy and traumatic event for her family, all those that knew her well and those for whom she was a beloved teacher.

Children’s Hospitals Grapple With Wave of Mental Illness – Efforts to contain the spread of the novel coronavirus in the United States have led to drastic changes in the way children and teens learn, play and socialize. Tens of millions of students are attending school through some form of distance learning. Many extracurricular activities have been canceled. Playgrounds, zoos and other recreational spaces have closed. Kids like Krissy have struggled to cope and the toll is becoming evident.Government figures show the proportion of children who arrived in emergency departments with mental health issues increased 24% from mid-March through mid-October, compared with the same period in 2019. Among preteens and adolescents, it rose by 31%. Anecdotally, some hospitals said they are seeing more cases of severe depression and suicidal thoughts among children, particularly attempts to overdose.The increased demand for intensive mental health care that has accompanied the pandemic has worsened issues that have long plagued the system. In some hospitals, the number of children unable to immediately get a bed in the psychiatric unit rose. Others reduced the number of beds or closed psychiatric units altogether to reduce the spread of covid-19.“It’s only a matter of time before a tsunami sort of reaches the shore of our service system, and it’s going to be overwhelmed with the mental health needs of kids,” said Jason Williams, a psychologist and director of operations of the Pediatric Mental Health Institute at Children’s Hospital Colorado.“I think we’re just starting to see the tip of the iceberg, to be honest with you.”Before covid, more than 8 million kids between ages 3 and 17 were diagnosed with a mental or behavioral health condition, according to the most recent National Survey of Children’s Health. Aseparate survey from the Centers for Disease Control and Prevention found 1 in 3 high school students in 2019 reported feeling persistently sad and hopeless – a 40% increase from 2009. The coronavirus pandemic appears to be adding to these difficulties. A review of 80 studies found forced isolation and loneliness among children correlated with an increased risk of depression.

Pennsylvania State System of Higher Education lays off educators, closes schools – The Pennsylvania State System of Higher Education (PASSHE), comprising 14 state-owned schools, is now engaged in what officials are dubbing a “system-wide redesign” plan and “retrenchment” process to increase student-faculty ratios. The restructuring plan involves laying off faculty members, increasing class sizes, shutting down a number of state system schools and purging academic programs. The school administration is claiming that the changes are being made with the aim of reducing tuition costs for students, but no tuition decreases have been promised or announced. As with hundreds of other colleges and universities around the country, at PASSHE the pandemic has prompted massive revenue shortfalls, compelling school officials to lay off faculty and staff and reduce educational opportunities for students. According to a recent article in the New York Times, when the pandemic hit last spring PASSHE officials estimated revenue loss of $52 million, resulting from a decline in enrollment and refunds for students who refused to attend schools that unsafely reopened. PASSHE officials issued a statement in April saying all 14 schools would have to immediately cut expenses, excluding the other state-funded universities of Penn State and Temple. The losses, it was assumed, would be offset by $39 million in federal refunds. However, the latest projections estimate an even larger deficit than initially expected. As for the promised tuition decrease, Republican State Representative Brad Roae, from Crawford County, stated in early December that it is too early to ascertain cost reduction in tuition: “In my opinion, it is too early to predict any specific possible decrease since some of the savings could be used to expand educational opportunities for high demand careers.” In July, the Pennsylvania General Assembly passed with overwhelming bipartisan support Act 50, which was signed into law by Democratic Governor Tom Wolf. The act reduces costs by closing, or in their language “merging,” some universities together and reducing faculty and academics: California with Clarion, Edinboro with Slippery Rock, and Lock Haven with Mansfield Universities. The process for these mergers will begin as early as 2022. By October, more than 100 tenured and tenure-track faculty members received a letter of retrenchment per the union contract, alerting them that they will lose their jobs by the end of the 2020 – 21 academic year. The faculty members affected work at Mansfield, Lock Haven, Indiana, Edinboro and Cheyney Universities. A jobs bloodbath is underway. More letters were sent to unsuspecting workers on December 15, right before the holiday season. On March 1, first-year faculty members will be notified if they will be terminated at the end of the term.

Amazon, JP Morgan, Berkshire Hathaway health care venture to disband –A high-profile joint venture from three of the country’s biggest-name companies aimed at lowering health care costs is disbanding after three years, a sign of how complex and difficult to disrupt the U.S. health care system is. The company, called Haven, was a joint venture of Amazon, JP Morgan Chase and Berkshire Hathaway and was announced with much fanfare at the beginning of 2018. But after three years without any major announcements or apparent breakthroughs in lowering health care costs and improving outcomes, the company said Monday it is disbanding. “In the past three years, Haven explored a wide range of healthcare solutions, as well as piloted new ways to make primary care easier to access, insurance benefits simpler to understand and easier to use, and prescription drugs more affordable,” the company said in a statement posted on its website. “Moving forward, Amazon, Berkshire Hathaway, and JPMorgan Chase & Co. will leverage these insights and continue to collaborate informally to design programs tailored to address the specific needs of their own employee populations. Haven will end its independent operations at the end of February 2021,” the statement added. The venture had announced Atul Gawande, a doctor and leading writer and thinker on health care, as its CEO, but he departed in May 2020, a move that raised questions about the direction of the company at the time. The heads of the three companies involved had acknowledged how thorny the problems in the U.S. health care system are at the time they launched the venture. “The ballooning costs of health care act as a hungry tapeworm on the American economy,” Warren Buffett, the chairman and CEO of Berkshire Hathaway, said in a press release in January 2018. “Our group does not come to this problem with answers. But we also do not accept it as inevitable. Rather, we share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes.”

Drugmakers kick off 2021 with 500 U.S. price hikes (Reuters) – Drugmakers including Abbvie Inc and Bristol Myers Squibb raised U.S. list prices on more than 500 drugs to kick off 2021, according to an analysis by health care research firm 46brooklyn. The hikes come as drugmakers are reeling from effects of the COVID-19 pandemic, which has reduced doctor visits and demand for some drugs. They are also fighting new drug price-cutting rules from the Trump administration, which would reduce the industry’s profitability. They include more than 300 price increases from companies like Pfizer and GlaxoSmithKline reported by Reuters late last week. Nearly all the increases were below 10%, and the median hike was 4.8%, down slightly from last year, 46brooklyn said. The firm’s analysis is based on data from Elsevier’s Gold Standard Drug Database. Abbvie raised prices on around 40 drugs including a 7.4% hike on rheumatoid arthritis treatment Humira, the world’s top-selling drug. Revenue from Humira is expected to top $20 billion next year. Bristol Myers hiked prices on around a dozen drugs, including cancer drugs Revlimid and Opdivo by 4.5 percent and 1.5 percent, respectively. It hiked the price of blood thinner Eliquis by 6 percent. It said in a statement that it only raised prices on drugs with ongoing clinical research. It expects net prices, which include rebates and other discounts, to fall this year.

World’s 500 Richest People Added $1.8 Trillion to Their Combined Wealth in 2020 – Bloomberg’s year-end report on the wealth of the world’s billionaires shows that the richest 500 people on the planet added $1.8 trillion to their combined wealth in 2020, accumulating a total net worth of $7.6 trillion. The Bloomberg Billionaires Index recorded its largest annual gain in the list’s history last year, with a 31% increase in the wealth of the richest people. The historic hoarding of wealth came as the world confronted the coronavirus pandemic and its corresponding economic crisis, which the United Nations last month warned is a “tipping point” set to send more than 207 million additional people into extreme poverty in the next decade – bringing the number of people living in extreme poverty to one billion by 2030. Even in the richest country in the world, the United States, the rapidly widening gap between the richest and poorest people grew especially stark in 2020. As Dan Price, an entrepreneur and advocate for fair wages, tweeted, the 500 richest people in the world amassed as much wealth in 2020 as “the poorest 165 million Americans have earned in their entire lives.” Nine of the top 10 richest people in the world live in the United States and own more than $1.5 trillion. Meanwhile, with more than half of U.S. adults living in households that lost income due to the pandemic, nearly 26 million Americans reported having insufficient food and other groceries in November – contributingto a rise in shop-lifting of essential goods including diapers and baby formula. About 12 million renters wereexpected to owe nearly $6,000 in back rent after the new year.Amazon founder Jeff Bezos is at the top of the list, with a net worth of $190 billion. Bezos added more than $75 billion to his wealth in 2020, as the public grew dependent on online shopping due to Covid-19 restrictions and concern for public health.While Bezos and a select few others in the U.S. have amassed historic gains in personal wealth in the last year, the federal government has yet to extend much in the way of meaningful assistance to struggling Americans. The Republican-led Senate on Friday continued to stonewall a vote on legislation that would send $2,000 checks to many American households.Senate Majority Leader Mitch McConnell (R-Ky.) denounced the proposal as “socialism for rich people” even though the plan includes a phaseout structure and individuals making only up to $115,000 per year – not those in the highest tax brackets – would receive checks.

World Bank report warns of extended downturn in global growth -The global economy faces at least a decade of low growth, wiping out limited gains in poverty reduction and per capita income growth. In addition, the risk is that a rise in COVID-19 infections, continued stagnant investment or a major financial crisis produced by the escalation of debt could result in an even worse outcome. That is the scenario set out by the World Bank in its semi-annual report on the state of the global economy issued on Tuesday. It said that at best the world faces a “slow and challenging economic recovery.” After a contraction of 4.3 percent in 2020, the bank forecast growth of 4 percent for 2021. However, that is based on a number of assumptions that are already in the process of being shattered. Its forecast was predicated on “proper pandemic management and effective vaccination limiting the spread of COVID-19 in many countries.” But as World Bank president David Malpass acknowledged, the rollout of vaccinations had already run into problems. “Even in advanced countries there have been difficulties in pushing ahead with vaccination programs, and that is true in poor countries as well,” Malpass said. Stronger language has been used elsewhere, with the situation in the US, the centre of the pandemic, being rightly described as “chaotic” and a “mess.” While he did not use the term, Malpass pointed to what has been characterised as “vaccine nationalism.” He noted that “advanced economies” had reserved vaccines beyond their capacity to distribute them, and expressed the hope that some of these supplies would be freed up for poorer countries. Even on the World Bank’s most optimistic scenario, the level of global gross domestic product in 2021 is expected to be 5.3 percent below pre-pandemic projection, equivalent to a loss of output of $4.7 trillion. Growth could be much lower. The report warned that if infections continued to rise – the present situation – and if vaccine rollouts experienced logistical problems – as is now the case – then global GDP may only expand by 1.6 percent this year. If financial stress, caused by rising debt, which was identified in the report as a significant risk, led to major corporate and government defaults then the world economy could contract again in 2021. The report noted that even if the pandemic is brought under control, its effect on global growth could be “longer lasting than expected.” Debt had surged above already-high levels and although banks were relatively well capitalized “a wave of bankruptcies could erode bank buffers, putting some countries at risk of financial crisis.”

Strikes spread across Spain as anger mounts at COVID-19 herd immunity policy – The last month of the year witnessed mass strikes and stoppages in Spain’s health care, transport, agriculture and industrial sectors. Further working-class resistance is emerging in January, as unemployment surged to 16 percent of the population, around 3.7 million workers. The COVID-19 pandemic has vastly intensified the struggle, as the ruling class seizes on the pandemic to slash wages and benefits and impose murderously unsafe working conditions. December started with the end of a 57-day strike by the dockworkers in Bilbao port, one of Spain’s largest ports. The 300 dockworkers denounced the “continuous breaches” of rest days, lack of staff and conditions of the machinery, and opposed the proposed wage cuts for senior workers and two-tier system. The trade unions have enforced the go-back-to-work order to take part in a mediation process. This peace, however, is only temporary. The last mediation meeting is set on January 13. Dockworkers are continuing to fight the consequences of the 2017 betrayal when the trade unions agreed 10 percent wage cuts and huge job losses in the form of early retirement schemes. In the north-western region of Galicia, a two-month strike by 600 metalworkers at Alcoa continues. Alcoa announced its decision to curtail the smelter’s 228,000 metric tons of annual capacity and proceed with the collective dismissal of workers at its aluminium plant. While the courts have struck down the measure, Alcoa workers continue to strike, aware that the company’s main aim is to close the plant or sell to Liberty House, another metal company which has not committed itself to securing the current jobs and wages. In Asturias, 1,300 steel workers from Daorje called two-hour work stoppages for a week against repeated breaches by the company. Daorje reacted by implementing a lockout. The unions cynically declared the lockout is illegal because it stopped workers who wanted to work against the union-led strike from doing so. In the same region, gold miners from OroValle carried out work stoppages during the first 48-hours of the year, at the beginning of each shift. The miners are protesting against a breach of the collective agreement. Further strikes are expected in January. In the Canary Islands, about a thousand postal workers of the publicly owned Correos postal service went on strike in late December against job cuts and the dismantling of the public service. In the past months, postal workers in other regions like Murcia, Almer’a, Gijon, Guadalajara or Madrid have also gone on strike against staff redundancies and excessive workload, provoked by the increase in demand due to the pandemic. The government’s heard immunity policy is provoking mass anger among workers. Overcrowding in the work centres and the lack of preventive measures have led to 9,300 COVID-19 infections or possible infections out of a total of 55,000 staff according to the unions. The PSOE-Podemos government, which manages Correos, refuses to disclose the extent of the infections among staff.

New year begins with record COVID-19 deaths in Germany – The new year began in Germany in an even more deadly fashion than the old one ended. Despite greatly reduced health authority capacity over the New Year holiday, the past seven days represented the worst week of the pandemic to date, with more than 4,500 deaths reported in Germany. On Tuesday, the Robert Koch Institute (RKI) – the government health agency – reported another 1,019 deaths and 21,237 infections within the previous hours. The situation in large parts of Germany is characterized by overcrowded crematoria, hospitals on the brink of collapse and mass death. According to the DIVI register, 82 percent of all intensive care beds in Germany are currently occupied, about a quarter, or 6,000, with coronavirus patients. More than half of these must be ventilated. Undertakers and crematoria report they can no longer keep up due to the large number of the dead. In Saxony in particular, additional storage capacity has already had to be created in several places, or the dead have been transported to crematoria far away where capacity is still available. At the same time, reports are piling up about hospitals and care facilities on the verge of collapse; overworked nursing staff; doctors making decisions about who can receive life-saving treatment and who cannot; and hospitals that can only maintain their operations with the support of the Bundeswehr (Armed Forces). The Vogtland region of Saxony leads the country in new infections, with an incidence value of 929 – meaning 929 out of 100,000 inhabitants, or just under 1 percent, have been infected with the virus, setting aside the number of unreported cases – in the past seven days. Of the 13 districts and cities in Saxony as a whole, only two have an incidence value below 300; all others are far above that. Large parts of Thuringia, northern Brandenburg and several districts in Bavaria also have similarly high numbers.

German teachers’ union backs in-person learning as COVID-19 deaths soar – The wave of deaths and new infections sweeping across Germany and Europe is the direct result of the policies of the federal and state governments. Businesses, schools and day care centres were kept open and the most basic safety standards disregarded to secure corporate profits. The current lockdown in Germany deliberately allows many businesses and schools to remain operational. In enforcing these inhumane policies, the federal and state governments, consisting of a broad range of political coalitions, can rely on the close cooperation of Germany’s trade unions. The German Trade Union Confederation (DGB) supported the billion-dollar bailout packages for banks and corporations back in March. IG Metall, Verdi and Germany’s other major unions subsequently did everything in their power to ensure that the country’s auto plants, distribution centres and public transport remained fully operational, even under the most adverse and unsafe conditions, thereby exposing workers to massive health risks. This was the path taken to make good the billions handed out to the rich. Schools and day care centres were also kept open to ensure that parents went to work, although it has been proven scientifically that schools are key factors for the spread of the pandemic. According to the figures issued by the main official health institute, Robert Koch Institute (RKI), over 20,000 teachers, teaching assistants and child care workers have been infected so far, along with 40,000 children. Seventeen teachers and care workers have died from COVID-19. The German government finally responded and announced the closure of schools, initially until January 10 and now until the end of the month, only after parents and teachers increasingly expressed their opposition and pupils took strike action to demand safe conditions. In fact, most of the current “lockdown” took place during the Christmas vacations when schools were closed anyway. In addition, schools and day care centres were specifically told to ensure in-person care for the children of workers employed in non-essential businesses, thereby turning schools into mere custodial institutions.

Scotland entering new lockdown until end of January – Scottish officials on Monday announced a host of new lockdown measures as the United Kingdom continues to react to the spread of a new, more infectious strain of COVID-19 that officials have blamed for a surge of new cases. The BBC reported that First Minister Nicola Sturgeon’s government will close places of worship, group exercise classes and other places where in-person gatherings occur, while schools will revert to online classes. The majority of the measures apply to the Scottish mainland, while outlying islands where the virus is spreading at a lower rate are being closely monitored. The new measures also include a stay-at-home order directing most workers to work from home, and restrictions on gatherings of individuals from separate households were also put in place. Sturgeon told reporters Monday that she was “more concerned about the situation we face now than I have been at any time since March last year,” according to the BBC, and added that a “steeply rising” rate of new cases threatened to overwhelm the country’s hospitals. “The Scottish government will do everything we can to speed up distribution of the vaccine. But all of us must do everything we can to slow down the spread of the virus,” Sturgeon said, according to the news agency. “We can already see – by looking at infection rates in the south of England – some of what could happen here in Scotland. To prevent that, we need to act immediately and firmly,” she added. The U.K., as a whole, reported nearly 55,000 new cases of COVID-19 on Sunday, one of its highest single-day totals since the pandemic began, and has reported the most cases of any European nation. Scotland has seen better control of the virus’s spread than England, according to a breakdown of regional data by The New York Times, and is currently reporting 2,475 cases per 100,000 citizens in comparison to 4,085 cases per 100,000 citizens in England. U.K. Prime Minister Boris Johnson instituted a series of new lockdown measures for the month of November and closed shops ahead of the Christmas holiday last year, and in December moved to implement a series of strict regional virus prevention measures to combat the continuing surge of new cases. The U.K. has also begun the distribution of two vaccines for COVID-19, one produced by Pfizer and BioNTech and another by the University of Oxford and AstraZeneca.

Hundreds of thousands in UK spend Christmas and New Year homeless as pandemic worsens – On any given day one in every 185 people in the UK do not have a home. The annual report by homeless charity Crisis issued last month is based on research by Heriot-Watt University. It states, “More than 200,000 households will be experiencing the worst forms of homelessness this Christmas, including sleeping on the streets, hunkered down in sheds and garages, stuck in unstable accommodation such as B&Bs or sofa surfing far away from their support networks…” The numbers of homeless has been rising for the past five years reaching a peak of 219,000 at the end of 2019 – up from 207,600 in 2018. Crisis attributes a slight drop this year to the effects of the Everyone In scheme which the Tory government was forced to bring in as it responded to the first wave of the COVID-19 pandemic. The scheme saw around 15,000 homeless put up in hotels or other emergency accommodation in an effort to control the number of pandemic cases that threatened to overwhelm the National Health Service. Homelessness is not only the visible form of those having to sleep rough on the streets, the report notes. More than nine in ten (95 percent) of homeless households in England are hidden from view, “drifting from sofa to sofa or trapped in insecure, temporary accommodation.” Crisis chief executive Jon Sparkes commented, “Homelessness is dangerous and devastating, and yet this Christmas there will be thousands of people sleeping on strangers’ floors, freezing in flimsy tents or trapped in rundown B&Bs with nowhere else to go and no one to be with. “It’s unquestionable that the emergency measures taken to support people sleeping rough into safe accommodation, and the introduction of a ban on evictions, had a significant impact and protected the lives of thousands. With the economic damage of the pandemic set to be long-lasting, and with millions expected to be out of work by early next year, there is a very real risk homelessness will increase unless urgent action is taken.” These calls have fallen on deaf ears. The Everyone In scheme was rapidly ended in May and replaced in September by a paltry £91.5 million fund. This was to be shared by fully 274 councils in order to fund their plans for rough sleepers over the next few months. It was topped up by just £15 million through the Protect Programme in November. A third lockdown is now underway with the government committing no more funding and Everyone In consigned to the scrapheap.

UK teaching unions call for no work in “unsafe schools” as opposition among educators mounts – Deaths from COVID-19 and new cases of the disease surged in the UK over the holiday period. The 454 deaths announced yesterday took the tally in the last eight days to 4,588. Over the same period, just under 400,000 new cases were detected. Almost 55,000 cases were announced yesterday, with over 50,000 cases announced daily over the previous five days. Hospitals in major cities are now so full of Covid cases that patients are having to be treated in ambulances on arrival or being sent elsewhere. According to a leaked National Health Service (NHS) email obtained by Sky News, intensive care units in three London hospitals – North Middlesex University Hospital, Barnet Hospital and Whittington Hospital – were “full” on New Year’s Eve. This left patients waiting to be transferred to other hospitals for critical care. Boris Johnson’s Conservative government has pursued a policy of herd immunity throughout the pandemic, allowing 2,654,779, people to be infected with the loss of over 75,000 lives according to official figures, and around 90,000 when Covid is mentioned on the death certificate. Today it is urging primary schools throughout England to reopen after the Christmas holiday. Schools have been a major vector for the spread of COVID-19, worsened by a new and more contagious variant of the disease. Despite this, Johnson stressed on Sunday’s BBC Andrew Marr Show that parents should send their children to school in all areas of England where they are open. His government views schools as holding pens that enable parents to go to work and keep the profits rolling in. Mass resistance to this murderous policy is growing and pressure from educators and parents, mainly organised on social media, has forced a crisis ridden and widely hated government to make several U-turns, including delaying the reopening of secondary schools until January 18.On Saturday, the government announced that all primary schools (children from four and 11) in London must remain closed at the start of the term. Previously it had insisted only those primaries in 22 of London’s 32 boroughs would be affected by closures. Primaries in 27 other local authorities in the UK have also been told to close for an indefinite period, meaning a million children will not return.Laura Duffel, a matron at a London hospital, told the BBC’s Radio Five Live Saturday, “We’ve have children coming in and it was minimally affecting children in the first wave… we now have a whole ward of children here. I know that some of my colleagues are in a similar position where they have whole wards of children with Covid.”

UK in third national lockdown as coronavirus surges out of control – Prime Minister Boris Johnson announced a third national lockdown in England yesterday. He said that people must stay at home for at least six weeks, except to go to workplaces, to buy food or medicines or exercise once a day. All schools, colleges and universities are closed from Tuesday.The lockdown is not as stringent as that imposed last March, with Johnson insisting that people should go to work if they cannot work at home to keep profits rolling in for the major corporations. Nurseries and early years providers offering 328,000 school-based nursery places for children will remain open. In addition, there are 120,000 children in special educational needs (SEN) schools and all together 270,000 children with an Education, Health and Care Plan (EHCP) which qualifies for them to be vulnerable and in school. There are tens of thousands of staff who support SEN children. The least likely to be able to follow social distancing measures because of their age are staying in school thereby increasing the risk to staff.Detailing the horrific consequences of his murderous “herd immunity” agenda, Johnson said, “In England alone, the number of Covid cases in hospitals has increased by almost a third in the last week to almost 27,000. And that number is 40 percent higher than the first peak in April.” On December 29, more than 80,000 people tested positive for Covid across the UK, “a new record,” and “the number of deaths is up by 20 percent over the last week and will sadly rise further”.The National Health Service (NHS) could no longer cope with the spread of the disease. The “UK’s chief medical officers [of England, Wales, Scotland and Northern Ireland] have advised that the country should move to alert level 5, meaning that if action is not taken NHS capacity may be overwhelmed within 21 days,” he said. It was previously at 4 across the UK. The Guardian reported that going to level 5 was recommended by the Joint Biosecurity Centre before receiving the agreement of the chief medical officers.The scale of deaths in Britain is staggering, with the record for new cases broken almost on a daily basis. On Monday, another 407 deaths to COVID-19 were announced and a record 58,784 new cases. In the 10 days since December 26, 5,205 people have died of COVID-19, with 490,412 new cases of the disease recorded. This represents 18 percent of the total of 2,713,563 cases since the virus was first detected in the UK just over 11 months ago, on January 31, 2020.

COVID-19 deaths surge amid record new cases as Britain enters lockdown – Another 830 COVID-19 deaths were announced Tuesday, just hours before today’s national lockdown in Britain comes into operation. Daily cases hit a record of 60,916 – the eighth successive day with over 50,000. In the 11 days since December 26, there were 6,035 Covid deaths and over half a million new cases (551,328). At a Downing Street press conference yesterday, Prime Minister Boris Johnson was forced to acknowledge that more than 1.1 million people now had the virus in England. Chief Medical Officer Chris Whitty revealed that on September 10, due to the previous lockdown, only one in 900 people in England had the virus. By this week, one in 50 have it and one in 30 in London. A new more contagious variant of COVID-19 was first detected in Kent in south-east England in September. The same herd immunity agenda allowed it to spread uncontrollably, with the economy fully reopened along with schools, colleges and universities that became major vectors of spread. The greater south-east area of England (London, South East and East) – covering a population of 15.7 million people, including a labour force of 8.1 million – is now an epicentre of the pandemic. According to the Office for National Statistics, the new variant may already be responsible for 60 percent of all new cases. Public health services are unable to cope, with Lincoln County Hospital the latest forced to declare a “critical situation”. The new lockdown coming into effect today falls well short of that imposed in March last year. While instructing people to stay at home for the seven-week duration, much of the economy will remain open with Johnson insisting that people go to work if they cannot work at home. Non-essential retail, hospitality and personal care services will be closed, but restaurants are able to continue takeaway services and offer deliveries. Pubs can offer a takeaway food service, coffee and soft drinks. Hotels and holiday accommodation can remain open for a small number of guests. Workers involved in cleaning and building work in other people’s houses are allowed to continue. Estate agents are permitted to work and property viewings can still take place. Criminally, nurseries and early years providers offering 328,000 school-based places for children will remain open. In addition, there are 120,000 children in special educational needs (SEN) schools and a total of 270,000 children with an Education, Health and Care Plan (EHCP) qualifying them as vulnerable able to stay in school. There are tens of thousands of staff who support SEN children. In-person tuition at colleges and universities is also able to continue for “practical courses” such as medicine, nursing, social work and education. Premier League soccer is being allowed to continue, despite reporting yesterday that 40 players and club staff tested positive for coronavirus over the past week.

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