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 new 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 more 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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I have included some articles on the southern border immigrant surge since that is presenting COVID concerns.
The Fed has embraced the ‘punchbowl’ and has no intention of taking it away – The Federal Reserve has come a long way from the days of warning about “irrational exuberance.” Former Fed Chairman Alan Greenspan famously sent up a flare in December 1996 about stretched asset valuations triggered by wild dot-com speculation that had produced an unbridled bull market. It took three years for the warning from “The Maestro” to come true, but the statement is still considered a seminal moment in market history where a Fed leader issued such a bold warning that went unheeded. Flash forward 25 years and the attitude from the Fed is considerably different, even though market valuations look a lot like they did back around the time the dot-com bubble burst. Central bank officials repeatedly have been given the opportunity to advise caution on asset valuations, and each time they have largely passed. Other than acknowledging that prices are higher than normal in some instances, Fed speakers have largely attributed market moves as the product of an improving economy buoyed by aggressive fiscal stimulus and low interest rates that will be in place for years. Just a few days ago, San Francisco Fed President Mary Daly spoke on the issue and said the Fed has no intention of tightening policy even in the face of roaring bull markets across several asset classes. “We won’t be preemptively taking the punchbowl away,” Daly said during a virtual Q&A on Wednesday. The “punchbowl” metaphor was interesting in that the term became a bit of a pejorative following the 2008 financial crisis. Its origin in policy circles dates to William McChesney Martin, the longest-serving Fed chairman who held the position from 1951-70. The Fed’s role, Martin said, was to act as a “chaperone who has ordered the punchbowl removed just when the party was really warming up.” The statement delineated the cautionary role the Fed should be playing when it spots signs of excess. Taking away the punchbowl ‘doesn’t work now’ But Daly implied that such a duty either does not exist today or is not relevant to the current situation. “That’s something that worked maybe in the past, definitely doesn’t work now, and we’re committed to leaving that punchbowl or monetary policy accommodation in place until the job is fully and truly done,” she said.
Larry Summers Warned About Inflation. Fed Officials Push Back. – NY Times — Federal Reserve officials pushed back on Thursday against concerns raised by two prominent economists – Lawrence H. Summers, the former Treasury secretary, and Olivier J. Blanchard, a former chief economist at the International Monetary Fund – that big government spending could overheat the economy and send inflation rocketing higher. Those warnings have grabbed headlines and spurred debate over the past two months as details of the federal government’s $1.9 trillion pandemic relief bill came together. Mr. Summers in particular has kept them up since the legislation passed, saying it was too much on the heels of large spending packages last year. He recently called the approach the “least responsible” fiscal policy in 40 years while predicting that it had a one-in-three chance of precipitating higher inflation and maybe stagflation, or a one-in-three chance of causing the Fed to raise rates and pushing the economy toward recession. But two leaders at the Fed, which is tasked with using monetary policies to keep inflation steady and contained, gave little credence to those fears on Thursday. Richard H. Clarida, the central bank’s vice chairman, and Charles Evans, the president of the Federal Reserve Bank of Chicago, both responded to questions specifically about Mr. Summers’s and Mr. Blanchard’s warnings. “They have both correctly pointed out that the U.S. has a lot of fiscal support this year,” Mr. Clarida said on an Institute of International Finance webcast. “Where I would disagree is whether or not that is primarily going to represent a long-term, persistent upward risk to inflation, and I don’t think so.” Mr. Clarida said that there was a lot of room for the economy to recover – some 9.5 million jobs that were lost during the pandemic are still gone – and that the effect of the government’s relief spending would diminish over time. He also said that while spenders had pent-up demand, there was also pent-up supply because the service sector had been shut for a year. “At the Fed, we get paid to be attentive and attuned to inflation risks, and we will be,” Mr. Clarida said. But he noted that forecasters didn’t see “undesirable upward pressure” on inflation over time. Mr. Evans told reporters on a call that he wasn’t sure what “overheating” – the danger that top economists have warned about – actually meant. “First off, there’s a conversation of is this the best way to spend money,” he summarized, adding that he didn’t have anything to say about that. “But then there’s sort of like, ‘Oh, this is so much that it is going to overshoot potential output, and there’s a risk that we’re going to get overheating, and then inflation.'” He continued: “What is the definition of overheating? It’s a great word, it evokes all kinds of images, but it’s kind of like potential output is always a strange concept anyway. Can output be too high?”
Chicago Fed: “Index suggests economic growth declined in February” – “Index suggests economic growth declined in February.” This is the headline for this morning’s release of the Chicago Fed’s National Activity Index, and here is the opening paragraph from the report: Led by declines in indicators related to production and personal consumption and housing, the Chicago Fed National Activity Index (CFNAI) fell to – 1.09 in February from +0.75 in January. Two of the four broad categories of indicators used to construct the index made negative contributions in February, but all four categories decreased from January. The index’s three-month moving average, CFNAI-MA3, decreased to – 0.02 in February from +0.46 in January. [Download report] The Chicago Fed’s National Activity Index (CFNAI) is a monthly indicator designed to gauge overall economic activity and related inflationary pressure. It is a composite of 85 monthly indicators as explained in this background PDF file on the Chicago Fed’s website. The index is constructed so a zero value for the index indicates that the national economy is expanding at its historical trend rate of growth. Negative values indicate below-average growth, and positive values indicate above-average growth. The first chart below shows the recent behavior of the index since 2007. The red dots show the indicator itself, which is quite noisy, together with the 3-month moving average (CFNAI-MA3), which is more useful as an indicator of the actual trend for coincident economic activity.
Q4 GDP Growth Revised up to 4.3% Annual Rate; PCE Growth Revised Down to 2.3% From the BEA: Gross Domestic Product, (Third Estimate), GDP by Industry, and Corporate Profits, Fourth Quarter and Year 2020: Real gross domestic product (GDP) increased at an annual rate of 4.3 percent in the fourth quarter of 2020, according to the “third” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 33.4 percent.The “third” estimate of GDP released today is based on more complete source data than were available for the “second” estimate issued last month. In the second estimate, the increase in real GDP was 4.1 percent. The upward revision primarily reflected an upward revision to private inventory investment that was partly offset by a downward revision to nonresidential fixed investment Here is a Comparison of Second and Advance Estimates. PCE growth was revised down to 2.3% from 2.4%. Residential investment was revised up from 35.8% to 36.6%. This was above the consensus forecast.
Q1 GDP Forecasts — Note that the forecasts of the automated systems (based on released data) are declining, whereas the forecasts of economists have been increasing anticipating strong growth in economic activity in Marchdue to the American Rescue Plan Act of 2021. From BofA yesterday: “Total card spending, as measured by BAC aggregated card data, increased 45% 1-yr and 23% 2-yr for the 7-days ending Mar 20. The strong gain owes to the latest stimulus: total card spending for stimulus recipients is running 40% above the Feb avg.” From Merrill Lynch: 1Q GDP tracking stands at 7.0% qoq saar. [Mar 26 estimate] From Goldman Sachs: We left our Q1 GDP tracking estimate unchanged at +7.5% (qoq ar). [Mar 26 estimate] From the NY Fed Nowcasting Report The New York Fed Staff Nowcast stands at 6.1% for 2021:Q1 and 0.7% for 2021:Q2. [Mar 26 estimate] And from the Atlanta Fed: GDPNow:The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2021 is 4.7 percent on March 26, down from 5.4 percent on March 24. [Mar 26 estimate]
Social Security gives IRS data to speed delivery of COVID-19 relief checks -The Social Security Administration (SSA) on Thursday sent the IRS data necessary to deliver coronavirus stimulus checks to people receiving government assistance after lawmakers expressed alarm that the payments were delayed. President Biden on March 11 signed into law Democrats’ $1.9 trillion COVID-19 relief package, which provides relief checks of up to $1,400 per person, similar to previous rounds of direct payments. But nearly 30 million people receiving Social Security and Supplemental Security Income benefits had yet to automatically receive their checks. The delay was a result of the SSA being unable to immediately transfer data to the IRS upon the law’s enactment on those beneficiaries who don’t have to file tax returns because their incomes fall below the minimum threshold. A spokesperson for the SSA told The Hill on Wednesday evening that the agency didn’t have the authorization to send the beneficiary files before the pandemic relief law was enacted, despite preliminary discussions with the IRS. The SSA had to first establish a reimbursable agreement with the IRS to fund the work providing the files, and then had to test the new system. But the agency had expected to deliver the final files to the IRS by Thursday. Senior Democrats on the House Ways and Means Committee had demanded Wednesday that the SSA deliver the beneficiary information to the IRS within 24 hours. The lawmakers said Thursday that they were informed by the SSA that it had transmitted the files to the IRS at 8:48 a.m. “We are gratified that the SSA leadership finally recognized the urgency of the moment and acted swiftly on our ultimatum,” House Ways and Means Committee Chairman Richard Neal (D-Mass.) and Democratic Reps. Bill Pascrell (N.J.), Danny K. Davis (Ill.) and John Larson (Conn.) said in a joint statement. “The delays imposed by [SSA] Commissioner [Andrew] Saul defied congressional intent and imposed needless anxiety and pain on taxpayers. Now the IRS needs to do its job and get these overdue payments out to suffering Americans. Further delays will not be tolerated by this committee,” the lawmakers added. The Ways and Means members had also expressed concern about delayed stimulus checks for people who receive Veterans Affairs and Railroad Retirement Board benefits and similarly don’t normally have to file tax returns and should receive checks automatically based on their beneficiary status. Those agencies also only just transmitted information on beneficiaries to the IRS this week. Despite the delay, Saul said the SSA ultimately provided the IRS with the necessary files about a week faster than it did during the first round of stimulus checks last year.
USDA increasing SNAP benefits with pandemic relief funds – The U.S. Department of Agriculture (USDA) announced on Monday that it would be increasing Supplemental Nutrition Assistance Program (SNAP) benefits, also known as food stamps, by 15 percent through funds from Democrats’ $1.9 trillion COVID-19 relief bill. According to a press release from the White House, the increase will provide around $3.5 billion to around 41 million people in households experiencing food insecurity, working out to an average $28 more per person every month, varying from state to state. “We cannot sit by and watch food insecurity grow in the United States,” Agriculture Secretary Tom Vilsack said in the release. “The American Rescue Plan brings help to those hurting the most due to the pandemic. It increases SNAP benefits so households can afford to put food on the table. It invests in working people and small towns and small businesses to get the economy back on track. And it makes the most meaningful investments in generations to reduce poverty.” The USDA plan will also provide $1 billion in nutrition assistance to Puerto Rico, the Northern Mariana Islands and American Samoa. An additional $1.135 billion will be provided to U.S. states over three years, which they will not be required to match. The additional funds will also go toward expanding online SNAP purchases as well as the development of “mobile payment technologies,” to help with SNAP benefits. “With these investments, we hope to make it easier for participants, especially individuals in rural areas, as well as those with physical limitations, to order and pay for their groceries online,” the USDA said in its plan.
Democrats Continue to Prop Up High Cost Medical System by Buying Health Insurance -When Democrats pushed through a two-year expansion of the Affordable Care Act in the covid-relief bill this month, many people celebrated the part that will make health insurance more affordable for more Americans.But health care researchers consider this move a short-term fix for a long-term crisis, one that avoids confronting an uncomfortable truth: The only clear path to expanding health insurance remains yet more government subsidies for commercial health plans, which are the most costly form of coverage.The reliance on private plans – a hard-fought compromise in the 2010 health law that was designed to win over industry – already costs taxpayers tens of billions of dollars each year, as the federal government picks up a share of the insurance premiums for about 9 million Americans.The ACA’s price tag will now rise higher because of the recently enacted $1.9 trillion covid relief bill. The legislation will direct some $20 billion more to insurance companies by making larger premium subsidies available to consumers who buy qualified plans.And if Democrats want to continue the aid beyond 2022, when the relief bill’s added assistance runs out, the tab is sure to balloon further.”The expansion of coverage is the path of least resistance,” said Paul Starr, a Princeton University sociologist and leading authority on the history of U.S. health care who has termed this dynamic a “health policy trap.””Insurers don’t have much to lose. Hospitals don’t have much to lose. Pharmaceutical companies don’t have much to lose,” Starr observed. “But the result is you end up adding on to an incredibly expensive system.”By next year, taxpayers will shell out more than $8,500 for every American who gets a subsidized health plan through insurance marketplaces created by the ACA, often called Obamacare. That’s up an estimated 40% from the cost of the marketplace subsidies in 2020, due to the augmented aid, data from the nonpartisan Congressional Budget Office indicates.Supporters of the aid package, known as the American Rescue Plan, argue the federal government had to move quickly to help people struggling during the pandemic.
Congress passes two-month PPP extension — Bankers were quick to applaud Congress for passing the Paycheck Protection Program Act Extension Act. The bill, which was approved by the Senate Thursday after clearing the House of Representatives last week, extends the program’s funding authority from March 31 to May 31. The bill, which President Biden is expected to sign it shortly, also gives the Small Business Administration until June 30 to process applications. “Providing an additional two months for small business borrowers to access PPP funding and an extra month for SBA to process PPP loans is a common-sense step that will support the economic recovery,” American Bankers Association President and CEO Rob Nichols said in a press release. “The banking industry has moved heaven and earth to remain a source of strength for small businesses and welcomes the extended timeline to assist even more of the hardest-hit businesses through this program,” Richard Hunt, president and CEO of the Consumer Bankers Association President and CEO, said in a separate release. With the extension of the PPP’s lending authority all but assured, the question shifts to how long the remaining funding, estimated at about $79 billion, will last. Though a number of large lenders have stopped accepting applications, many including Truist Financial have indicated that they would consider reopening their portals if Congress extended the program. JPMorgan Chase, the nation’s biggest PPP lender, plans to extend its PPP lending activity following the Senate vote, a spokeswoman said.
As COVID-19 surges in Europe, NATO steps up threats against Russia and China – As COVID-19 cases and variants spread across Europe, NATO foreign ministers met in two days of talks in Brussels that ended yesterday. The summit again exposed the NATO governments’ utter contempt for human life. NATO, the alliance between the United States, Canada and Europe that includes most of the world’s wealthy countries, has seen over 1.3 million of its citizens die of COVID-19. Its collective military spending in 2020, of $1.03 trillion, dwarfs the projected cost of vaccinating the world’s population, projected at roughly $100 billion. Yet the summit announced no new measures on the pandemic, launching instead a NATO 2030 initiative to prepare for nuclear war with Russia and China. The first major NATO summit since Joe Biden’s inauguration as US president, it was billed as an attempt to reaffirm US commitment to NATO after the public breakdown of relations between the European powers and Biden’s predecessor, Donald Trump. Trump not only mocked NATO as “obsolete” but threatened European powers with hundreds of billions of dollars in trade war tariffs and speculated about using nuclear weapons in Europe. The summit opened on Tuesday with a joint press conference between US Secretary of State Antony Blinken and NATO Secretary-General Jens Stoltenberg. Blinken began by stressing both the current “pivotal moment” for the NATO alliance and “the United States’ steadfast commitment to that alliance. … I’ve come to Brussels because the United States wants to rebuild our partnerships, first and foremost, with our NATO allies. We want to revitalize the alliance to make sure it’s as strong and effective against the threats of today as it has been in the past.” The conference showed that NATO is trying to band together on a program of “herd immunity” against their populations at home and military threats abroad. They are plunging trillions into their militaries – made available by maintaining nonessential production and thus ensuring continued mass infections among workers – in order to further threaten Russia and China. Stoltenberg set out the summit agenda. “I strongly welcome the Biden administration’s message on rebuilding alliances and strengthening NATO. This is what our NATO 2030 initiative is all about. Because we face great global challenges: Russia’s destabilizing activities, the threat of terrorism, cyber attacks and nuclear proliferation, disruptive technologies, and the rise of China, and the security impact of global warming and climate change.” The claim that the NATO alliance supports deterrence – that is, policies to discourage the use of nuclear weapons – is a fraud. Its members, led by the United States, have scrapped multiple arms control treaties, including the Anti-Ballistic Missile treaty in 2001 and the Intermediate-range Nuclear Forces treaty in 2018, in order to escalate pressure on Russia and China. Stoltenberg dishonestly blamed the resulting nuclear arms race not on NATO, which canceled the arms control treaties, but on its targets.
US attempting to house 15K unaccompanied immigrant children — US government officials are scrambling to find bed space for some 15,500 unaccompanied immigrant children who have poured over the southern border in record numbers. US Customs and Border Protection officials reported Saturday that more than 5,000 minor immigrants are being held in facilities along the Mexican border – including a make-shift tent facility in southern Texas, CBS News reported. Nearly 10,500 others are being sheltered in emergency shelters by the Department of Health and Human Services, CBS said. The border crisis comes as Homeland Security Secretary Alejandro Mayorkas said Sunday that unaccompanied minors will not be turned away. But border officials are being overwhelmed by the numbers – more than 9,400 children crossed the border illegally last month, a February record, and the number is expected to spike again this month when more than 500 migrant minors are crossing daily. “The staggering number of children in CBP custody is both heartbreaking and profoundly concerning,” The children, who enter the US without their parents or another adult, are now spending an average of 136 hours in border patrol custody before being turned over to Heath and Human Services. The amount of time allowed under US law is 72 hours. HHS has been forced to open emergency makeshift facilities, including one in Pecos, Texas that was initially expected to accommodate 500 children. But the facility, once used to house oil workers, could be expanded to house as many as 2,000 of the unaccompanied children, CBS said.
Texas Democrat’s office reveals photos of crowded Border Patrol facility –Photos released by Rep. Henry Cuellar’s (D-Texas) office on Monday revealed crowded conditions in a temporary Customs and Border Protection (CBP) facility as the number of migrants trying to cross the southern border grows. The photos taken over the weekend show the makeshift accommodations for migrant children in an overflow facility in Donna, Texas. Many of the migrants are wearing masks, but are placed closely together amid the COVID-19 pandemic inside rooms walled off by what appears to be a clear tarp-like material. The Biden administration has not allowed independent journalists to visit the migrant holding facilities. Some lawmakers like Cuellar have visited the sites, however. A spokesperson for Cuellar declined to say who provided the photos to the border-district lawmaker. Cuellar told Axios, which first obtained the photos, that the facility amounted to “terrible conditions for the children” and that they should be moved into care from the Department of Health and Human Services instead of Customs and Border Protection. Homeland Security Secretary Alejandro Mayorkas said on CNN’s “State of the Union” on Sunday that the Biden administration is “working around the clock to move those children out of the Border Patrol facilities into the care and custody of the Department of Health and Human Services that shelters them.” “I have said repeatedly from the very outset that a Border Patrol station is no place for a child,” Mayorkas said. The Homeland Security secretary cited the ongoing COVID-19 pandemic for declining to allow reporters to view the southern border facilities, including during a visit with a bipartisan group of senators last week. Mayorkas also told “Fox News Sunday” that the administration is “working on providing footage so that the American public can see the Border Patrol stations.” CBP announced the opening of the Donna facility in February to provide extra processing capacity for migrants in its custody while a permanent processing center in McAllen, Texas, is undergoing renovations.
ICE inks $86.9 million deal to lodge migrants in hotels — US Immigration and Customs Enforcement has inked an $89.6 million contract with a Texas nonprofit to shelter Central American migrants in hotel rooms while the feds process a massive backlog of new arrivals at the border, according to the agency and reports.The eight-figure deal was announced Saturday, as migrants continued to arrive at the border at a ratenot seen in 20 years, including unaccompanied children crammed into jail-like detention centers to await transfer to federal shelters across the country.ICE “has signed a short-term contract with the non-profit division of Endeavors to provide temporary shelter and processing services for families who have not been expelled and are therefore placed in immigration proceedings for their removal from the United States,” said ICE Acting Director Tae D. Johnson in a statement. “The $86.9 million contract provides 1,239 beds and other necessary services.”The families will be put up in hotels close to the border, including in Texas and Arizona, under the deal, which is set to run six months but could be extended, Axios reported, citing officials from the federal Department of Homeland Security.Jon Allman, CEO of the San Antonio-based Endeavors, told Fox Business that the contract includes “critical services to migrant families, which is a continuation of services we have delivered to the migrant population since 2012.” Added Johnson, “The families will receive a comprehensive health assessment that includes COVID-19 testing.”
Rio Grande Valley border agents releasing migrants without court dates: reports –Border agents in the Rio Grande Valley were reportedly authorized on Sunday to release adults and families from U.S. custody before they’ve been given a date to appear in court for their hearings. The move from Customs and Border Protection (CBP) is “intended to mitigate operational challenges, including risks to national security, during significant surges of illegal migration as currently exist in the Rio Grande Valley,” according to documents obtained by NBC News. NBC notes that this procedure is a departure from CBP normally providing migrants with a “notice to appear” before they are released or sent to Immigration and Customs Enforcement (ICE). “In some cases, families are placed in removal proceedings further along in the release process rather than while they are at the Border Patrol station,” a CBP spokeswoman told NBC News. “All families, however, are screened at the Border Patrol station, including the collection of biographical and biometric information and criminal and national security records checks.” The Hill has reached out to CBP for further comment. Migrants who spoke to NBC said they were asked for contact information by border agents upon being released and were given documents that had “to be determined” court dates. They were reportedly told that they would be contacted within 30 days. However, other migrants said their contact information was not taken before being released and were instead given documents they were told to show local authorities if they were stopped while in the U.S. NBC reports that releasing adults and families will free up space for the surge of unaccompanied minors at the border. A report from Saturday found that there were 15,000 unaccompanied minors in U.S. custody. Hundreds of these minors have been kept in custody for longer than is legally allowed.
HHS asks Pentagon to house migrant children at two Texas bases – The Department of Health and Human Services (HHS) has asked the Pentagon to temporarily house unaccompanied migrant children at two Texas military installations, the Department of Defense (DOD) confirmed Tuesday. HHS sent a request for assistance to the Pentagon for specific use of a vacant dorm at Joint Base San Antonio, in Lackland, and vacant land at Fort Bliss outside of El Paso, Pentagon spokesman John Kirby told reporters. Kirby could not say if the request included the number of children that would be housed at each location, saying he had not seen the document and referring further questions to HHS. “We have just received this request so I don’t have much more detail than that. We’ll analyze it and evaluate it just like we would any other request for assistance,” he said. The two bases had previously not been disclosed as under consideration to house migrant children, who have increased in number at the southwestern border in recent months. While the Biden administration is deporting most single adults and families attempting to cross the border illegally, it is not doing the same to unaccompanied children. HHS-run shelters typically house the minors before they can be released to parents or other sponsors in the United States, but the department’s facilities have become strained under the current flood of border crossings. Homeland Security Secretary Alejandro Mayorkas acknowledged last week that the number of attempted crossings at the U.S.-Mexico border is expected to reach its highest level in 20 years. The Pentagon revealed in early March that the Biden administration was considering Fort Lee, Va., about 30 miles south of Richmond, as a possible location to place some children and had conducted a site assessment. DOD has not yet received a formal request for assistance from HHS to use the Army facility. Kirby said HHS also held a site assessment at Joint Base San Antonio last week. He did not have information about such a visit to Fort Bliss. He added that he did not know of any other U.S. military locations under consideration by HHS. The United States in the past has used military bases to house unaccompanied children. In 2014 during the Obama administration, Joint Base San Antonio in Lackland; Naval Base Ventura County, Calif.; and Fort Sill, Okla., housed roughly 7,500 unaccompanied minors from Central America, but closed after four months. In 2019 under the Trump administration, the Pentagon was asked to find space to house up to 5,000 immigrant children.
Biden administration to open second facility for migrant children in Texas – The Biden administration plans to open a second facility to house migrant children in Texas amid a surge in accompanied minors traveling across the U.S.-Mexico border, officials said Tuesday. A spokesperson for the Department of Health and Human Services’s (HHS) Office of Refugee Resettlement (ORR) said in a statement that the second facility in Carrizo Springs, Texas, will have the capacity to house 500 children, with the possibility of additional semi-permanent housing in the future. The official said the facility will open when it “is ready to safely receive children,” adding it will serve as another location to “ensure children are moved into ORR shelters, where children receive educational, medical, mental health, and recreational services until they can be unified with families or sponsors without undue delay.” The announcement comes after the Biden administration faced bipartisan criticism for reopening a Trump-era facility for migrant children, also in Carrizo Springs, last month. While lawmakers and immigration advocates accused President Biden of hypocrisy after condemning the Trump administration’s treatment of migrants at the border, White House press secretary Jen Psaki said at the time that the use of the facility for migrant children was a “temporary reopening during COVID-19.” “To ensure the health and safety of these kids, [HHS] took steps to open an emergency facility to add capacity where these kids can be provided the care they need before they are safely placed with families and sponsors,” she added. Psaki said the Carrizo Springs location, which was open for one month under the Trump administration, was needed to adhere to social distancing guidelines amid the pandemic. The original Carrizo Springs facility houses up to 700 migrants ages 13 to 17, and while the ORR spokesperson said Tuesday that the office has “worked to build up its licensed bed capacity to about 13,500 beds” they said that “additional capacity is urgently needed to manage both enhanced COVID-19 mitigation strategies and the increasing numbers of UC referrals from DHS.” The spokesperson added that it is implementing certain measures to ensure the safety and wellbeing of children in the facilities, including implementing COVID-19 mitigation strategies, reducing the amount of time it take to unify an unaccompanied minor with a sponsor and establishing emergency intake sites to reduce overcrowding in Customs and Border Protection (CBP) facilities. All children age 17 and younger who are found unaccompanied at the Southern border are transferred from the Department of Homeland Security (DHS) to the HHS refugee office. The plans shared by the ORR spokesperson come the same day the Department of Defense (DOD) confirmed that HHS has asked the Pentagon to temporarily house unaccompanied migrant children at two Texas military installations. Pentagon spokesman John Kirby did not specify while speaking to reporters if the request included the number of children that would be housed at each location, adding he had not seen the document and referring further questions to HHS.
San Diego Convention Center to be used by Biden administration to detain 1,400 migrant children – Federal officials announced Tuesday that the San Diego Convention Center in downtown San Diego, California, will be used to hold up to 1,400 unaccompanied migrant children. The Biden administration is currently detaining over 14,000 children in federal custody. Over 9,500 children are held by the Department of Health and Human Services (HHS), while the remaining 4,500 are in the custody of Customs and Border Protection (CBP). The move to place 1,400 children in the convention center comes as photos have surfaced showing children sleeping on thin mats on hard floors in dire and overcrowded Customs and Border Protection holding cells. Earlier this week Representative Henry Cuellar (Democrat, Texas) shared photos of the facility in Donna, Texas, which is comprised of eight plastic sided “pods,” each with a 260-person occupancy, noting that one overcrowded pod held over 400 male minors. The Office of Refugee Resettlement (ORR), part of the US Department of Health and Human Services, is responsible for the unaccompanied minors and normally runs 13,500 beds in official state-licensed immigration prisons for children. Responding to the recent surge in unaccompanied minors, the ORR has turned to other facilities and has added 7,852 beds, including the San Diego Convention Center, which could begin to hold children as soon as this weekend. A second facility for holding up to 500 children is being opened in Carrizo Springs, Texas, and HHS officials are seeking approval from the Pentagon to use an empty dormitory at Joint Base San Antonio and open land at Fort Bliss in El Paso for additional detention centers. Posing as a humanitarian, San Diego’s Democratic mayor Todd Gloria explained to reporters on Tuesday, “What we have are young people who are in unacceptable conditions and this condition [the convention center] can be better for them.” HHS plans to operate the site for three months with children held for up to 35 days in the convention center before being transferred to the custody of family or a guardian in the US. Gloria and San Diego County Board of Supervisors Chair Nathan Fletcher released a statement on Monday stating that the children “will be provided with food, medical care, a place to sleep and showers. A safe and secure recreation area will also be created on the exterior of the facility. The children are not permitted to leave the convention center until reunification occurs.” While the center is being hailed as a more “humane” place to hold children, the reality is that it remains a prison, one in full violation of the immigration laws to protect children from being detained for longer than 72 hours before being placed with a sponsor or family member.
Biden administration prepares to escalate deportations of families detained at the border — Department of Homeland Security (DHS) data leaked to Axios indicates the Biden administration utilized “Title 42” to deport approximately 13 percent of the more than 13,000 migrants attempting to cross the US – Mexico border as a family between March 14 and March 21. According to the data, 42 percent of families were expelled to Mexico last month, down from 64 percent in January and 91 percent in October. The fall in the share of families being deported comes as the number of migrants, including unaccompanied children, crossing and being detained at the US – Mexico border has risen sharply. In addition to US immigration detention centers being overcrowded, Mexico has been unable to take in more families expelled from the US. However, the Axios report made clear that the Biden administration is working to ramp up deportations. A DHS spokesman told the website that the US is “working with our partners in Mexico to increase their capacity.” White House Press Secretary Jen Psaki said at her regular press briefing Monday that there had been a delay in deportations in recent weeks since it “takes a minute to ensure there is proper transportation and steps in place to do that.” Psaki insisted that there are only “narrow, narrow circumstances in which families can’t be expelled.” Title 42 is a provision of federal law allowing the US government to deny migrants’ right to apply for asylum on American soil. Citing health concerns over COVID-19, the Biden administration deported more than 70,000 migrants under the law in February. At the time, this accounted for 70 percent of migrants detained that month. Families that have not been immediately kicked back to Mexico face an uncertain future. They will be allowed to remain in the US as they go through immigration proceedings. However, there is no guarantee the migrants will be granted asylum. Because immigration proceedings can take years, families could make a new home in America, only to be forcibly removed some time later. Despite the increase in migrants being allowed into the US, the Biden administration has declared that migrants who are caught crossing the border outside official ports of entry will eventually be sent back to Mexico. “Our policy remains that families are expelled, and in situations where expulsion is not possible due to Mexico’s inability to receive the families, they are placed into removal proceedings,” a DHS spokesperson told Axios . .”
Reporters ask Biden zero questions on COVID-19 –President Biden didn’t get a single question at his first press conference about the coronavirus pandemic that has been the biggest story for the last year. Biden did make announcements related to the pandemic at the outset of the press conference, announcing his goal of administering 200 million vaccine shots to Americans by the end of his first 100 days in office. “We will, by my 100th day in office, have administered 200 million shots in people’s arms,” Biden said. “I know it’s ambitious – twice our original goal – but no other country in the world has come close, not even close, to what we’re doing.” Biden also announced a new $10 billion investment meant to expand vaccine uptake in minority and rural communities. But no reporters asked him about the pandemic, vaccinations or anything else related to the coronavirus during the more than an hour that Biden fielded questions on immigration, gun control and foreign policy. Biden took questions from 10 reporters on the filibuster, bipartisanship, withdrawing troops from Afghanistan, his plans to run for reelection and China. The surge of migrants at the southern border was the most popular topic. The lack of focus on the pandemic shows how the press’s attention is shifting from the health crisis to other issues, notably immigration and the filibuster. Biden’s chief of staff, Ron Klain, seemed to recognize the lack of questions on the pandemic, retweeting several tweets from journalists and political figures that noted the same. Bid
Enemy within: Experts warn US not learning from past pandemic mistakes -When it comes to combating COVID-19, experts and officials warn the U.S. is its own worst enemy as governors across the country lift restrictions and the public grows increasingly weary of pandemic life. The director of the Centers for Disease Control and Prevention (CDC) warned Monday that the U.S. is at “a fork in the road” on the pandemic, with the two extremes perhaps best illustrated by spring breakers partying in Florida over the weekend while about 1,000 people are dying of COVID-19 every day. Despite an aggressive pace of vaccination, the number of new infections across the country is rising in states across the Northeast and Upper Midwest and has essentially plateaued nationally. Nearly 83 million Americans have gotten at least one vaccine dose to date, including 69 percent of people over the age of 65. Vaccines offer the promise of a return to normality, and the more people get vaccinated, the quicker that can happen. But more infectious variants of the virus, particularly one first found in the United Kingdom, are adding to the threat of a new spike as they become more prevalent. Amid those competing factors, governors across the country are lifting restrictions, including capacity limits and mask mandates. Governors from both parties have pointed to the progress made in increasing vaccinations and decreasing hospitalizations as reasons for lifting restrictions, though some are going further than others. Experts say the U.S. is in a race between vaccines and variants, and by reopening too fast and ignoring public health recommendations, the country may be at risk of losing and bringing on another wave of infections just like the winter. “We have a hard time learning the lessons of even a few months ago, I think,” said Josh Michaud, associate director for global health policy at the Kaiser Family Foundation. Revelers are packing the bars and streets in Miami and other spring break destinations. Miami Beach officials have declared a state of emergency and imposed a curfew due to the crowds, which the city’s Democratic mayor partially blamed on Florida Gov. Ron DeSantis (R) for throwing open the doors for tourists. “The problem is we’re still in the midst of a pandemic. It’s certainly not in our rearview mirror yet by any means and it certainly is not in my county, in my city. So that’s a challenge,” Mayor Dan Gelber (D) said in a CNN interview Monday. Despite CDC guidance against traveling, the Transportation Security Administration said more than 1.5 million people traveled through U.S. airports on Sunday, the first time since the beginning of the coronavirus pandemic that aviation throughput has been this high. CDC Director Rochelle Walensky said she needs people to keep following pandemic restrictions. “Believe me, I get it. We all want to return to our everyday activities and spend time with our family, friends and loved ones, but we must find the fortitude to hang in there for just a little bit longer,”
Trump’s CDC director makes shocking statement about origin of COVID-19 in Wuhan lab – Former director of the U.S. Centers for Disease Control and Prevention (CDC) Robert Redfield, who was at the helm of the government agency at the very beginning of the COVID-19 pandemic in late 2019, spoke on CNN during the network’s upcoming retrospective on how the pandemic unfolded. Talking to Sanjay Gupta, Redfield opined on where he thinks the virus originated from. His best guess? A laboratory. “I am of the point of view that I still think the most likely etiology of this pathogen in Wuhan was from a laboratory,” he said. He noted that it is not unusual for respiratory viruses and pathogens to escape from laboratories during experimentation, likely by infecting a scientist. The prevailing theory surrounding the origins of COVID-19 suggests that it stemmed from a wet foods market, where live animals and their meats are sold, potentially exposing humans to a myriad of viruses transmitted from animals. Redfield’s theory that the virus originated from a lab is bolstered by the fact that Wuhan – the COVID-19 epicenter – is home to the eponymous Wuhan Institute of Virology, which has reportedly experimented with bat coronaviruses in the past. “Normally when a pathogen goes from a zoonose to human, it takes a while for it to figure out how to become more and more efficient in human to human transmission,” he explained. “I just don’t think this makes biological sense.” Just as widely as this theory has been circulated, multiple entities have pushed back against it, including the World Health Organization and Chinese officials. Redfield emphasizes as well that this is simply his opinion as a private citizen and virologist. His colleague, infectious disease expert Anthony Fauci, recently responded to the comments on Friday at the White House. He said that “there are a number of theories,” and that there are still “other alternatives.” Fauci also added that the virus was also likely to have spread weeks or months prior to detection, giving it time to adapt and spread between humans more efficiently.
BankThink Time for Fed to tap brakes on relief programs — As the country looks forward to putting the pandemic behind us, it’s urgent we begin planning for a shift from stabilizing the economy to reining in the record asset and debt bubbles that have been compounded by a decades-long expansion of federal budget deficits. Without action, there could be an economic catastrophe akin to that of 2008, a shock that would almost certainly undo much of the forecasted recovery from the coronavirus pandemic. Knowing firsthand the events of the last financial crisis – as once head of the bygone Washington Mutual Bank and the other, a former leader at the Federal Home Loan Bank of Des Moines – we understand how quickly a collapse can unfold, turning unheeded warnings into missed opportunities for action. It is imperative that the U.S. government and the Federal Reserve learn the lessons from that era and begin taking necessary steps to reduce the risk of a similar scenario as soon as possible. The Fed received much criticism for withholding liquidity from the struggling financial system in the crucial days leading up to the 2008 financial meltdown. Their inaction helped cause a freezing of the capital markets, setting in motion the system’s collapse. To their credit, the Fed finally stabilized the economy by injecting massive liquidity via huge growth of the money supply, ultra-low interest rates, and extraordinary asset-purchase and guarantee programs. The Fed used the appropriate medicines at the time, but those medicines became addictive and their continued use over many years produced severe side effects. Specifically, these Fed policies led consumers, businesses and governments to embrace record levels of debt. Rapid growth in student and auto loans have left individual households stretched. Corporations have borrowed heavily to finance acquisitions, share repurchases and expansions. The federal government debt is predicted to exceed 100% of GDP this year based on a full fiscal year, and that’s not including the full costs that the pandemic necessitated through expansive Fed policies and unprecedented budget deficits. All the while, the availability of cheap money coupled with the Fed’s asset-purchase and guarantee programs has driven up the prices of assets ranging from stocks, housing and commercial real estate, to luxury goods and art. While most prices have reached record levels, the frenzy has left many forgetting that such meteoric rises do not last. All combined, the nation is on the precipice of any number of massive debt or asset bubbles busting, the repercussions of which could easily lead to an economic downturn and potentially another financial crisis.
Fed won’t renew a pandemic concession for banks, suggesting the honeymoon is over – The Federal Reserve will not maintain a change it made in April 2020 that eased banks’ leverage requirements, per The New York Times. As of 2013, large banks (those with more than $250 billion in assets, per Reuters) must hold capital equal to 3% of their total assets to protect against losses. But in 2020, the Fed tweaked the rule to allow banks room to expand their loan books and spur more lending to customers amid the pandemic’s economic fallout. Under the change, Treasuries and cash reserves held at the Fed were excluded from banks’ leverage calculations until March 31, 2021. The regulator has now declined to extend these exemptions, though it did leave the door open to future tweaks around leverage ratio calculations.Retiring the leverage concession could make banks less eager to lend – and be premature given the precarious nature of the US’ fight against the pandemic. With US coronavirus cases declining from their January high, a stimulus package dispensing aid to consumers, and vaccinations climbing, the Fed may feel that now is the time to reinforce pre-pandemic levels of accountability among banks. However, if case counts surge again due to new strains of the virus and states have to lock down again, the Fed may have to walk back its decision to stimulate more relief lending.The Fed’s move may portend the end of a period in which banks enjoyed concessions in exchange for working with the government to mitigate the pandemic’s economic effects. Unlike during the 2008 – 2009 financial crisis – when banks on a long regulatory leash were a big part of the problem – the Fed has looked to financial institutions (FIs) as partners in helping US consumers weather the pandemic.FIs were in position to reap significant goodwill from regulators in exchange for taking actions like disbursing stimulus payments, handling loans through the Paycheck Protection Program, and offering relief to customers like loan forbearance. For example, Wells Fargo got a temporary pause on the asset cap imposed on it by the Fed in 2018. But by allowing the leverage rule change to expire, the Fed appears to be returning to its pre-pandemic regulatory stance, under which it will hold banks to stricter standards.
Fed will lift limits on capital distributions for some banks – but not until 3Q – The Federal Reserve is leaving in place its current restrictions on bank dividend payments and share repurchases for the second quarter of this year, but will lift those caps at the end of June for banks that exceed the minimum required amount of capital, the central bank said Thursday. Between June and December of last year, banks could not repurchase shares and had to limit dividends to what they paid out in the second quarter of 2020 in an effort to conserve capital as financial institutions dealt with the fallout from the coronavirus pandemic. Those restrictions were eased starting in January, following midcycle stress tests, with dividends and buybacks capped at an amount based on 2020 income. For banks that pass this year’s upcoming stress tests – the results of which will be announced by July 1 – the Fed said it will lift the restrictions on shareholder payouts and subject those institutions instead to the stress capital buffer, a unique benchmark of how much capital a bank has to hold in the coming year based on its performance in the stress tests. If a bank does not meet the stress capital buffer target, it faces automatic limits on the amount of money it can pay out to shareholders. “The banking system continues to be a source of strength and returning to our normal framework after this year’s stress test will preserve that strength,” Fed Vice Chair for Supervision Randal Quarles said in a news release. Banks that fail the 2021 stress tests will have to comply with the current restrictions on dividend payments and share repurchases for an additional three months until Sept. 30, according to the release. Meanwhile, the restrictions for banks on a two-year stress testing cycle and not subject to this year’s tests will lift after June 30, and those banks from that point forward will use their stress capital buffer that is calculated based on last year’s test to determine what level of capital distributions they can make.
Will PPP runoff expose revenue weakness at banks –Forgiven Paycheck Protection Program loans are generating short-term revenue for banks, but they have also increased pressure on lenders to find ways to replace those credits and shore up revenue over the long run. The Small Business Administration, as of March 11, had forgiven more than a third of the $521 billion of PPP loans originated last year. The PPP has provided emergency aid to small businesses harmed by the pandemic and led to billions of dollars of originating fees for participating lenders. Bankers should brace for questions during quarterly earnings calls about their growth strategies as the program tapers off. But bankers might be loath to serve up specifics until vaccines are more widely distributed and an end to the pandemic is in sight. “The PPP was huge – but what comes next?” said Sam Pappas, CEO of Mystic Asset Management. “What’s the plan for growth?” While Congress is considering a bill to extend the PPP’s expiration date from March 31 to May 31, it is becoming clear that the program is in its home stretch, industry observers said. “We look at the program as akin to a cowboy having arrived in the nick of time to save the day in an old Western town,” “The job is largely over and the cowboy begins to ride into the sunset.” About 5% of the banking industry’s loan portfolio is “basically going into a runoff mode,” which is creating “a visible headwind for reported loan growth over the next several months,” Siefers added. Many community banks have been reluctant to overpromise, largely because of lingering uncertainty with commercial real estate lending. Many are leery of diving back into anything tied to offices, retail, restaurants or hotels – businesses that proved vulnerable during the pandemic and are still relying heavily on federal stimulus. “We have a lot of businesses that have done really well, but others that are still hurting and struggling,” “There will be pockets of opportunity – and we’ll find them. But for a while, we’ll take a conservative bent.” Bankers are likely to play their cards close to their vests for a couple more months – at least until vaccines prove effective,
Digital fraud focuses on younger consumers — The abrupt shutdown of retail a year ago led to a rise of digital shopping – and fraud. And the most tech-savvy consumers may be the most vulnerable. In the last 12 months, fraud attempts in digital channels against businesses worldwide increased 46%, according to a new TransUnion study. On the consumer side, 36% of users said they were targeted by digital fraud related to COVID-19 in the last three months, versus 29% who said so approximately a year ago, before the virus spread around the world. TransUnion based its findings on a study of billions of global transactions flowing through its fraud-analysis screening tools. Younger consumers – typically considered digital natives – were more likely than retirees to be vulnerable to scams during the pandemic, according to new research from TransUnion. Among U.S.-based Gen Z consumers born between 1995 and 2002, 53% experienced digital fraud attempts, while 40% of U.S. millennials born between 1980 and 1994 were hit by digital fraud, TransUnion said. “Ordinarily younger generations tend to be more tech-savvy and less likely to fall for scams, but when you have a situation like the pandemic where millions of people are on unemployment and expecting checks or stimulus funds, that mindset and need interferes with their judgment,” said Melissa Gaddis, senior director of customer success in TransUnion’s global fraud solutions unit. Fraud declined in only one area – community forums where fraudsters have to work to convince victims to leave the forum and share their payment details. That fact underscores the relative ease of perpetrating simpler types of fraud in the pandemic’s chaos, Gaddis said.
CFPB complaints skyrocket as credit reporting issues again top the list – More than a half million consumers flooded the Consumer Financial Protection Bureau with complaints last year – and while some of the complaints were pandemic-related, the vast majority cited inaccurate information on credit reports. Complaints to the CFPB jumped 54% to 542,300 in 2020, according to an annual report to Congress that the bureau released Wednesday. During the pandemic, the bureau has issued bulletins analyzing thousands of complaints it has received mentioning coronavirus and related terms. “The pandemic has been among the most disruptive long-term events we will see in our lifetimes,” CFPB Acting Director Dave Uejio said in a press release. “Not surprisingly, the shockwaves it sent across the planet were felt deeply in the consumer financial marketplace.” Yet those complaints amounted to 5.9% of the total. Credit and consumer reporting have consistently topped the CFPB’s list of complaints for years and accounted for nearly 60% of all complaints last year, up from 44% in 2019. A significant portion of the complaints in 2020 involved attempts to address identity theft-related issues, according to the CFPB. It said it plans to issue a separate report later this year about the handling of complaints by the three big credit bureaus: Equifax, Experian and TransUnion. The companies did not immediately respond to requests for comment. While the credit bureaus typically provide detailed responses to complaints, the CFPB said they “stopped providing complete and accurate responses” to many complaints. Instead, the bureaus noted that a dispute was filed but “otherwise failed to address the issues consumers raise in their complaints.” The CEO of the Consumer Data Industry Association – a trade group whose members include Equifax, Experian and TransUnion – blamed “predatory” credit-repair companies for inflating the number of complaints against credit bureaus. “They essentially spam the [CFPB’s] complaint portal, making it difficult to help consumers with legitimate problems,” Francis Creighton said in an email to American Banker. The industry with the second-highest complaints was debt collection at 15% of all complaints last year. Last month, Uejio called out financial firms generally for dragging their feet in responding to complaints. He also said the bureau plans to analyze disparities in how companies address complaints from minorities compared with those of white consumers. “The CFPB expects companies to respond to these concerns and that consumers receive responses from companies that address the issues consumers raise in their complaints,” Uejio said in the release Wednesday.
MBA Survey: “Share of Mortgage Loans in Forbearance Decreases to 5.05%” –Note: This is as of March 14th.From the MBA: Share of Mortgage Loans in Forbearance Decreases to 5.05% The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 9 basis points from 5.14% of servicers’ portfolio volume in the prior week to 5.05% as of March 14, 2021. According to MBA’s estimate, 2.5 million homeowners are in forbearance plans….”New forbearance requests decreased to their lowest level since last March. Combined with a steady pace of exits, this drop in new requests resulted in a larger decline in the share of loans in forbearance across all investor categories,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “More than 11 percent of borrowers in forbearance have now exceeded the 12-month mark. We anticipate that servicers will be busy over the next month, with many homeowners opting for the extension for up to 18 months recently made available for federally-backed loans.”Fratantoni added, “The pace of economic activity is picking up as the vaccine rollout continues. We expect that a stronger job market will help many successfully exit forbearance in the months ahead.”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 trended down since then.The MBA notes: “Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.07% to 0.05%, the lowest level since the week ending March 15, 2020.”
Black Knight: Number of Homeowners in COVID-19-Related Forbearance Plans Decreased –This data is as of March 23rd.From Black Knight: Another Week of Improvement in Forbearance Numbers: Active forbearance plans fell again this week, dropping by another 19,000 (-0.7%) from last Tuesday. In total, this puts the number of active plans down by 134,000 over the last month – a 5% reduction. This monthly decline represents the strongest rate of improvement since late November 2020 and is a direct result of servicers working through the 1.2 million plans that entered this month with scheduled March month-end expirations for extension and/or removal.Of particular note when taking a look at this week’s numbers: even with such strong monthly improvement, there are still more than 460,000 active plans with March month-end expirations, which provides the potential for additional improvement in the coming weeks.Early extension activity suggests that mortgage servicers continue to approach forbearance plans in three-month increments, with the bulk of would-be March expirations being extended out through June. Plan extensions have accounted for 75% of all extension/removal activity in recent weeks, but removals are up simply as a result of the volume of expirations that were scheduled for this month.Finally, the McDash Flash Payment Tracker shows that 90.7% of observed borrowers had made their payment through March 22, up from 89.8% at the same time in February suggesting that the recent improvement in outstanding mortgage delinquencies may resume in March after taking a step back last month. We’ll keep watching to see if this upward trend continues, and will post another weekly update on this blog next Friday, April 2.The number of loans in forbearance has slowly declined over the last few months.
Black Knight: National Mortgage Delinquency Rate Increased in February – Note: Loans in forbearance are counted as delinquent in this survey, but those loans are not reported as delinquent to the credit bureaus.From Black Knight: Black Knight’s First Look: Mortgage Delinquencies Rise for the First Time in Nine Months; Increase Largely Calendar-Driven but Bears Watching
After eight consecutive months of improvement, the national mortgage delinquency rate rose in February from 5.85% to 6.0%
The rise was largely calendar-related, as February is both a short month and ended on a Sunday – cutting the days on which payments can be processed – which has historically impacted performance metrics
Delinquency rate increases were seen broadly across portfolios, geographies and asset classes
The increase was primarily seen in early-stage delinquencies, while the number of loans 90 or more days past due but not yet in foreclosure (including those in active forbearance) saw a modest decline
Prepayment activity edged upward in February as well, but recent 30-year interest rate increases are likely to put downward pressure on prepayment rates in the coming months
Both foreclosure starts and active foreclosure inventory again hit new record lows, as recently extended foreclosure moratoriums continue to suppress activity
According to Black Knight’s First Look report, the percent of loans delinquent increased 2.6% in February compared to January, and increased 83% year-over-year. The percent of loans in the foreclosure process decreased 1.1% in February and were down 30% over the last year. Black Knight reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) was 6.00% in February, up from 5.85% in January. The percent of loans in the foreclosure process decreased slightly in February to 0.32%, from 0.32% in January. The number of delinquent properties, but not in foreclosure, is up 1,449,000 properties year-over-year, and the number of properties in the foreclosure process is down 71,000 properties year-over-year.
NAR: Existing-Home Sales Decreased to 6.22 million in February –From the NAR: Existing-Home Sales Descend 6.6% in February — Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 6.6% from January to a seasonally-adjusted annual rate of 6.22 million in February. Sales in total climbed year-over-year, up 9.1% from a year ago (5.70 million in February 2020). Total housing inventory at the end of February amounted to 1.03 million units, equal to January’s inventory and down 29.5% from one year ago (1.46 million). Unsold inventory sits at a 2.0-month supply at the current sales pace, slightly up from January’s 1.9-month supply and down from the 3.1-month amount recorded in February 2020. NAR first began tracking the single-family home supply in 1982. Note: January was revised down from 6.69 million to 6.66 million SAAR. This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993. Sales in February (6.22 million SAAR) were down 6.6% from last month, and were 9.1% above the February 2020 sales rate. The second graph shows nationwide inventory for existing homes. According to the NAR, inventory was unchanged at 1.03 million in February from 1.03 million in January. Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer. The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory. Inventory was down 29.5% year-over-year in February compared to February 2020. Months of supply was increased to 2.0 months in February from 1.9 months in January (tied for all time low).
Comments on February Existing Home Sales – McBride – Earlier: NAR: Existing-Home Sales Decreased to 6.22 million in February. A few key points:
- 1) This was the highest sales rate for February since 2006, and the 2rd highest sales for February on record. Some of the increase over the last eight months was probably related to pent up demand from the shutdowns in March and April. Other reasons include record low mortgage rates, a move away from multi-family rentals, strong second home buying (to escape the high-density cities), a strong stock market and favorable demographics. The delay in the buying season has pushed the seasonally adjusted number to very high levels. For example, assuming the buying season was shifted three months by the pandemic, this number of sales, Not Seasonally Adjusted (NSA) in November, would have given a 4.9 million Seasonally Adjusted Annual Rate (SAAR), as opposed to the reported 6.22 million SAAR for February. So the delay in the 2020 buying season is probably a factor in the headline number being so high. This also means there are going to be some difficult comparisons in the second half of 2021!
- 2) Inventory is very low, and was down 29.5% year-over-year (YoY) in January. Also, as housing economist Tom Lawler has noted, the local MLS data shows even a larger decline in active inventory (the NAR appears to include some pending sales in inventory). Lawler noted: “As I’ve noted before, the inventory measure in most publicly-released local realtor/MLS reports excludes listings with pending contracts, but that is not the case for many of the reports sent to the NAR (referred to as the “NAR Report!”), Since the middle of last Spring inventory measures excluding pending listings have fallen much more sharply than inventory measures including such listings, and this latter inventory measure understates the decline in the effective inventory of homes for sale over the last several months.” It seems likely that active inventory is down close to 50% year-over-year. Months-of-supply is just above the record low set in December 2020 and January 2021. Inventory will be important to watch in 2021, see: Some thoughts on Housing Inventory
- 3) As usual, housing economist Tom Lawler’s forecast was closer to the NAR report than the Consensus. The NAR reported 6.22 million SAAR, Lawler estimated the NAR would report 6.29 million SAAR, and the consensus was 6.50 million SAAR. This graph shows existing home sales by month for 2020 and 2021. The year-over-year comparisons will be easy in the first half of 2021 – especially in April, May and June – and then difficult in the second half of the year. The second graph shows existing home sales for each month, Not Seasonally Adjusted (NSA), since 2005. Sales NSA in February (364,000) were 8.7% above sales last year in February (335,000).This was the highest sales for February (NSA) since 2006.
New Home Sales decrease to 775,000 Annual Rate in February – The Census Bureau reports New Home Sales in February were at a seasonally adjusted annual rate (SAAR) of 775 thousand.The previous three months were revised up. Sales of new single-family houses in February 2021 were at a seasonally adjusted annual rate of 775,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 18.2 percent below the revised January rate of 948,000, but is 8.2 percent above the February 2020 estimate of 716,000.The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.The last nine months saw the highest sales rates since 2006. This was decent year-over-year growth.The second graph shows New Home Months of Supply. The months of supply increased in February to 4.8 months from 3.8 months in January.The all time record high was 12.1 months of supply in January 2009. The all time record low is 3.5 months, most recently in October 2020.This is in the normal range (about 4 to 6 months supply is normal).”The seasonally-adjusted estimate of new houses for sale at the end of February was 312,000. This represents a supply of 4.8 months at the current sales rate. “Starting in 1973 the Census Bureau broke inventory down into three categories: Not Started, Under Construction, and Completed.The third graph shows the three categories of inventory starting in 1973.The inventory of completed homes for sale is low, and the combined total of completed and under construction is a little lower than normal.The last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate).
New home sales fall more than 18 percent in February –Sales of new homes plunged in February as harsh winter weather and supply issues interrupted a scorching hot housing market, according to data released Tuesday by the Commerce Department. The seasonally adjusted number of new homes sold fell 18.2 percent in February, dropping to an annualized rate of 775,000 from a revised 948,000 in January. New home sales fell in every region of the country as damaging winter storms wrecked havoc across the U.S., straining an already tight supply of homes. “There are now more real estate agents than actual homes available for sale in the U.S. Existing home sales are recorded at the contract closing, so the drop is a reflection of the diminishing supply back in December and January,” said Yelena Maleyev, an economist at Grant Thornton, in a Tuesday analysis. “Electricity outages in Texas and bursting pipes across much of the South also likely delayed closings.” A surge of home buyers driven by COVID-19 competing for a meager supply of new and existing houses for sale have driven up prices dramatically since last spring. The median sale price of a home sold in February was $349,400 and the average sale price was $416,000, according to the Commerce Department. Study suggests adults under stay-at-home orders gained nearly two… Putin getting coronavirus vaccine Tuesday The department estimated that just 312,000 new homes were up for sale by the end of February, enough to cover 4.8 months at the current seasonally adjusted rate of sales. While the housing market boom has been a boon for homeowners and those who can afford to upgrade or expand their property holdings, it has also raised concerns about a potential market bubble. The surge in housing prices, which is also driven by shortages of homebuilding materials, has also exacerbated a long-standing affordability crisis, which could fuel even greater income and wealth inequality. “The question is whether more affordable supply will be available for millennials who are entering their prime home-buying years. Mortgage rate movements will start to price out some price-sensitive buyers while soaring materials costs for builders are hindering their ability to meet demand quickly and pass on costs to buyers,” Maleyev said.
A few Comments on February New Home Sales – Mcbride – New home sales for February were reported at 775,000 on a seasonally adjusted annual rate basis (SAAR). Sales for the previous three months were revised up significantly. This was well below consensus expectations for February. The weather was harsh in February – and probably played a role in the decline in sales – but the large year-over-year declines were in the West and Northeast. If the sales decline in February had been mostly weather related, we’d expect large declines in the mid-West and South regions (but sales were up year-over-year in those regions). Still, the last nine months saw the highest sales rates since 2006. Clearly low mortgages rates, low existing home supply, and favorable demographics have boosted sales. A surging stock market has probably helped new home sales too. Earlier: New Home Sales decrease to 775,000 Annual Rate in February. New Home Sales 2018 2019Click on graph for larger image. This graph shows new home sales for 2020 and 2021 by month (Seasonally Adjusted Annual Rate). The year-over-year comparisons are easy in early 2021 – especially in March and April. However, sales will likely be down year-over-year in August through October – since the selling season was delayed in 2020. And on inventory: note that completed inventory (3rd graph) is near record lows, but inventory under construction is closer to normal. New Home Sales, Months by Stage of ConstructionOn inventory, according to the Census Bureau: “A house is considered for sale when a permit to build has been issued in permit-issuing places or work has begun on the footings or foundation in nonpermit areas and a sales contract has not been signed nor a deposit accepted.” Starting in 1973 the Census Bureau broke this down into three categories: Not Started, Under Construction, and Completed. This graph shows the months of supply by stage of construction.. The inventory of completed homes for sale was at 40 thousand in February was just above the record low of 37 thousand in 2013 (when sales were much lower). That is about 0.6 months of completed supply. The inventory of new homes under construction, and not started, is about 4.2 months – close to normal.
New Home Prices –As part of the new home sales report released this morning, the Census Bureau reported the number of homes sold by price and the average and median prices. From the Census Bureau: “The median sales price of new houses sold in February 2021 was $349,400. The average sales price was $416,000.”The following graph shows the median and average new home prices.During the housing bust, the builders had to build smaller and less expensive homes to compete with all the distressed sales. When housing started to recovery – with limited finished lots in recovering areas – builders moved to higher price points to maximize profits. Then the average and median house prices have mostly moved sideways since 2017 due to home builders offering more lower priced homes. Prices picked up again during the pandemic.The average price in February 2021 was $416,000, up 7.7% year-over-year. The median price was $349,400, up 5.3% year-over-year The second graph shows the percent of new homes sold by price. Very few new homes sold were under $150K in February 2021 (“Less than 500 units” in February 2021, rounded down to zero). This is down from 30% in 2002. In general, the under $150K and under $200K brackets are going away. The $400K+ bracket increased significantly after the housing recovery started, but has been holding steady recently. A majority of new homes (about 63%) in the U.S., are in the $200K to $400K range.
AIA: “Architecture billings climb into positive territory after a year of monthly declines” in February — Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment. From the AIA: Architecture billings climb into positive territory after a year of monthly declines: Continuing the positive momentum of a nearly three-point bump in January, the Architecture Billings Index (ABI) reached its first positive mark since February 2020, according to a new report today from The American Institute of Architects (AIA).AIA’s ABI score for February was 53.3 compared to 44.9 in January (any score above 50 indicates an increase in billings). February also marked the first time the design contract score rose back into positive territory since the pandemic began with a score of 51.6 compared to 48.8 in January. The new project inquiries score for February reached a 22-month high water mark with a score of 61.2 compared to 56.8 in January.”Hopefully, this is the start of a more sustained recovery. It is possible that scores will continue to bounce above and below 50 for the next few months, as recoveries often move in fits and starts,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “Beyond the encouraging billing data, architecture employment added 700 new positions in January and has now regained 45 percent of the jobs that were lost since the beginning of the pandemic.”
Regional averages: South (52.4); West (49.5); Midwest (49.3); Northeast (46.9)
Sector index breakdown: mixed practice (52.5); commercial/industrial (50.5); multi-family residential (48.3); institutional (47.8)
This graph shows the Architecture Billings Index since 1996. The index was at 55.3 in February, up from 44.9 in January. Anything above 50 indicates expansion in demand for architects’ services.Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.This index was been below 50 for eleven consecutive months. This represents a significant decrease in design services, and suggests a decline in CRE investment through most of 2021 (This usually leads CRE investment by 9 to 12 months).The weakness over the last year was not surprising since certain segments of CRE are struggling, especially offices and retail.
Hotels: Occupancy Rate Highest in a Year; Down 15% Compared to Same Week in 2019 –Note: Starting this week, the year-over-year comparisons are easy – since occupancy declined sharply at the onset of the pandemic – but occupancy is still down significantly from normal levels.The occupancy rate is down 15.4% compared to the same week in 2019.From CoStar: STR: US Weekly Hotel Occupancy Reaches 85% of 2019 Level: U.S. weekly hotel occupancy jumped almost seven points from the previous week to the highest level in the country since early March 2020, according to STR’s latest data through March 20, 2021.
March 14-20, 2021:
Occupancy: 58.9%
verage daily rate (ADR): US$108.07
Revenue per available room (RevPAR): US$63.62
The 58.9% absolute occupancy was a 93.9% increase from the comparable, pandemic-affected week last year, but more importantly, represented almost 85% of occupancy regained from the 2019 benchmark. There was also more improvement in ADR, which reached 81% of the comparable 2019 level. The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.The red line is for 2021, black is 2020, blue is the median, and dashed light blue is for 2009 (the worst year since the Great Depression for hotels prior to 2020). Even when occupancy increases to 2009 levels, hotels will still be hurting..
Personal Income decreased 7.1% in February, Spending decreased 1.0% — The BEA released the Personal Income and Outlays report for January: Personal income income decreased $1,516.6 billion (7.1 percent) in February according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) decreased $1,532.3 billion (8.0 percent) and personal consumption expenditures (PCE) decreased $149.0 billion (1.0 percent). Real DPI decreased 8.2 percent in February and Real PCE decreased 1.2 percent; goods decreased 3.3 percent and services decreased 0.1 percent. The PCE price index increased 0.2 percent. Excluding food and energy, the PCE price index increased 0.1 percent. The February PCE price index increased 1.6 percent year-over-year and the February PCE price index, excluding food and energy, increased 1.4 percent year-over-year. The following graph shows real Personal Consumption Expenditures (PCE) through February 2021 (2012 dollars). Note that the y-axis doesn’t start at zero to better show the change. The dashed red lines are the quarterly levels for real PCE. Personal income was at expectations, and the decrease in PCE was slightly below expectations. Using the two-month method to estimate Q1 PCE growth, PCE was increasing at a 6.3% annual rate in Q1 2021. (using the mid-month method, PCE was increasing at 3.3%). However, these methods are understating growth in Q1, due to the American Rescue Plan Act of 2021. Both income and spending increased sharply in March, from BofA yesterday: “Total card spending, as measured by BAC aggregated card data, increased 45% 1-yr and 23% 2-yr for the 7-days ending Mar 20. The strong gain owes to the latest stimulus: total card spending for stimulus recipients is running 40% above the Feb avg.”
Real Disposable Income Per Capita in February –With the release of this morning’s report on February Personal Incomes and Outlays, we can now take a closer look at “Real” Disposable Personal Income Per Capita. At two decimal places, the nominal -7.99% month-over-month change in disposable income is cut to -8.20% when we adjust for inflation. This is a decrease from last month’s 11.42% nominal and 11.05% real increases last month. The year-over-year metrics are 4.56% nominal and 2.96% real. Post-recession, the trend was one of steady growth, but generally flattened out in late 2015 with increases in 2012 and 2013. As a result of the CARES Act and the COVID pandemic, a major spike is seen in April 2020 and January 2021. The first chart shows both the nominal per capita disposable income and the real (inflation-adjusted) equivalent since 2000. This indicator was significantly disrupted by the bizarre but predictable oscillation caused by 2012 year-end tax strategies in expectation of tax hikes in 2013 and more recently, by the CARES Act stimulus. The BEA uses the average dollar value in 2012 for inflation adjustment. But the 2012 peg is arbitrary and unintuitive. For a more natural comparison, let’s compare the nominal and real growth in per-capita disposable income since 2000. Nominal disposable income is up 108.6% since then. But the real purchasing power of those dollars is up 43.1%.
Real Personal Income less Transfer Payments — Government transfer payments decreased sharply in February compared to January, but were still $1 trillion (on SAAR basis) above the February 2020 level. Most of the increase in transfer payments – compared to the level prior to the crisis – is from unemployment insurance and “other” (includes direct payments). This table shows the amount of unemployment insurance and “Other” transfer payments since February 2020 (pre-crisis level). The increase in “Other” was mostly due to other parts of the relief acts (including direct payments). There will be another large increase in “Other” in March.A key measure of the health of the economy (Used by NBER in recession dating) is Real Personal Income less Transfer payments.This graph shows real personal income less transfer payments since 1990.This measure of economic activity increased 0.2% in February, compared to January, and was down 2.5% compared to February 2020 (previous peak). Another way to look at this data is as a percent of the previous peak. Real personal income less transfer payments was off 8.1% in April. This was a larger decline than the worst of the great recession. Currently personal income less transfer payments are still off 2.5% (dashed line).
Consumer Spending Explodes, Driven By Vaccine Recipients, Millennials Splurging On Airlines, Restaurants —Now that the awful February retail sales report is in the rearview mirror, as is its huge miss to consensus expectations – just as we warned – due to i) payback from the stimulus-induced gain in January; ii) delayed tax refunds; and ii) the Texas winter blizzard,, the most recent card spending data from both Bank of America and JPMorgan confirms that the latest stimmy checks have not only arrived but have been put to good use, mostly by millennials but also by those elderly vaccinated Americans (whom BofA calls “traditionalists”) who just can’t wait to jump on a plane or cruise ship, and enjoy some time away from house arrest, following a year of unprecedented government-overreach lockdowns. The latest BofA card spending data (as measured by aggregated BAC credit and debit card data) for the week ending March 13 showed a 7.4% 1-year change and 8.9% 2-year change for the 7-days ending March 13th, both numbers confirming a substantial rebound from February’s spending freeze. Looking ahead to next week, BofA economists expect the 1-year growth rate to soar given two things: the first round of lockdowns went into effect one year ago (i.e. the base effect now comes into play) and indeed, as shown below some categories are already showing the effects; ii) card spending next week will also likely be greatly impacted by the distribution of the latest round of stimulus checks. And speaking of the base effect and the March 2020 lockdowns, BofA shows that spending at department stores and on clothing shot up on a 1-year comparison – if not 2 years – which shows that people had already pulled back this time last year. Meanwhile, overall retail spending remains modestly lower compared to the pre-covid average according to JPM data, while on a one-year basis consumer spending is now up almost 24% Y/Y.
March Vehicle Sales Forecast: Bounce Back from Weather Impacted Sales in February –From WardsAuto: U.S. Light Vehicle Sales & Inventory Forecast, March 2021. This graph shows actual sales from the BEA (Blue), and Wards forecast for March (Red).The weather impacted sales in February, and sales are expected to bounce back in March to close to the January level. The Wards forecast of 16.5 million SAAR, would be up about 5% from last month, and up 45% from a year ago (sales collapsed in March 2020).
Music sales spike in 2020 amid coronavirus pandemic – Music sales rose sharply in 2020 as more people turned to streaming services for entertainment during the pandemic, leading to billions of dollars in growth for the music industry, according to a report released Tuesday. The International Federation of the Phonographic Industry (IFPI), a nonprofit organization that represents the recording industry, found in its annual Global Music Report that the global recorded music market grew by 7.4 percent in 2020, the sixth consecutive year it increased. The report noted that the increase was primarily driven by an 18.5 percent increase in revenues from paid subscription streaming services, with a total of 443 million users of music streaming services recorded by the end of 2020. Revenue for both paid and advertising-supported streaming services increased by 19.9 percent to reach $13.4 billion, accounting for roughly 62 percent of total global recorded music revenues, according to IFPI. In terms of 2020’s best-selling artists, K-pop stars BTS came out on top, followed by singer and songwriter Taylor Swift, rapper Drake, singer The Weeknd and pop star Billie Eilish. The rise in streaming revenues helped to significantly offset the losses in revenue from other formats, including physical format and performance rights as lockdown orders prevented people from making in-person purchases, as well as attending concerts and festivals. “As the world contends with the COVID-19 pandemic, we are reminded of the enduring power of music to console, heal and lift our spirits,” IFPI CEO Frances Moore said in a statement along with Tuesday’s report. “Some things are timeless, like the power of a great song or the connection between artists and fans. But some things have changed,” Moore continued. “With so much of the world in lockdown and live music shut down, in nearly every corner of the globe most fans enjoyed music via streaming.” The chief executive went on to say, “As record companies continue to expand their geographical footprint and cultural reach, music has become more globally connected today, than ever before and this growth has spread across all regions around the globe.” “With many impacted by the pandemic, and concerned with growing social injustices, record companies have worked hard to make a meaningful, lasting contribution to the world we want to live in,” Moore added.
Cabin Fever: Americans (of Means) Keen to Travel. How Many Will Play it Safe? – Yves Smith – Europe is in the midst of a Covid surge. The Qantas CEO is talking up vaccination passports, and the EU is planning on one for within the bloc, although the WHO is not on board. New variants are spreading abroad in the US. Yet with infection rates merely down to where they were five months ago, and only about 10% of the population fully vaccinated (and no solid data on whether/how much having been vaccinated reduces spread), American are sick of being cooped up. Many people want back to some semblance of the old normal and don’t want to hear that holding back another month would make a big difference. As the Wall Street Journal reports tonight, web searches and bookings show a keen desire to travel.But there’s travel and there’s travel. Leaving town does not have to entail much in the way of Covid risks. The data indicates that flying is not too bad since planes circulate their air frequently and have high quality filtration; the big risk appears to crowding when getting on and off board, and being unlucky enough to have been seated near someone with Covid who is coughing. Wearing a N/KN95 mask and taking it off only very briefly (as in eat and drink in short intervals) ought to further cut the hazard level. Driving is even better.But then there’s the wee question of what you plan to do when you arrive. I will confess to traveling pretty regularly under Covid for medical treatments, and no, I didn’t engage in side activities. And staying in hotels where service level have been cut to the bone isn’t very glam (no doorman or porter, when even a wheelie bag isn’t easy to manage with my injuries). By contrast, South Beach overrun by partiers and then put on curfew was the lead story of the Daily Mail last night. As of January, Carnival Cruise Lines ihad more bookings for 2022 than it had for 2019. Las Vegas is moving closer to an old-normal footing. From Las Vegas Review-Journal:Room rates shot up over the first weekend of the NCAA Tournament. Hotel rooms at Palazzo, Linq and Planet Hollywood are available seven days a week again. Buffets and dayclubs – two major taboos at the height of the pandemic – are returning, albeit with amended operations. Fans are back at Golden Knights games again. Nearly 40 shows are performing on the Strip.The list goes on.Las Vegas Convention and Visitors Authority President and CEO Steve Hill said the problem many entertainment venues are facing now is that to maintain social distancing, crowds are greatly reduced and many shows, including Cirque du Soleil performances, need a full house to be profitable.“Elimination of social distancing will be key to filling entertainment venues,” Hill said … .Conventions are coming back too. The World of Concrete booked the Las Vegas Convention Center for June 8-10, and three other trade shows were approved in the next 24 hours.
DOT: Vehicle Miles Driven decreased 9.6% year-over-year in January — This will be something to watch as the economy recovers. The Department of Transportation (DOT) reported:Travel on all roads and streets changed by -11.3% (-28.4 billion vehicle miles) for January 2021 as compared with January 2020. Travel for the month is estimated to be 223.3 billion vehicle miles. The seasonally adjusted vehicle miles traveled for January 2021 is 247.1 billion miles, a -9.6% (-26.2 billion vehicle miles) decline from January 2020. It also represents 1.2% increase (2.8 billion vehicle miles) compared with December 2020. Cumulative Travel for 2021 changed by -11.3% (-28.4 billion vehicle miles). The cumulative estimate for the year is 223.3 billion vehicle miles of travel. This graph shows the rolling 12 month total vehicle miles driven to remove the seasonal factors. Miles driven declined during the great recession, and the rolling 12 months stayed below the previous peak for a record 85 months. Miles driven declined sharply in March, and really collapsed in April.
Richmond Fed Manufacturing: Continued Improvement in February – Fifth District manufacturing activity expanded in March, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite index remained rose to 17 in March from 14 in February and indicates expansion.The complete data series behind today’s Richmond Fed manufacturing report, which dates from November 1993, is available here.Here is a snapshot of the complete Richmond Fed Manufacturing Composite series.Here is an excerpt from the latest Richmond Fed manufacturing overview:Fifth District manufacturing activity expanded in March, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite index rose from 14 in February to 17 in March, driven by a sharp increase in the shipments index while the other two components – new orders and employment – held steady. Businesses reported lengthened vendor lead times, as this index rose from 46 in February to 61 in March, breaking a 25-year-record for the third month in a row. Survey respondents were optimistic that conditions would continue to improve in the coming months. Link to ReportHere is a somewhat closer look at the index since the turn of the century.
Kansas City Fed Survey: Solid Manufacturing Growth in March – The latest index came in at 26, up 2 from last month’s 24, which indicates expansion in February. The future outlook increased to 35 this month from 34. Here is a snapshot of the complete Kansas City Fed Manufacturing Survey. Quarterly data for this indicator dates back to 1995, but monthly data is only available from 2001. Here is an excerpt from the latest report: Tenth District manufacturing activity grew solidly compared to a month ago and a year ago with positive expectations for future activity. [Full report here]Here is a snapshot of the complete Kansas City Fed Manufacturing Survey. The next chart is an overlay of the general and future outlook indexes – the outlook six months ahead. Future factory indexes increased to 35. For comparison, here is the latest ISM Manufacturing survey.
One year later, unemployment insurance claims remain sky-high -EPI Blog – One year ago this week, when the first sky-high unemployment insurance (UI) claims data of the pandemic were released, I said “I have been a labor economist for a very long time and have never seen anything like this.” But in the weeks that followed, things got worse before they got better – and we are not out of the woods yet. Last week – the week ending March 20, 2021 – another 926,000 people applied for UI. This included 684,000 people who applied for regular state UI and 242,000 who applied for Pandemic Unemployment Assistance (PUA), the federal program for workers who are not eligible for regular unemployment insurance, like gig workers.Last week was the 53rd straight week total initial claims were greater than the second-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 are still greater than the 14th worst week of the Great Recession.)Figure A shows continuing claims in all programs over time (the latest data for this are for March 6). Continuing claims are currently nearly 17 million above where they were a year ago, just before the virus hit. The good news in all of this is Congress’s passage of the sweeping $1.9 trillion relief and recovery package. It is both providing crucial support to millions of working families and setting the stage for a robust recovery. One big concern, however, is that the bill’s UI provisions are set to expire the first week in September, when, even in the best – case scenario, they will still be needed. By then, Congress needs to have put in place long-run UI reforms that include automatic triggers based on economic conditions.
BLS: February Unemployment rates down in 23 States – From the BLS: Regional and State Employment and Unemployment Summary: Unemployment rates were lower in February in 23 states and the District of Columbia, higher in 4 states, and stable in 23 states, the U.S. Bureau of Labor Statistics reported today. Forty-five states and the District had jobless rate increases from a year earlier and five states had little or no change. The national unemployment rate, 6.2 percent, was little changed over the month, but was 2.7 percentage points higher than in February 2020. Nonfarm payroll employment increased in 11 states, decreased in 3 states, and was essentially unchanged in 36 states and the District of Columbia in February 2021. Over the year, nonfarm payroll employment decreased in 48 states and the District and was essentially unchanged in 2 states. Hawaii and New York had the highest unemployment rates in February, 9.2 percent and 8.9 percent, respectively, while South Dakota, 2.9 percent, and Utah, 3.0 percent, had the lowest rates. Hawaii is being impacted by the lack of tourism.
The police crackdown in Miami Beach: Who is responsible for the spread of the COVID-19 pandemic? -Riot police cracked down on spring break partiers in Miami Beach, Florida on Saturday, just hours after the mayor declared a state of emergency and implemented an 8 p.m. curfew. SWAT teams blocked the streets and deployed a deafening sound cannon while officers fired pepper balls into a crowd that had gathered along the city’s famed South Beach. More than two dozen people were arrested, and police report more than 1,000 arrests since the beginning of the spring break season. On Sunday, Miami Beach officials extended the curfew for up to three weeks, closing off access to the main tourist thoroughfare for four nights a week. Gatherings such as those of young people in Florida are not safe and should be discouraged. The pandemic remains a dire threat, and new variants are spreading rapidly throughout the country. Florida already leads the country in the number of confirmed cases of the B.1.1.7 variant, which is more contagious and deadlier than earlier variants. However, the response of the state is hypocritical to the extreme. First of all, the militarized crackdown on largely working-class and African American youth was not driven by public health concerns. Rather, police were deployed in response to complaints from wealthy residents that the crowds were blocking their access to the bars and beach front. Thousands of college students and others have been welcomed to gather in Miami Beach and throughout the region as part of annual spring break festivities. Miami tourism boosters used a $5 million grant from local government to run its largest ad campaign in two decades. Airlines have been offering cheap fares to Miami for as low as $50. Hundreds of thousands of tourists have traveled to the state in recent weeks to gather in large crowds, from the 300,000 who attended Bike Week earlier this month up the coast in Daytona Beach to this week’s revelry in Miami Beach. Florida has no statewide mask mandate or social distancing restrictions on businesses, with Republican Governor Ron DeSantis pursuing a “business-friendly” pandemic policy that has resulted in more than two million COVID-19 infections and over 32,000 deaths in just one year.
Piedmont Natural Gas seeks rate increase in North Carolina – Charlotte Business Journal – Piedmont Natural Gas Co. Inc. is asking regulators in North Carolina to approve a 10.4% overall rate hike that would go into effect in November. The increase would raise $109 million in new annual revenue for the company. Under the proposal filed today with the N.C. Utilities Commission, residential rates and small commercial company rates would increase 11.9 %. A typical residential customer’s average monthly bill would go up almost $8, to about $76 from a current monthly average of $68. Customers tend to have their largest bills from October to March, as heating costs rise. Large industrial customers who get firm service will see their rates go up 17%. Industrial customers with interruptible service – those who agree to allow their service to be curtailed during emergencies and unusual peaks – will see rates go up 5%. The increase would cover about $1.7 billion in capital investments.
Study of utility shutoffs during COVID-19 finds disproportionate impact in southeastern states – More than 750,000 households had their power disconnected during COVID-19 across ten states for which data is publicly available, with the greatest impacts centered in southeastern states including Georgia, Florida and the Carolinas, according to an analysis from the Center for Biological Diversity.. Georgia Power disconnected 131,000 residential customers between July 2020 and January 2021, but shutoffs have since reached pre-pandemic levels, which averaged 19,000 residential customers per month, according to a company spokesperson. In addition to highlighting the disparities created by states’ varied approaches to shutoff moratoriums during the pandemic, Mark Wolfe, executive director of the National Energy Assistance Directors’ Association, said the Center’s report illustrates existing economic disparities and the need for improved reporting of shutoff data. An effort by the Center for Biological Diversity to quantify the number of Americans who had their power shut off during COVID-19 may not be comprehensive, but it does illustrate the two Americas that emerged during the pandemic, according to Wolfe. The report, released earlier this week, focuses on just ten states due to the lack of publicly available data, according to Greer Ryan, the author of the report and an energy policy analyst at the Center for Biological Diversity. Ten other states had no shutoffs due to emergency moratoriums, leaving about 30 states for which Ryan said she was unable to obtain data. Even so, Wolfe said, the report paints a stark picture of the discrepancies that unfolded across the U.S. in 2020 as a result of differences in policy and prosperity. While some states, including Georgia and Florida, reported hundreds of thousands of disconnects during the pandemic, in others only a few thousand residents were reportedly cut off. “What the paper is really saying, is we have two different countries here,” Wolfe said. “One part of the country with strong protections, and one weak. There’s no concern in New York or California. The concern is in Georgia.”
COVID-19 homelessness is a public health problem – it’s about to get worse –As we mark the one year anniversary of the World Health Organization’s (WHO) declaration of the pandemic, we can see signs of long awaited progress. President Biden has accelerated the vaccine delivery timetable, now promising every adult who wants one will be eligible by May 1. Nearly 25 percent of the nation’s adult population has already received at least one dose. Many states are seeing decreasing numbers of new cases and deaths. There’s still work to do, but there’s undeniable excitement that we’re headed in the right direction. For America’s homeless, however, there will be little celebration when we reach herd immunity. Before the pandemic struck, the number of unsheltered people in the U.S. was on the rise for three straight years. California alone recorded a 16 percent increase in 2019. At the time, then-Secretary of the U.S. Department of Housing and Urban Development (HUD) Ben Carson said the problem in California demanded “crisis-like urgency” from state and local leaders. Federal leadership was sadly lacking and we have yet to start a national conversation about how to make housing affordable for all. It’s no surprise COVID-19 has had a disproportionate impact on America’s homeless. Nearly twice the number of homeless suffer from underlying health conditions in the areas of hypertension and diabetes, among others, heightening exposure risk to the virus’s most serious effects. Washington alone reported a 54 percent increase in the number of homeless who died in 2020 compared to the previous year. As of last October, the death rate for the sheltered homeless in New York was 75 percent higher than that of New York City. COVID-19 precautions – hand washing, social distancing and wearing clean masks – pose significant challenges for the unsheltered, especially for those who suffer from untreated mental illness. Safety isn’t always the priority when daily survival is the primary objective. Being homeless also complicates nutritional health, regular access to bathrooms and medical care and the ability to store, cook and consume food in a safe manner. President Biden showed great leadership in ordering the Federal Emergency Management Agency (FEMA) to reimburse states and cities that paid hotels to house the homeless during the pandemic, such as those in L.A. County. It was an important stopgap measure but it didn’t go far enough to address the underlying problem. Now, a federal order by the Centers for Disease Control and Prevention (CDC) prohibiting landlords from evicting tenants with delinquent payments to prevent further spread of COVID-19 is set to expire at the end of this month. With nearly one in five adult renters behind in their payments, millions of Americans could soon be displaced with nowhere to go. Extending the CDC moratorium is needed to prevent this problem from becoming far worse. But it will take bold action by Congress, Biden and a national plan to reverse the rising trend of homelessness in America. Children and families deserve stable and safe housing, and it is past time we as a nation examine the root causes of homelessness to reduce the number of Americans who live in extreme poverty.
Homelessness in the US exploded before the pandemic–A new “point-in-time” report from the Department of Housing and Urban Development (HUD) shows that homelessness increased significantly during the Trump administration. The report includes a detailed snapshot of the state of homelessness in the US in January of 2020 – just before the COVID-19 pandemic set in – and compares it to figures from previous years. It stands as an indictment of the Trump administration and begs the question of exactly how many more people have become homeless over the last year as millions lost their jobs and fell behind on their rent or mortgages. The report found that essentially all major metrics of homelessness are on the rise. At the beginning of 2020, there were over 580,000 homeless people in the US, or just under one in 500. Last year was the fourth consecutive year of growth in the homeless population in the country. While the homeless population under the Trump administration increased by some 30,000 people, or about five percent, the number of unsheltered homeless – those who lacked any sort of nighttime shelter at all, for example, a car – increased by 28 percent. Moreover, the number of chronically homeless people, those who have been homeless for over a year or who are consistently in and out of homelessness, increased by a massive 40 percent, reaching levels last seen only in the fallout of the 2008 financial crisis. The growth in homelessness was distributed across both “red” and “blue” states, those traditionally controlled by the Republicans and Democrats respectively, though Democratic stronghold states tend to have much higher homelessness rates. California has the largest single state homeless count at 130,000, and percentage-wise is only behind Washington D.C., New York and Hawaii. In President Joe Biden’s home state of Delaware, an infamous tax haven, homelessness increased by 26 percent between 2019 and 2020. But the report only describes the prevailing conditions that existed before the pandemic. The HUD will not release a similar report for January 2021 until early 2022. But until then, a study of some key events of 2020 allows for an informed guess as to how these figures have risen still further over the course of the pandemic. While the pandemic changed everyday life in many ways, it did not change either the basic policies of the ruling class or its attitude towards the working class.
Chicago school attendance figures show less than a quarter of students actually going to schools in person – After weeks of stonewalling, Chicago Public Schools (CPS) released attendance figures indicating just 24 percent of students were actually participating in in-person learning. In light of the continued resistance of parents and the wider community to reopening schools during the pandemic, the administration of Mayor Lori Lightfoot and CPS district officials are doing everything they can bring more students back into classrooms, including revoking teacher accommodations allowing them to teach remotely. Though CPS administration claimed to be “encouraged” by the figures, there is a high degree of sensitivity surrounding the release of this information, indicated by its release late on Friday afternoon. Such a practice is almost exclusively reserved for information which the releasing party hopes will get buried in the news cycle. Moreover, the figures themselves demonstrate widespread opposition the policies of Lightfoot, the Democratic Party and the school district among working class families. According to the data, 49,281 students have attended in-person learning in school buildings at least once between February 11 and March 12. That number represents 24 percent of the 205,383 students that have been eligible to attend since the district reopened schools for elementary and special education students. CPS officials claim 73 percent of students who opted in to in-person learning show up to schools each day on average. The release of these partial attendance figures show that interest has continued to fall for in-person learning since CPS asked parents to opt-in in December. Back then, the number of CPS students whose families said they wanted them in schools was 77,000. This fell to 60,278, by late February – just 29 percent of students in eligible grades. There is reason to believe the district’s attempts to return a large mass of high school students and educators to schools by April 19, the beginning of the fourth quarter academic term, has met with some difficulty. Just hours before the March 19 deadline for parents to opt-in to in-person learning for their students, the district announced it would be extending the deadline through Tuesday, March 23.
7 in 10 parents concerned children will face setbacks in schools due to pandemic – A new poll found that about 7 in 10 parents are concerned that their children will face setbacks in school, academically and socially, due to the coronavirus pandemic that caused many schools to switch to online learning for months. The University of Chicago Harris School of Public Policy and The Associated Press-NORC Center for Public Affairs Research poll showed that 69 percent of parents are somewhat concerned about their child falling behind academically. Similarly, 70 percent of parents are at least somewhat concerned their child will fall behind socially due to the loss of sports and other activities, the poll found. Many schools have not been fully in person, five days a week for a year. Sports seasons have been canceled or limited because of the pandemic. One study showed middle and elementary school students are falling behind in math, while another study showed that students who have been in person for class were less stressed than those still in online learning. However, concerns with their children falling behind in school are coupled with a concern that schools reopening could cause coronavirus cases to rise. The poll showed that 64 percent of parents are at least somewhat concerned that schools reopening could cause a spike in coronavirus cases. The Centers for Disease Control and Prevention has changed the recommendation for social distancing from 6 feet to 3 feet in schools. This will allow for class sizes to increase, as desks had to be taken out of classrooms to accommodate for 6 feet of social distancing.
Michigan schools reopened. Then came a spike in COVID outbreaks – Coronavirus outbreaks are skyrocketing in Michigan schools, with some districts retreating to fully online learning just weeks after Gov. Gretchen Whitmer’s March 1 deadline urging all schools to reopen classrooms. Data released Monday by the Michigan Department of Health and Human Services revealed a 30-percent increase in one week in cases connected to new or ongoing coronavirus outbreaks tied to middle and high schools, rising to 1,412 staff and students from 1,085. New and ongoing elementary school outbreak cases rose 23 percent in the past week, to 169 cases from 137. The outbreaks may be tied to highly contagious coronavirus variants. There are now more outbreaks than on Nov. 15, when Whitmer ordered middle and high schools to go fully remote for three weeks. When she made that announcement, there were 777 staff and students who had tested positive in new or ongoing school outbreaks, half the number as now. While more schools may lurch back to homebound learning as outbreaks spread, state officials indicated Tuesday that there are no current plans for another statewide pause in in-person learning. State officials are “very concerned” but “want schools to be able to remain open for in-person learning and for students to be involved in extracurricular activities, including sports,” said Lynn Sutfin, a state health spokesperson. The increase at schools mirrors an overall surge in the state, where weekly cases have more than tripled to more than 19,000 from just over 6,000 in mid-February. And after weeks in which less than 4 percent of COVID cases were positive, 12 percent were so on Tuesday, a clear sign of community spread of a disease that has killed nearly 16,000 people in Michigan. “The community spread is being mirrored by the schools,” said Erik Edoff, superintendent of L’Anse Creuse Public Schools in Macomb County, which now has an outbreak involving three students at a middle school. “There’s definitely been an uptick in recent weeks.”
Data shows schools are fueling third surge of COVID-19 in Michigan –A third surge of the COVID-19 pandemic has begun in Michigan, fueled by huge numbers of outbreaks at K-12 schools and school-related sporting events. Daily new cases in the state have nearly tripled since their low one month ago, climbing from 1,045 per day on February 20 to 2,998 per day on March 20. During this period, the number one source of new COVID-19 outbreaks in the state was K-12 schools. According to Covid Act Now, Michigan’s overall rate of infection is 1.23, meaning that on average a person who catches COVID-19 in Michigan will infect 1.23 other people, the highest such rate of any state in the US. In St. Clair County – where cases doubled in one week after its schools switched from hybrid to fully in-person learning on March 1 – the rate is 1.47. At a press conference on March 19, the state’s Chief Medical Executive Dr. Joneigh Kaldhun revealed the extraordinary fact that “in January and February, local health departments identified 315 outbreaks associated with different sports teams” related to schools or recreational clubs. “We are going in the wrong direction,” she said, explaining that the highest increase in cases statewide has been observed in children aged 10 to 19 years old. Michigan is also the state with by far the highest per capita rate of the more infectious and lethal B.1.1.7 variant of the virus, whose transmission has been especially associated with school sports. The variant has now been detected 756 times across 31 of the state’s counties. Not only new variants but horrifying medical afflictions associated with COVID-19 have appeared in the petri dish of Michigan’s schools. Ninety-five Michigan children have now developed MIS-C (Multisystem Inflammatory Syndrome in Children), a condition seen only in children who catch COVID-19 in which a child’s brain, heart, kidneys and other organs swell and malfunction. Last month, 10-year-old Dae’Shun Jamison of Shelby beat MIS-C but tragically lost both arms and both legs. Fourteen-year-old Honestie Hodges of Grand Rapids did not survive. Any rational person would conclude from these facts that face-to-face learning and school sports must be stopped immediately, in order to contain the spread of COVID-19 and save countless lives. Instead, officials at the local, state and federal levels are fighting to open schools where they remain closed and to reduce to insignificance any remaining safety policies.
Texas implements new CDC guidelines in public schools – Potentially millions of additional schoolchildren in Texas will be packed into classrooms in the few remaining weeks of the school year, with state officials announcing Thursday their total support for the politically-motivated Centers for Disease Control and Prevention (CDC) policy that social distancing between students be reduced from six to three feet in K-12 schools. The city of Austin is pressing ahead with the change, despite COVID-19 test positivity rates ranging from a low of 3.3 percent among preschoolers to as high as 7 percent among middle school students. While rates of infection in schools have fallen recently, the decline generally tracks with closures caused by the recent Texas power crisis. Coronavirus testing rates are also down. The region of Waco, for example, has recently seen the number of daily tests for coronavirus fall by 85 percent over previous peaks. The Texas government’s move, combined with the statewide lifting of the mask mandate earlier this month, jeopardizes the lives and health of millions of educators and schoolchildren. So far, there have been 127,196 confirmed cases of COVID-19 among students and 67,740 among staff statewide. The endless refrain that these numbers are of little significance because kids get “mild cases” of the illness is cold comfort for the dozens upon dozens of families whose children have died. This logic expresses the callous indifference toward the long-term health consequences of COVID-19 for children, which are poorly understood but initial research indicates can be severe. As for educators, the hundreds among the nearly 48,000 Texans dead from COVID-19 are simply bodies to be stepped over for the politicians and so-called health experts pushing these policies. The three-feet guideline itself is just a recommendation that can be violated, with the state explaining Thursday that schools should ” encourage students to practice social distancing” when it’s possible to do so without ” disrupting the education experience” (emphasis added). The fact that the state’s Republican governor Greg Abbott is implementing the recommendations of the CDC – which was pressured by the Biden administration to distort science in order to meet his political goal of reopening all K-8 schools – underscores the fact that educators and families are confronting a combined assault of both parties of big business. In an effort to appear as an advocate for educators and schoolchildren, state representative Democrat Shawn Thierry of Houston recently introduced a bill into the state legislature that would require a single school nurse for every 750 students in Texas schools. In reality, Thierry’s effort reveals the grotesque character of public education in the state and the total unwillingness of anyone in the political establishment to do anything about it. Despite the propaganda campaign by the Texas political establishment and the Biden administration, backed by the CDC, teachers unions and other officials, there is still enormous opposition to the reopening policies.
More students sent back to Las Vegas schools, as health expert claims Nevada is reaching “herd immunity” – On March 22, thousands of sixth, ninth, and twelfth graders returned to in-person learning at Clark County District Schools (CCSD), which includes children from Las Vegas, Nevada and surrounding communities. This follows the return of pre-K to third graders to school buildings on March 1. The remaining grades will return in a hybrid model on April 6, with all elementary students scheduled to return to campuses five days a week. While an estimated 26,764 students were expected to return Monday, the parents of 44,912 students chose to keep them in remote learning, despite the barrage of propaganda from the media and political and union officials that in-person learning is not only safe, but essential to the mental well-being of students. As one teacher noted on social media, “41 students got off buses today at my high school. …We had less than a 100 on campus, but we were supposed to have 400.” As for the pre-K to third grade students who were sent back on March 1, 36,440 are in Cohort A and attend in-person classes on Mondays and Tuesdays, and 32,685 are in Cohort B, which meets on campuses on Thursdays and Fridays. According to the district, 93,644 pre-K through third grade students remain in remote learning. Students and teachers returned to schools in accordance with a Memorandum of Agreement reached between CCSD and the Clark County Education Association (CCEA) on December 14, 2020. The deal was approved by the CCSD trustees on January 14, 2021. The CCEA not only did not put up any struggle but left the wording of the document so ambiguous that social distancing measures were allowed to be reduced weeks before the CDC reduced its guidelines from six to three feet to pack more children into classrooms. In total disregard for the safety of educators, students and the community at large, the CCEA has backed the drive to reopen schools. When the district first threw open its doors, union officials declared on Facebook, “We want to wish all pre-k through 3rd grade educators a great first day back with students in the building today! We want to hear how your day goes! Let us know what your favorite thing that happens today is and what you’re looking forward to most the rest of the week. Share your photos and share your stories!” This post was followed by a smiley face. The reopening of schools has been accompanied by a months-long media blitz feigning concern over the academic and emotional well-being of students. This comes after decades of annual budget cuts to programs, which are designed to address the mental health and other needs of children.
Facebook threatens teachers’ groups opposing unsafe school reopenings – On Monday and Tuesday, Facebook threatened two groups – Illinois Refuse to Return and Educators Rank and File Safety Committee – with being shut down for sharing information that is opposed to the unsafe reopening of schools amidst the ongoing coronavirus pandemic. The Facebook threat was sent to administrators of the two groups in the form of a “Group Quality” communication. The message contained “Warnings” about a post by a group member that had been removed because it “goes against our Community Standards on misinformation that could cause physical harm.” The warning also stated that the approval of the member’s post by administrators was considered an “Admin violation” and, if further instances occur of such violations, “we may disable your group.” The group member who posted the comment in the two groups was World Socialist Web Site writer Benjamin Mateus. Mateus was also notified that this post was considered a violation of Facebook’s Community Standards and that it had been removed. Benjamin Mateus is the pseudonym used by a practicing physician in the US with extensive clinical experience. Mateus shared his post on Illinois Refuse to Return on Monday and Educators Rank and File Safety Committee on Tuesday. The post exposed the use by the US Congress and the Centers for Disease Control and Prevention (CDC) of a study coauthored by Brown University economist Emily Oster that justified the loosening of guidelines and claimed that children are not at high risk for COVID-19. The full text of the post is as follows: “A person like Emily Oster who has been advocating right wing fashion for schools to open and repeatedly getting it wrong who has no training in public health and infectious diseases should be a red flag for the CDC to use her study. This is no better than the hydroxychloroquine hype promoted by the flawed French researcher to treat COVID-19. Yet, the CDC and congress put on a deadly show for all Americans and teachers. ‘We will manipulate statistics and promote bad data and sell it as sound science to get you back in the classrooms!'”
New York City charter school threatens to fire educators who refuse to teach in-person – Public Prep, a charter school network in New York City that teaches pre-K, primary and middle school students, has threatened to fire teachers who do not teach in-person classes for two weeks a month. According to teachers, administrators told them in virtual meetings that anyone who refused to return would be terminated. To ensure that teachers come into buildings, administrators have arbitrarily declared “blackout days” during which educators will not be paid for taking sick days or time off for family responsibilities. In some cases, blackout days have been applied retroactively. The demand comes as more infectious variants of the coronavirus now comprise over half of all new infections recently tested in the city. On Sunday, one person was diagnosed with the deadly P.1 variant first discovered in Brazil. Nevertheless, yesterday, public high schools resumed face-to-face instruction for the first time in a year, as part of the Biden administration’s campaign to rapidly reopen schools in order to compel parents to return to unsafe workplaces. While New York City’s test positivity rate remains at roughly 7 percent, 25 zip codes have positivity rates of 10 percent or more. Public Prep, which has generally followed the public school opening and closing policies during the pandemic, opened up its schools for full-time face-to-face instruction on March 1. The charter’s reopening plan is a hybrid model for teachers, but seeks to maintain fully in-person classes for students. To do so, the network has hired part-time staff, who make an hourly wage of $20 an hour, have no work protections or health care benefits and are required to come to school five days a week. Many of the full-time staff at the schools are new teachers, graduate students, or teachers who are not certified in New York but are in other states. They are under tremendous pressure to ensure student achievement and are told that if they do not perform their jobs to an amorphous “standard” they may be terminated.
110 school bus drivers have died from COVID-19 — At least 110 school bus drivers have died from COVID-19 in the past year in the US according to the tracker School Personnel Lost to Covid. In total, 1,145 school personnel have died from COVID-19 since the start of the pandemic. School bus drivers are particularly at risk of infection. School buses have been specifically noted as potential areas of high spread, with students and drivers in a largely closed air system lacking proper ventilation. Air conditioning and heating systems can act as conveyors for the virus, while the lowering windows in freezing or raining weather threatens the health of students and drivers through more conventional illnesses. From late December to early January, two Southern Regional School District bus drivers in New Jersey died from COVID-19 just weeks after the district switched to remote instruction following a rise in cases on campus and in the community. The district did not release the names of the bus drivers. In Miami-Dade, Florida school bus driver Donna Blatch died from COVID-19 in February after voicing concern that she was not being informed about which of her students had been sent home to quarantine. She was one of three district employees who died from the virus in a two-week period, passing just four days after testing positive for infection. In an interview with the news station Local 10, a co-worker of Blatch commented that “The kids are not keeping their mask on their faces, kids are not socially distancing on the bus [and] we are in a closed confined space. They [the district] should treat us with some dignity.” She continued by saying “I lost my best friend to this COVID. How many more Donna Blatch’s is it going to be before it happens to one of us? We’re scared; we have underlying conditions, we have families with underlying conditions that we may take this COVID home to our families, and they need to take into consideration when they talk about opening these schools, they need to take our lives in consideration. The teachers can work and do that from home, we can’t do that. So, we are asking for our community, pastors, the governor, and the mayor to help us. Make it safer for these kids and us on these Dade County school buses. We have not got any recognition for what we are doing as bus drivers and we are afraid of losing our lives.” There are no national statistics on school bus driver infections, but the conditions facing school workers in general provide insight into the potential hazards they face. According to the National COVID-19 School Response Dashboard, among data collected for 1.5 million school employees between August 31 and February 28, roughly 78,000 school workers have been infected. That is more than five percent of the surveyed school staff infected, and a death rate upwards of 1.5 percent of those infected. These deaths and many more come at a time when, after cases have been declining nationally for weeks, school districts are starting to see an increase in cases. These issues have exacerbated the existing general shortage of school bus drivers around the country, making it difficult for districts to fill all positions needed to cover routes. .
University of Cincinnati does not renew contract of professor who called COVID-19 ‘the Chinese virus’ –The University of Cincinnati has made the decision not to renew the contract of a professor who reportedly used the term “Chinese virus” when discussing COVID-19. University spokesperson M.B. Reilly told The Cincinnati Enquirer following an investigation into College of Engineering and Applied Science adjunct instructor John Ucker. The university launched the probe in September after a student shared a screenshot of Ucker’s email, which went viral and racked up nearly 200,000 interactions on Twitter. Evan Sotzing, a third-year engineering student, had emailed Ucker to tell the professor that he would not be able to attend an in-person lab because his girlfriend had tested positive for the coronavirus. While he had tested negative, Sotzing was instructed to quarantine for two weeks. “For students testing positive for the chinese (sic) virus, I will give no grade,” Ucker responded. Shortly after, UC’s Dean of Engineering and Applied Science, John Weidner, said he was “looking into it” and referred the matter for review to the university’s Office of Equal Opportunity and Access. “These types of xenophobic comments and stigmatizations around location or ethnicity are more than troubling. We can better protect and care for all when we speak about COVID-19 with both accuracy and empathy – something we should all strive for,” Weidner wrote in a statement.
Tests used in UK schools “not fit for purpose” – Mass testing of staff and students has been central to the UK government’s justification for the reopening of all schools in England. All secondary school pupils and primary and secondary school staff are being advised to self-administer lateral flow tests twice a week. The differences between lateral flow tests and the coronavirus polymerase chain reaction (PCR) tests used since the start of the pandemic are significant. PCR tests are looking for the presence of the genetic material of the virus. The lateral flow kit contains antibodies that stick to any spike proteins of the virus in the test sample. A positive result is produced if a sufficient quantity of antibodies attach to the sample. The PCR test requires the sample to be sent to a laboratory, because the sample has to be copied a large number of times, before it can be analysed, and the presence of the coronavirus detected. The lateral flow tests can deliver a result in 30 minutes because there is no need to copy the sample in a laboratory. This comes at the cost of significantly reduced accuracy. In February, the British Medical Journal reported on a pilot study in Liverpool of the lateral flow test produced by Innova. The study found that 60 percent of infected asymptomatic people went undetected, as did 33 percent of those with high viral loads. During a time of high rates of infection in the city and when secondary age children were showing the highest rates of infection nationwide, teachers reported whole schools being tested and every test result coming back negative. There have been numerous reports since of workers such as teachers getting a negative lateral flow result followed by a positive PCR within the same 24-hour period. The tests were also used at universities around the UK in December to ensure that students were not COVID-positive before they returned home to their families. Data from the University of Birmingham showed a sensitivity of 3 percent, meaning the tests pick up just three in 100 of people with COVID-19. Meanwhile, universities in Scotland found that 58 percent of all positives were false positives . Professor Jon Deeks, a biostatistician at the University of Birmingham who leads the Cochrane Collaboration’s COVID-19 test evaluation activities, said of tests in response to the data: “They’re not fit for purpose. I’d rather they hang these tests on a Christmas tree in Trafalgar Square, that would be better.” According to the government’s own report, produced by Public Health England, the Innova test has a false negative rate of 21 percent when used by laboratory scientists, 27 percent when used by trained healthcare staff and 42 percent when used by members of the public. The World Health Organisation (WHO) recommends that rapid diagnostic tests should miss no more than 30 percent of positive cases.
COVID-19 may leave 12M children unable to read, report warns – A new analysis says more than half of the world’s 10-year-olds could be unable to read and understand a sentence by the end of 2021, a figure that’s been exacerbated by the coronavirus pandemic. The report released Monday from anti-poverty nonprofit One Campaign warned that 70 million 10-year-olds in 2021 alone could lack the basic literacy skills expected of a child of that age. Of that 70 million, nearly 12 million could be unable to read as a direct result of the COVID-19 pandemic’s effect on education. The analysis is based on official “learning poverty” figures from the World Bank and UNESCO, and population data from the United Nations. The pandemic caused schools across the world to close for extended periods of time over the past year as governments imposed lockdown measures to stop the spread of the deadly virus. While schools in wealthier countries transitioned to online learning and hybrid models, children in some of the poorest countries have fallen behind in their education due to a lack of access to technology and infrastructure for remote education. The learning crisis is particularly dire in Africa and Asia, with sub-Saharan Africa making up almost 40 percent of children at risk. Girls are also more seriously affected as the report estimates up to 20 million may never return to the classroom. “This has real world implications. When children can’t read by the age of 10, this has a knock-on effect on their whole education, impacting on their ability to learn, earn, start businesses,” David McNair, executive director for global police at The One Campaign said. “Governments must urgently step up and invest in the future of children around the world and ensure that budgets are spent efficiently and in a targeted manner. This virus has taken enough from us already, it must not take the futures of millions of children as well,” McNair added. The number of children lacking basic literacy by the age of 10 could rise to 750 million by 2030 if current trends continue, the analysis warns. The nonprofit urged governments to commit $5 billion for the Global Partnership for Education, which could enable 175 million children to learn over the next five years, as well as endorse two global targets on girls’ education set by the United Kingdom.
Pakistan Tech Exports Soar 69% in February 2021 – (table, graphic) Pakistan’s technology exports shot up by 69% in February 2021 from the same month last year. Tech exports soared 41% for the first 8 months (July 2020-February 2021) of the current fiscal year from the same period period last year, according data released by the State Bank of Pakistan. Technology services exports from Pakistan continued their momentum into February 2020, rocketing up 69% to $179 million, up from $106 million in February 2020. ICT exports for the first 8 months of the ongoing fiscal year 2020-2021 rose 41% to $1.3 billion, on track to reach or surpass the $2 billion mark this year. In addition to jump in tech services exports, Pakistan is also seeing double-digit growth in exports of engineering goods, up 19.74% for the first 8 months of the current fiscal year. Export of electric fans posted over 15% growth and other electrical machinery 17.16%. There is real hope for Pakistan to dramatically increase its higher value-added exports if the current trends in tech services and engineering goods can be sustained. Seizing the opportunity to attract export-oriented investors will help Pakistan become the next Asian Asian Tiger economy. It will help the country avoid recurring balance-of-payments crises that have forced the nation to seek IMF bailouts with all their tough conditions. Focusing on “Plug and Play” Special Economic Zones (SEZs) is going to be essential to achieve this objective.
Garment Workers Win $22 Billion in Historic Victory Against Wage Theft – For years, Amanda Lee McCarty had been working in the fashion industry as a buyer and product developer. But as COVID-19 cases surged and lockdown orders were implemented across the world, retailers were faced with a dramatic plummet in consumer demand for clothing. McCarty, who had been the sole breadwinner in her family for most of her life, was left without a steady income or health insurance. McCarty wasn’t the only one in the global apparel industry whose future was thrust into uncertainty. Thousands of miles away, in countries like Bangladesh, Sri Lanka and Cambodia, apparel factories had just received catastrophic news from retailers in the West. In order to offset the financial losses of the pandemic, executives had made a swift and nearly universal decision: They were going to steal $40 billion from their most vulnerable workers.”This wasn’t theoretical money,” said Elizabeth L. Cline, who works with the consumer activist nonprofit Remake. “This was garment workers not being paid for work already done, which is slavery.” For many brands, this theft was not only legal, but outlined in their contracts with factories overseas, which enabled them to cancel orders at any time. Retailers cited a force majeure clause to claim that they didn’t need to take clothing they had ordered before the pandemic – and they also didn’t have to pay for it, even if the product had already been made after hundreds of hours of painstaking labor.This decision was enforced by nearly all of the world’s most profitable apparel companies, only 20 of whom control 97 percent of the industry’s profits. Among the offenders were Walmart, Sears, Kohl’s, Nike, Forever 21, H&M, Gap, Adidas, The Children’s Place and Ross Stores.What followed was one of the largest transfers of wealth from the Global South to the West in recent history.The effect of the cancellations was immediate: factories, who could no longer afford to pay textile mills and workers, were forced to shut their doors. Millions of garment workers, most of them young women, were sent home without severance or pay.While wealthy fashion brands continued to deliver shareholder payouts, workers already living in poverty were plunged even deeper into debt and starvation.”Why were companies so comfortable robbing their factories in the middle of the biggest humanitarian crisis of our lifetimes?” Cline said. “It had a lot to do with the fact that the people impacted were in the Global South. They were women of color, who companies were used to being able to subjugate without any consequences – who they thought weren’t going to stand up to them.”The companies were wrong. In a matter of days, a movement was born, comprised of non-governmental organizations, or NGOs, and thousands of garment workers, grassroots organizers and consumers across the globe. They named their first campaign after their primary demand: PayUp.By March 2021, PayUp had secured $22 billion from brands who had initially refused to pay, and laid bare the exploitation fundamental to the global supply chain. It was one of the most successful labor rights campaigns in the fashion industry in modern times – and activists say they’re just getting started.
Australian paramedic details staffing crisis in New South Wales — A recent report by the federal Productivity Commission revealed that the New South Wales (NSW) Ambulance service lags behind the national average in per-capita funding as well as every measure of patient satisfaction. Only 59 percent of patients in NSW, Australia’s most populous state, were satisfied with the length of time they waited for an ambulance to arrive, compared to the national average of 64.5 percent, which is itself low. Total expenditure on ambulance services in the state was just $136.68 per person in the 2019-20 financial year, an increase of 25 percent over 2010-11. In the same decade, the national spend increased by 34 percent to $159.46 per person. An ambulance in Sydney earlier this year (Credit: Wikimedia, Helitak430) Staffing levels fell compared to population in NSW. While the number of full-time equivalent positions increased by 39 percent across the country during the decade, NSW staffing levels grew by only 18 percent. This was despite the state’s population having increased by 23 percent since 2010, compared to a national increase of 17 percent. World Socialist Web Site reporters spoke to a NSW paramedic about the conditions ambulance workers face. “We are hugely understaffed at the moment. There needs to be an injection of permanent staff. We are overworked. Instead, the ambulance service has introduced part-time and contract work, with no permanent security for the workforce. The existing workforce isn’t happy with that because it doesn’t address the existing understaffing. “Because the minimum operating levels haven’t been increased for 10 to 15 years, workloads have increased massively. You almost never get your breaks. There’s a never-ending stream of jobs that mount up and not enough ambulances and staff to cover those jobs. The prospect of getting any meaningful down time or rest is non-existent. “A huge amount of your pay is penalties in lieu of breaks. If you take breaks, then you are actually taking a pay cut because your base salary is quite low. Miss your two allocated breaks, you get a penalty. Over two weeks, missing all your breaks amounts to several hundreds of dollars in pay. On top of that you are doing shift overtime, more than 12 hours. Most of the time you are finishing one, two, or even three hours after your shift is supposed to end. “On the off chance that you may be able to get an allocated 30-minute break, after that you are straight back out and working continuously. On a night shift, even if you get that break it is hugely fatiguing to continuously go to difficult and stressful jobs. It all contributes to huge levels of fatigue, demoralisation and burnout. This has been a problem for decades.” A 2018 study of Australian paramedics found that 55.9 percent suffered total burnout and 62.7 percent suffered work-related burnout. The rate of suicide among paramedics is four times that of the general population. “Rostered shifts in Sydney are 12 hours and 15 minutes long. A day shift could be a 6:45 am start. You have 15 minutes to do a pre-shift check of the ambulance, sign out any restricted medications, and prepare yourself and the vehicle to respond. If you find any issues you have to deal with it in that 15-minute window. Often, because the workload is so high, a dispatch centre will call and request you go out before you complete the mandatory checks. “That contributes to a whole bunch of negative interactions for paramedics. If you don’t sign out medications then you can’t administer them to patients. If some of the equipment, like oxygen cylinders, is missing in our kit then we can turn up on scene without them because we were told to leave before checking.
Dutch ready to block AstraZeneca if UK deal fails – The Netherlands is ready to block shipments of AstraZeneca’s coronavirus vaccine if the United Kingdom does not agree to a deal to share vaccines more fairly with the EU, Dutch government officials told POLITICO.”If such an [EU-UK] agreement on sharing the delay proves impossible and the Commission were to decide to block an export request, the Dutch government can be expected to follow the Commission in its verdict,” said a Dutch diplomat.While the Netherlands “in principle” remained in favor of maintaining a free flow of vaccines across borders, it also was keen to make sure that AstraZeneca didn’t abuse that openness to fulfil only its contract with the United Kingdom, they said.”We must avoid a tipping point whereby exporting to third countries becomes problematic as a result of exports continuing whilst Astra’s supply to the Continent is choked off. That would result in a lose-lose scenario. To avoid that, Brussels and London together with AstraZeneca must compromise on the doses produced on the Continent.”Under an export control regulation imposed in January and recently extended until the end of June, EU countries can block shipments of vaccines after asking the Commission for an opinion on whether such exports pose a risk to the EU’s orders known as advance purchase agreements. AstraZeneca has fallen short of its delivery promises to the EU.
Italy coronavirus: Easter lockdown preparations as Covid-19 cases grow exponentially –Italy is facing another lockdown, as the government attempts to contain a recent surge of coronavirus cases, marred by the presence of new variants. Half of Italy’s 20 regions, which include the cities Rome, Milan and Venice, will be entering new coronavirus restrictions from Monday, March 15. The measures will be effective through April 6, according to a decree passed by Italian Prime Minister Mario Draghi’s cabinet on Friday. In regions demarcated as “red zones” people will be unable to leave their houses except for work or health reasons, with all non-essential shops closed. In “orange zones,” people will also be banned from leaving their town and their region — except for work or health reasons — and bars and restaurants will only be able to do delivery and take-away service. Affected regions will be labelled red or orange, depending on the level of contagion. Regions that report weekly Covid-19 cases of more than 250 per 100,000 residents will also automatically go into lockdown, meaning that other regions could also be affected during this time period. The health ministry said that the aim of the measures is to get the R rate — the number of people that one infected person will pass the virus onto — down to 1. Additionally, over Easter weekend, the entire country will be considered a “red zone,” and will be subject to a national lockdown from April 3 to 5. Italian Prime Minister Mario Draghi said new coronavirus measures are “necessary” because “we are unfortunately facing a new wave of infections” one year after the start of the pandemic. The country’s R rate is now at 1.6 with coronavirus variants increasing the spread of the virus, according to the health ministry. The variant B.1.1.7, which was first identified in the United Kingdom, is also now prevalent in the country, according to the health ministry, who also said that they are worried about the presence of small clusters of the Brazilian variant. The UK variant was originally found to be more easily transmissible — and new data published in the medical journal, the BMJ, supports claims from UK officials, based on preliminary data, that the variant may be more deadly, as well. Meanwhile, the variant first reported in Brazil, known as P.1, may be up to 2.2 times more transmissible and could evade immunity from previous Covid-19 infection by up to 61%, according to a modeling study, released earlier this month by researchers in Brazil and the UK.
Police in Germany clear streets to protect illegal demo by far-right coronavirus deniers -Up to 20,000 right-wing extremists and COVID-19 deniers marched through the Hessian city of Kassel on Saturday, attacking journalists and terrorising those opposing the demonstration. Police reacted by not only allowing the fascist mob to proceed, they cleared the streets for the illegal march and brutally attacked counter-demonstrators. They clearly sought to intimidate anyone who supports social distancing rules under conditions where infection figures in Germany are rising exponentially.Arguing on the basis of health considerations, a court decided that a single rally of 6,000 participants could take place outside the city centre. Thousands of demonstrators defied this legal requirement and marched in a number of different columns toward the city centre. They refused to respect the requirement to wear masks or the minimum distance recommendations.Demonstrators carried placards with slogans such as “End the lockdown” or “Take off the masks.” Many participants carried German flags, imperial flags or – as is usual at xenophobic Pegida demonstrations – the flags of the federal states from which they had travelled. Also on display were the identification badges of right-wing extremist organisations such as the Third Way party or the Q-Anon conspiracy group. The victims of National Socialism were mocked by persons wearing yellow stars and carrying portraits of the prominent victim of the Nazi holocaust, Anne Frank.In the run-up to the demonstration, the far-right milieu had mobilised for the Kassel demo throughout Germany and Europe. Appeals were made in far-right forums to “explore the city centre” and not comply with health protection measures. The demonstrators moved through the city centre from noon onwards and assembled at the city’s central Friedrichplatz, where they remained for the afternoon. The last of the demonstrators were only dispersed by police at around 7 p.m. For the rest of the day the demonstrators were able to move through the city centre largely unmolested. Police only resorted to the use of batons and tear gas when they were directly attacked with stones and bottles.
“I Take Full Responsibility”: Merkel Cancels Draconian Easter Lockdown Amid Backlash From Furious Germans One day after imposing a 5-day ultra-strict lockdown set to take effect over Easter weekend (presumably to head off any holiday-inspired spread), German Chancellor Angela Merkel has abandoned the plan, though Germany is still planning to extend its current restrictions through April 18. Merkel is dropping the plan after it inspired an intense public backlash and resistance by politicians in the opposition and Merkel’s coalition, anonymous sources reportedly told Bloomberg. Merkel informed the leaders of Germany’s 16 states in a video call on Wednesday morning that she was dropping the five-day lockdown, which would have closed all businesses. Even supermarkets would have been forced to limit operations. The planned restrictions also prohibited private gatherings of more than five adults from two different households, and required Easter services at German churches to be conducted virtually, angering Germans who already spent their Christmas holiday isolated from family members. During a meeting earlier this week, Germany’s local leaders reluctantly assented to the Chancellor’s plan. “I take full responsibility for this misjudgement,” Merkel told the state leaders. Asking forgiveness for the plan, she said that the shutdown was “created with the best of intentions” but it’s strictures are simply unable to be implemented. Many within Merkel’s ruling Christian-Democrat-led coalition applauded her decision. Bavarian Premier Markus Soder said that he respected the chancellor’s change of heart, while pointing out that the proposed restrictions had faced questions over their legality, RT reports. Merkel faced a barrage of criticism over the measures, including a ban on church services, which was particularly controversial. Clergy, and even Interior Minister Horst Seehofer, a longtime political ally, urged the chancellor to reconsider. Some state leaders even proclaimed that they would not abide by the rule. Saxony’s Prime Minister Michael Kretschmer said that his state would not prevent churches from holding in-person services.
Eviction ban in England extended to end of May, as tens of thousands of renters remain in crisis – As part of its reckless reopening of the economy, with everything to be fully reopened by June, the UK Conservative government is to end its ban on private sector evictions for rent arrears on May 31. The ban on evictions was introduced in March last year and has been extended several times. The government was forced into maintaining an eviction ban out of fear of the social backlash to hundreds of thousands of people being made homeless in the midst of a pandemic. With Prime Minister Boris Johnson declaring that the current lockdown will be the last, a massive wave of homelessness is set to hit the UK in England and Wales when the ban is lifted in just over two months. On March 10, Housing Minister Robert Jenrick announced that the evictions ban, that had been due to end March 31, would end May 31. In what is falsely described as a major concession, landlords and letting agents in England will, from May, have to give six-months’ notice of eviction, meaning that physical evictions can still start in November. However, those tenants with over 6 months’ accumulated rent arrears will still be able to be evicted after May 31 with just four weeks’ notice. Those deemed guilty of anti-social behaviour will also be able to be evicted with four weeks’ notice. The other main exemption is that landlords will be able to evict with just three months notice those deemed to have breached immigration rules under the “Right to Rent” policy. Housing charity Shelter warned that many tenants remain in a precarious position. “These extensions will come as a relief to the frightened renters who’ve been flooding our helpline with calls. While the threat level from the virus is still high, Shelter issued a March 16 press release based on a poll carried out for the charity by data analysis firm YouGov. The survey found around 14 percent of the population in England, around six million people feared homelessness because of big reductions in incomes and job losses following on from the pandemic. Shelter predicted, “With people’s incomes slashed, job losses mounting and people hanging onto their homes by a thread, the charity expects the pressure on its frontline services to grow.” The poll showed those renting privately were those most concerned about becoming homeless, with more than one in four (27 percent) expressing such fears. Nearly half (47 percent) of private renters were depressed or anxious about the housing situation compared to 26 percent of the general population. A quarter of private renters (2 million people) have suffered a cut in their incomes over the last six months leading to problems paying their rent. Over the last month, the survey showed, 24 percent of private renters have had to borrow money to meet their rent, while 18 percent had missed meals or cut back on food and 12 percent had cut back on heating in order to cover rent costs.
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