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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There are a few articles on the Biden budget that certainly had to take the pandemic into account, but many showing little reflection on COVID issues were not included. Otherwise we have the usual scope of topics:
FOMC Minutes: “The path of the federal funds rate and the balance sheet depend on actual progress” – From the Fed: Minutes of the Federal Open Market Committee, March 16-17, 2021. A few excerpts:In their discussion of current conditions, participants noted that the COVID-19 pandemic was causing tremendous human and economic hardship across the United States and around the world. Following a moderation in the pace of the recovery, indicators of economic activity and employment had turned up recently, although the sectors most adversely affected by the pandemic remained weak. Inflation continued to run below 2 percent. Overall financial conditions remained accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses. Participants noted that the path of the economy would depend significantly on the course of the virus, including progress on vaccinations, and that the ongoing public health crisis would continue to weigh on economic activity, employment, and inflation and posed considerable risks to the economic outlook….Participants judged that the Committee’s current guidance for the federal funds rate and asset purchases was serving the economy well. They noted that a benefit of the outcome-based guidance was that it did not need to be recalibrated often in response to incoming data or the evolving outlook. Participants also noted the importance of communicating to the public that the existing guidance, together with the new monetary policy framework as delineated in the revised Statement on Longer-Run Goals and Monetary Policy Strategy, meant that the path of the federal funds rate and the balance sheet depend on actual progress toward reaching the Committee’s maximum-employment and inflation goals. In particular, various participants noted that changes in the path of policy should be based primarily on observed outcomes rather than forecasts.Participants agreed that overall financial conditions were accommodative. They noted that the Federal Reserve’s asset purchases since last March had materially eased financial conditions and were providing substantial support to the economy. Participants noted that it would likely be some time until substantial further progress toward the Committee’s maximum-employment and price-stability goals would be realized and that, consistent with the Committee’s outcome-based guidance, asset purchases would continue at least at the current pace until then.
Powell: Fed wants to see ‘string of months’ of 1 million job gains — Federal Reserve Chairman Jerome Powell said Thursday that the Fed would be encouraged if the economy extends the 1 million-a-month pace of job gains seen in March. Last week, the Bureau of Labor Statistics reported that the economy added 916,000 non-farm payrolls in March, the fastest pace of growth since August. The surge in job gains comes alongside a national vaccine rollout, as the Centers for Disease Control and Prevention reports that 171 million Americans have received at least one dose. The central bank chief said charging ahead on vaccines is key to supporting more job creation as the re-openings continue. “We want to see a string of months like that so we can really begin to show progress toward our goals,” Powell said at an International Monetary Fund event Thursday. Powell’s use of the word “progress” offers a small new detail on how the central bank is thinking about its asset purchase program. In an effort to alleviate pressures in financial markets last year, the Fed has absorbed trillions in mortgage-backed securities and U.S. Treasuries since the depths of the pandemic. The Fed is still snatching up $120 billion a month in assets, promising to continue the aggressive support until “substantial further progress” is made toward the Fed’s goals on maximum employment and price stability. By linking “progress” to a “string of months” like the March jobs report, Powell is suggesting that the Fed will not pull back on its asset purchases unless it sees multiple months of large job creation.”We just need to keep reminding ourselves that even though some parts of the economy are starting just great, there’s a very large group of people who are not,” Powell said. The remark also reveals the central bank’s greater attention to the labor market over inflationary pressures, where Powell did not express concern over rising inflation. The Fed chief noted Thursday that bottlenecks in global supply chains may lead to temporary price increases, but not “materially” in a way that would push the central bank to have to raise interest rates. Minutes from the Fed’s March policy-setting meeting similarly described inflationary pressures as likely to be “transitory,” whereas the labor market were “well below levels consistent with maximum employment.” IMF managing director Kristalina Georgieva, who appeared on the panel alongside Powell, encouraged central bankers around the world to be patient on pulling easy money policies while the global vaccination rollout attempts to suppress the virus.”Only then, Chair Powell can think seriously about an exit strategy, which of course matters tremendously for the United States [and] matters for the rest of the world,” Georgieva said.
Fed policymakers see risk from infections, not inflation (Reuters) -The U.S. Federal Reserve plans to keep its super-easy policy in place even as data shows the economy kicking into higher gear, with policymakers predicting on Thursday that an expected increase in prices this year will fade on its own, and warning about the recent uptick in COVID-19 infections. “Cases are moving back up here, so I would just urge that people do get vaccinated and continue socially distancing,” Fed Chair Jerome Powell, who has had his shots, said at an economic forum during virtual International Monetary Fund and World Bank meetings. “We don’t want to get another outbreak; even if it might have less economic damage and kill fewer people, it’ll slow down the recovery.” Speaking at a separate event, St. Louis Federal Reserve Bank President James Bullard said the Fed should not even discuss changes in monetary policy until it is clear the pandemic is over, tying future Fed discussions tightly to the success of the vaccination effort. The Fed has said it will keep buying $120 billion in bonds a month until it sees “substantial further progress” toward meeting the central bank’s employment and inflation goals. Bullard said he regards that as contingent on beating the coronavirus. “We have to get the pandemic behind us first,” he said. “There are still risks, and things could go in a different direction.” The Fed has long said the virus, which touched off the sharpest downturn in decades just over a year ago, will determine the course of the recovery. Some 3 million Americans are getting vaccinated every day, and a majority of older Americans at highest risk of dying from COVID-10 have been fully vaccinated. That, along with last month’s $1.9 trillion pandemic relief package and the Fed’s near-zero interest rates, sets the economy up for what Fed officials expect to be the fastest growth in 40 years this year. But new variants of the virus are driving surges in caseloads in swaths of the Midwest and Northeast particularly. Minneapolis Fed President Neel Kashkari told the Economic Club of New York in yet another virtual event on Thursday that those variants, and the school and daycare center closures they could force, are the “biggest risks” to the U.S. recovery. Meanwhile, much of the world has barely begun mass vaccinations, posing what policymakers said was another risk.
Biden, touting Fed independence, yet to speak with Powell – President Biden said he hasn’t spoken with Federal Reserve Chair Jerome Powell since taking office more than two months ago, citing respect for the central bank’s independence and marking a sharp turn from his predecessor, Donald Trump. “The Federal Reserve is an independent operation and, starting off my presidency, I want to be real clear that I’m not going to do the kinds of things that have been done in the last administration,” Biden said on Tuesday in response to a question. “I’ve been very fastidious about not talking to them, but I do talk to the secretary of the Treasury,” Janet Yellen, he said. Trump repeatedly applied pressure on Powell and the Fed via Twitter, drawing rebukes from around the world for interfering with the world’s most powerful monetary authority. From 2018 through 2020, Trump attacked Powell for raising rates too fast or not juicing the economy enough to accommodate his trade war with China. In December 2018, he considered firing the Fed chair, an unprecedented move that would have risked roiling markets and compromising the central bank’s independence. Powell’s four-year term as Fed board chair comes due in February 2022, and Biden will have to decide whether to reappoint him or nominate someone else later this year. Powell was appointed to the board by President Barack Obama and later elevated to chair by Trump. Powell has signaled interest in continuing on as Fed chair, but a decision on Powell’s fate probably isn’t imminent. Trump didn’t name Powell until November 2017 for a stint that started February the following year. Other Fed chiefs have been announced a few months earlier.
Q1 GDP Forecasts: Around 7% –Note that the forecasts of the automated systems (based on released data) are lower than the forecasts of economists. Economists are expecting March to be very strong. From Merrrill Lynch: We continue to track 7.0% for 1Q GDP growth. [Apr 9 estimate] From Goldman Sachs: We left our Q1 GDP tracking estimate unchanged at +7.5% (qoq ar). [Apr 9 estimate] From the NY Fed Nowcasting Report:The New York Fed Staff Nowcast stands at 6.0% for 2021:Q1 and 1.5% for 2021:Q2. [Apr 9 estimate]And from the Altanta Fed: GDPNow: The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2021 is 6.0 percent on April 9, down from 6.2 percent on April 7. [Apr 9 estimate]
Seven High Frequency Indicators for the Economy – These indicators are mostly for travel and entertainment. The TSA is providing daily travel numbers. This data shows the seven day average of daily total traveler throughput from the TSA for 2019 (Light Blue), 2020 (Blue) and 2021 (Red). This data is as of April 4th. The seven day average is down 37.7% from the same week in 2019 (62.3% of last year). (Dashed line) The second graph shows the 7 day average of the year-over-year change in diners as tabulated by OpenTable for the US and several selected cities. This data is updated through April 3, 2021. This data is “a sample of restaurants on the OpenTable network across all channels: online reservations, phone reservations, and walk-ins. Note that this data is for “only the restaurants that have chosen to reopen in a given market”. Since some restaurants have not reopened, the actual year-over-year decline is worse than shown. This data shows domestic box office for each week and the median for the years 2016 through 2019 (dashed light blue). Blue is 2020 and Red is 2021. The data is from BoxOfficeMojo through Apr 2nd. Movie ticket sales were at $40 million last week, down about 78% from the median for the week. This 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 – before 2020). Even when occupancy increases to 2009 levels, hotels will still be hurting. This data is through March 27th. Hotel occupancy is currently down 16.7% compared to same week in 2019). Note: Occupancy was up year-over-year, since occupancy declined sharply at the onset of the pandemic. However, occupancy is still down significantly from normal levels. This graph, based on weekly data from the U.S. Energy Information Administration (EIA), shows gasoline supplied compared to the same week of 2019. Blue is for 2020. Red is for 2021. As of March 26th, gasoline supplied was off about 2.6% (about 974.4% of the same week in 2019). Gasoline supplied was up year-over-year, since at one point, gasoline supplied was off almost 50% YoY in 2020. This graph is from Apple mobility. From Apple: “This data is generated by counting the number of requests made to Apple Maps for directions in select countries/regions, sub-regions, and cities.” There is also some great data on mobility from the Dallas Fed Mobility and Engagement Index. This data is through April 3rd for the United States and several selected cities. According to the Apple data directions requests, public transit in the 7 day average for the US is at 63% of the January 2020 level. It is at 59% in Chicago, and 58% in Houston (the Houston dip was a weather related decline) – and moving up recently. Here is some interesting data on New York subway usage .. This graph is from Todd W Schneider. This is weekly data since 2015. Most weeks are between 30 and 35 million entries, and currently there close to 10 million subway turnstile entries per week. This data is through Friday, April 2nd. Schneider has graphs for each borough, and links to all the data sources.
President Joe Biden’s 1st budget seeks more money for education, defense, climate efforts – (UPI) — President Joe Biden submitted his first budget request to Congress on Friday, in which he’s proposing a 16% increase in domestic spending and asking for less defense spending than former President Donald Trump did.In the 58-page $1.52 trillion budget request for 2022, more money would go toward domestic programs to reduce poverty, strengthen environmental protection and aid public education.The proposal includes a 1.5% increase in the amount last approved by Congress, but it asks for an amount lower ($715 billion) than Trump did ($722 billion) in his final budget request last year.Biden’s proposed defense spending, compared to increases under Trump in recent years, is expected to draw criticism from congressional Republicans as insufficient and progressive Democrats as excessive. Some in the president’s party have called for up to a 10% cut in Pentagon funding.The federal government will need a new funding agreement before federal money runs out at the end of September. Typically, Congress considers the president’s budget request when drawing up new budget resolutions, but they are not binding. The government’s 2022 fiscal year begins Oct. 1.The budget request comes as Biden also seeks trillions of dollars in new infrastructure spending. The president outlined his $2 trillion infrastructure plan last week, declaring it a “big” and “bold” proposal that’s essential to the economic future of the United StatesBiden’s administration has said the lack of cooperation from Trumpand his departments during the transition created delays in generating a formal budget request. A complete budget outline that includes tax proposals and spending for programs like Social Security will be released later this spring.
Civilian agencies would see a 16% spending boost under Biden’s 2022 budget –Federal civilian agencies are the big winners in President Joe Biden’s 2022 budget request, which administration officials previewed Friday. The president’s 2022 budget request calls for $769 billion in non-defense discretionary spending, a 16% increase over 2021 levels, and $753 billion for defense programs. Defense programs will see a modest 1.7% spending bump in 2022, which administration officials said would largely cover pay increases for military members and the civilian employees who support them. The administration didn’t specify what the 2022 pay increase would be. Biden is considering a 2.7% federal pay raise for civilian employees, which Federal News Network first reported last week. “For the past decade, due to overly restrictive budget caps, our country has under-invested in core public services, benefits and protections that are incredibly important to our success,” an administration official told reporters Friday. “Since 2010, non-defense discretionary has shrunk significantly as a share of the U.S. economy.” “This administration believes now is the time to begin reversing this trend and reinvesting in the foundations of our country’s strength.” Friday’s release is only a preview of the Biden administration’s 2022 budget request. It will release the full 2022 proposal in the “months ahead,” administration officials said. “This is something we hope will start a conversation about the right size of non-defense discretionary [spending],” the official said. “You’ve seen budget deals happen every two years during the Budget Control Act because there was a bipartisan awareness that we were not investing the right amounts into those programs. However, we were still very limited in what we could invest and this budget is intended to right the shop, so to say, in a lot of areas that both parties have shown historic interest in.”
Biden budget would beef up IRS tax enforcement -Yellen –(Reuters) -U.S. Treasury Secretary Janet Yellen said on Friday that the Internal Revenue Service budget would increase by $1.2 billion or 10.4% under President Joe Biden’s fiscal 2022 budget request. Yellen, in a statement, said the $13.2 billion overall IRS budget would include an additional $900 million for tax enforcement in fiscal 2022. The Treasury is seeking to increase revenues by shrinking the “tax gap,” the difference between taxes legally owed and those collected. IRS officials have said that more than a decade of reduced or stagnant budgets have left the agency with 15,000 fewer revenue agents than it had in 2010, forcing it to reduce the number of audits it conducts and leaving significant tax fraud undetected. Yellen said the budget request will increase fairness in the tax system. “It will make paying taxes a more seamless process for millions of Americans. And it makes sure that corporations actually pay what they owe,” she said in a statement. The proposed Biden budget for fiscal 2022, which starts on Oct. 1, includes a request for $330 million to support Community Development Financial Institutions, which serve low-income and minority areas, an increase of 22.2% over the fiscal 2021 normal appropriation. The amount would build on a $12 billion injection into CDFIs and minority-owned banks that was approved as a part of the 2020 year-end coronavirus rescue legislation. The Treasury also is requesting a $64 million increase for the Financial Crimes Enforcement Network, which combats money laundering and polices financial reporting, bringing the fiscal 2022 total for the agency to $191 million.
The case for expropriation: Billionaires’ wealth surged 60 percent in first year of pandemic – The collective wealth of the world’s billionaires exploded by more than 60 percent last year, from $8 trillion to $13.1 trillion, according to Forbes magazine’s annual list of global billionaires, released on Tuesday. “COVID-19 brought terrible suffering, economic pain, geopolitical tension – and the greatest acceleration of wealth in human history,” Forbes writes. The number of billionaires in the world grew by 660 to 2,775, the biggest total number and the largest annual increase ever. A new billionaire was minted every 17 hours. Amazon CEO Jeff Bezos and Tesla CEO Elon Musk lead the pack with $177 billion and $151 billion, respectively. They are followed by Bernard Arnault and family ($150 billion), who control the French luxury goods company LVMH, Microsoft co-founder Bill Gates ($124 billion) and Facebook CEO Mark Zuckerberg ($97 billion). Press reports discuss how Zuckerberg “earned” $50 billion and Elon Musk “earned” $130 billion last year. But the very term is an absurdity. One cannot “earn” a figure equivalent to the gross domestic product of a mid-size country. This wealth is socially appropriated. First, through the exploitation of the working class in the process of production. Second, and no less important, the wealth is appropriated as the result of state policy, designed to ensure the perpetual rise of the stock market through a combination of monetary stimulus from the Federal Reserve and the provision of an endless supply of cheap labor for exploitation. As a result, the S&P 500 stock index has nearly doubled since its low in March 2020. Amid a raging pandemic, every country in Europe and the Americas has refused to shut down nonessential production, claiming the cost would be too high. This policy, which has led to the deaths of over three million people, has the deliberate aim of expanding the wealth of the financial oligarchy. With each death, an average of $1.7 million was added to the net worth of the billionaires. Hundreds of millions of people around the world got sick on the job or were thrown out of work. Hundreds of millions went hungry. But the stock portfolios of the wealthy soared to ever greater heights. The piling up of immense sums at the top of society is made possible by the immiseration of the working class and poor.
U.S. Senator Manchin, in threat to Biden agenda, opposes reconciliation, backs filibuster (Reuters) -U.S. Democratic Senator Joe Manchin, a pivotal vote in the evenly divided Senate, said on Wednesday he was opposed to a process called reconciliation that makes it easier to pass bills without Republican support, a potential blow to President Joe Biden’s chances of passing a huge infrastructure measure. Manchin also said he would not support any step to weaken the ability of Republicans to mount filibusters to block legislation. Some Democrats want to toss aside the filibuster rule, which requires 60 votes in the 100-member chamber to approve most bills. “I simply do not believe budget reconciliation should replace regular order in the Senate,” Manchin said in an opinion piece in the Washington Post. “Senate Democrats must avoid the temptation to abandon our Republican colleagues on important national issues.” Democrats relied on the budget reconciliation process to avoid a possible Republican filibuster and pass Biden’s $1.9 trillion coronavirus relief bill in March with a simple majority in the Senate. They have been considering doing the same with Biden’s proposed infrastructure package. “The filibuster is a critical tool to protecting that input and our democratic form of government. That is why I have said it before and will say it again to remove any shred of doubt: There is no circumstance in which I will vote to eliminate or weaken the filibuster,” Manchin said. “Every time the Senate voted to weaken the filibuster in the past decade, the political dysfunction and gridlock have grown more severe,” Manchin wrote, saying it was time to end “political games” and return to a “new era of bipartisanship.” The centrist Democrat from West Virginia said last month he could see making filibusters more “painful” to carry out, although he was not in favor of eliminating them.
Calls to establish a regionally adjusted federal minimum wage are dangerously misguided – EPI – We need to raise the federal minimum wage. Its deterioration in value over the past five decades hasexacerbated poverty, widened inequality, and lowered wages for the bottom third of wage earners1 – despite the fact that these workers typically are older and have more education than their counterparts a generation ago. One misguided critique of the effort to raise the federal minimum to $15 in 2025 is that there is a need to establish a regionally adjusted federal minimum wage. In fact, federal minimum wage policy has always provided for tailored standards, by coupling a strong national wage floor with the ability for cities and states to adopt higher standards. In 1968, when the federal minimum wage was lifted to its highest value in U.S. history and coverage of the law was vastly expanded, there were much larger differences in wage levels throughout the country. Yet, we now have empirical evidence that establishing this unprecedented, nationwide minimum wage did not have adverse employment impacts. Today, the wage levels of lower-wage states, primarily Southern ones, are much closer to overall national wage levels, so there is even less validity to claims that the federal minimum wage must be lowered to accommodate certain areas. Moreover, the ‘bite’ of a $15 minimum wage in 2025 – i.e., the share of workers and businesses impacted, and the magnitude of resulting wage increases – will be well within the range of recent experiences of minimum wage increases in states and localities that studies have shown had little, if any, impact on employment. A $15 minimum wage in 2025 would be an appropriate and economically manageable level for the national wage floor. Data from EPI’s Family Budget Calculator – which compiles the typical costs of basic necessities throughout the country – show that by 2022, there is not a county in the U.S. where an individual working full time, year round could achieve a secure standard of living earning less than $15 per hour. Moreover, $15 in 2025 is the equivalent of $13.79 in today’s dollars. Taking the federal minimum to this level would be an increase of about 30% above the 1968 peak, when the minimum wage was worth the equivalent of $10.59 in today’s dollars. Over the past 50 years, productivity – the value of goods and services produced from each hour of work in the economy – has more than doubled. The minimum wage should be set at a level that ensures all workers, including those in the lowest-paid jobs, benefit from the economy’s increased capacity to generate income – particularly when low-wage workers today tend to have higher levels of education than their counterparts in the 1960s. Setting regional thresholds is bad policy and would cement racial and gender wage disparities. The argument that it would be better to adapt the federal minimum wage to local conditions is described as avoiding a ‘one-size-fits-all‘ policy imposed on states regardless of local conditions. That is a mischaracterization of federal policy, however, since there is wide variation in minimum wages across states and localities (where states permit) as subnational governments adopt higher standards. The purpose of federal law is to set a national floor which provides a living wage to all workers and brings wages in lower-wage states closer to those in higher-wage areas.
White House rules out involvement in ‘vaccine passports’ – White House press secretary Jen Psaki on Tuesday ruled out the Biden administration playing any role in a “vaccine passport” system as Republican governors in particular balk at the concept. “The government is not now, nor will we be supporting a system that requires Americans to carry a credential. There will be no federal vaccinations database and no federal mandate requiring everyone to obtain a single vaccination credential,” Psaki told reporters at a briefing. The White House has been clear that it would defer to private companies if they wanted to implement some type of vaccine passport system in which individuals would have to provide proof that they received one of the coronavirus shots. “Our interest is very simple from the federal government, which is American’s privacy and rights should be protected so that these systems are not used against people unfairly,” Psaki said. The federal government will provide guidance about privacy related to the coronavirus vaccines, Psaki said, though she did not provide a timeline. Talk of vaccine passports has sparked pushback among conservatives who have raised concerns about potential government overreach that would discriminate against Americans who opt not to get vaccinated and infringe on their privacy rights. Texas Gov. Greg Abbott (R) on Monday issued an executive order prohibiting vaccine passports, saying a system to track those who have been inoculated against COVID-19 infringes on citizens’ rights.
Fauci’s NIAID Shielded Wuhan Bat Research Grant From Government Oversight – In 2017, a subagency of the National Institutes of Health (NIH) – headed by Dr. Anthony Fauci – resumed funding a controversial grant to genetically modify bat coronaviruses in Wuhan, China without the approval of a government oversight body, according to the Daily Caller. For context, in 2014, the Obama administration temporarily suspended federal funding for gain-of-function research into manipulating bat COVID to be more transmissible to humans. Four months prior to that decision, the NIH effectively shifted this research to the Wuhan Institute of Virology (WIV) via a grant to nonprofit group EcoHealth Alliance, headed by Peter Daszak. The first $666,442 installment of EcoHealth’s $3.7 million NIH grant was paid in June 2014, with similar annual payments through May 2019 under the “Understanding The Risk Of Bat Coronavirus Emergence” project. Notably, the WIV “had openly participated in gain-of-function research in partnership with U.S. universities and institutions” for years under the leadership of Dr. Shi ‘Batwoman’ Zhengli, according to the Washington Post’s Josh Rogin. In 2017, however, the “Potential Pandemic Pathogens Control and Oversight (P3CO) was formed within the Department of Health and Human Services (HHS),” which was tasked with evaluating the risks involved with enhancing dangerous pathogens, as well as whether proper safeguards are in place, before a grant into ‘gain-of-function’ or similarly risky research can be issued. Fauci’s National Institute of Allergy and Infectious Diseases (NIAID) – the subagency which funded EcoHealth – didn’t think the grant needed review, and resumed their relationship with Daszak without flagging it for the P3CO committee, an NIH spokesperson told the Caller. “This is a systemic problem,” says Rutgers University professor of chemical biology, Richard H. Ebright, referring to the loophole in the review process – and adding that NIAID and NIH have “systematically thwarted – indeed systematically nullified – the HHS P3CO Framework by declining to flag and forward proposals for review.”
Pfizer CEO says Trump told him vaccine ‘will help me’ with election –Pfizer CEO Albert Bourla says in an interview set to run Friday that former President Trump told him before last year’s election that a coronavirus vaccine could help his chances. On clips from “The Carlos Watson Show” provided in advance exclusively to The Hill, Bourla says that Trump would call to encourage him to get the vaccine out quickly, but emphasized that “he never pressed me to do something that would be inappropriate with a vaccine.” “In the few times that he was telling me that we need to do it fast – first he would say, ‘We need to do it quickly; people are dying,’ and then also he would add, ‘Of course it will help me also in the election, but people is the important thing.'” The head of Pfizer, whose vaccine against COVID-19 became the first approved for use in the U.S. in December, acknowledged that he too wanted to get the vaccine out as soon as possible, but said that he made it clear to both Trump and now-President Biden’s campaign that the development would “move with the speed of science.”
Lenders want more funding for newly extended PPP – Lenders who successfully lobbied for more time to make Paycheck Protection Program loans now want more money to be made available for the program. Though the PPP’s expiration date was recently extended from March 31 to May 31, there are concerns the program’s remaining $66 billion of funding could run out before the end of April. The amount of available funds could drop substantially if thousands of applications stalled by error codes make their way through the Small Business Administration’s portal. And a number of banks that stopped making PPP loans resumed operations when the extension was passed. The government “will disappoint a lot of people if it is unable to get its act together in terms of getting the money in play,” Biz2Credit CEO Rohit Arora said. “If there’s enough demand to exhaust funding, there’s a very good argument to top it off,” said John Asbury, president and CEO of the $19.6 billion-asset Atlantic Union Bankshares in Richmond, Va. The Biden administration’s decision to let sole proprietors, independent contractors and other small-scale entrepreneurs qualify for bigger loans – replacing net profit with gross income as the basis for calculating maximum loan sizes – boosted interest in the program. The SBA implemented the change on March 8. “We’re seeing our pace increase” because of the administration’s change, said Sam Sidhu, vice chairman and chief operating officer at $18.6 billion-asset Customers Bank in Wyomissing, Pa. “We’ve had the two biggest weeks we’ve had so far the last two weeks, over 20,000 loans,” Sidhu added. “We would expect this week to be just as big, if not bigger. The volume of loans has kicked up because people are coming off the sidelines.” The PPP was designed to offer forgivable loans of up to $10 million to small businesses with 500 or fewer employees. Because loan amounts were derived initially using a borrower’s pre-pandemic profit, the smallest firms, which typically operate on thinner margins, were effectively shut out during the first phase, which lasted from April 3 to Aug. 8. The SBA approved 5.2 million loans totaling $525 billion in the first phase, for an average loan size of $101,000. Congress authorized $284 billion in funding when the PPP was reauthorized in late December; recent legislation added another $7 billion to the program.
CFPB moves to delay implementation of debt collection rules – The Consumer Financial Protection Bureau on Wednesday proposed postponing implementation of two new Fair Debt Collection Practices Act rules governing borrower communication, which currently have a Nov. 30 start date.One rule delineates what constitutes harassment, false representation and unfair practices by debt collectors. The other clarifies the disclosures collectors must provide to consumers regarding communication with credit reporting agencies and prohibits collectors from threatening to sue borrowers with time-barred debt.The delay would mean that third-party mortgage servicing entities and others governed by the FDCPA will not be able to use the new safe harbors for compliance until Jan. 29, 2022. The proposal has a 30-day comment period.Acting CFPB Director Dave Uejio had previously signaled that he might delay the rules to reconsider them, but the current proposal suggests only that the bureau wants to give affected parties more time to comply due to the pandemic.The proposed delay comes a day after the CFPB issued a consent order against a debt collector, Yorba Linda Capital Management, for allegedly harassing thousands of consumers by falsely threatening them with legal action.”Debt collectors often run afoul of consumer law when they coerce customers to pay them by exaggerating the consequences of not paying,” Uejio said in a press release issued Tuesday.He called the action, “a reminder that debt collectors must stick to the truth when communicating with customers.”In the consent order, the CFPB calls upon the debt collector to pay a civil money payment of $2,200 to the bureau and seeks monetary relief and damages totaling $860,000.However, full payment of the relief has been suspended since respondents claim they currently have an inability to pay, according to the consent order.
CFPB tries to stave off COVID-19 foreclosure surge – The Consumer Financial Protection Bureau proposed new steps Monday intended to avert a wave of foreclosures resulting from borrowers exiting their mortgage forbearance plans. The deadline for borrowers affected by the COVID-19 pandemic to request or extend a forbearance plan is June 30, which is also the end of a foreclosure moratorium on federally backed mortgages. As a result, analysts expect a potential surge of delinquencies in the fall. CFPB officials note that many of the borrowers currently in forbearance are more than 120 days late on their payments. Under the new proposal, a lender or servicer could not immediately foreclose on a home once the forbearance period ends. The set of rule changes would institute a “special pre-foreclosure review period” that would generally block most servicers from initiating foreclosure proceedings until after Dec. 31. Servicers could offer simplified loan modification options to borrowers experiencing pandemic-related hardship. Agency officials told reporters in a call that the impending end of many forbearance plans could put pressure on servicers trying to respond to the situation. “We are at really an unusual point in history. I don’t think anybody has ever before seen this many mortgages in forbearance at one time that are expected to exit forbearance all at one time,” said Diane Thompson, a senior adviser to acting CFPB Director Dave Uejio. “This could put an enormous strain on servicer capacity.” The proposed changes would apply to the entire mortgage market, senior CFPB officials said, and not just federally backed loans that have been subject to a foreclosure moratorium since last year. “Our proposal would give struggling homeowners a critical lifeline while also ensuring mortgage servicers can do their work effectively,” Uejio said in the call with reporters. “Foreclosures can be devastating for homeowners, they lower property values in surrounding neighborhoods and they are expensive for servicers and investors alike. We are going to use everything in our toolbox to prevent avoidable foreclosures.” If a loan modification were to include payment deferrals, servicers would not be able to charge any fees or accrue any interest on those payments, the CFPB said. Late fees and “stop payment fees” would also be waived. At the end of a forbearance period, the proposal requires servicers to inform borrowers if they can extend their forbearance plan again and to detail to them their loss mitigation options. If finalized, those provisions would be in effect until Aug. 31, 2022. Mortgage servicers dealing with less than 5,000 loans would generally be exempt from the rule.
Black Knight Mortgage Monitor for February – Black Knight released their Mortgage Monitor report for February today. According to Black Knight, 6.00% of mortgages were delinquent in February, up from 5.85% of mortgages in January, and up from 3.28% in February 2020. Black Knight also reported that 0.32% of mortgages were in the foreclosure process, down from 0.45% a year ago.This gives a total of 6.32% delinquent or in foreclosure. Press Release: White-Hot Housing Market and Rising Rates Push Affordability Back to 5-Year Average; Low New Listing Volumes Further Constraining Inventory Today, the Data & Analytics division of Black Knight, Inc. released its latest Mortgage Monitor Report, based upon the company’s industry-leading mortgage, real estate and public records datasets. This month, with the U.S. housing market remaining extremely hot by any historical measure, the report looks at home price appreciation over the past year and how that’s impacted affordability. “Our repeat sales-based Black Knight Home Price Index shows February’s annual price appreciation at 11.6%, the fastest growth rate in more than 15 years,” said Graboske. “Likewise, the daily home sales data tracked by our Collateral Analytics group found a nearly 16% year-over-year increase in the median sales price in February. Multiple years of constrained housing inventory and historically low interest rates have helped fuel this fire to the point where nearly 75% of the 100 largest U.S. markets have seen annual home price growth of 10% or higher. What’s more, Collateral Analytics’ Market Conditions Report shows the housing markets in 75% of ZIP codes rated either ‘Strong’ or ‘Hot’ based on underlying market metrics. Only 7% are characterized as ‘Normal.’ Housing is now the least affordable it’s been – factoring in interest rates, home prices and income – since mid-2019. Any hopes of 2021 bringing an influx of homes to the market and lessening pressure on prices appear to be dashed for now, as new for-sale listings were down 16% and 21% year-over-year in January and February, respectively. Here is a graph from the Mortgage Monitor that shows Active Inventory and New Listings. From Black Knight:
Entering 2021, the number of homes listed for sale was down 32% year-over-year and had fallen to its lowest level on record, according to Black Knight’s Collateral Analytics division
The hopes that early 2021 would bring much-needed inflow of inventory to a market starved for supply have been dashed so far, with new listing volumes coming in well below pre-pandemic levels
In fact, the number of homes listed for sale in January was down 16% from the year prior, while new listings in February were down 21%
Rather than an influx, we now have 125K fewer listings than over the first two months of 2020 and are trending in the wrong direction with inventory down 40% year-over-year After eight consecutive months of improvement, the national mortgage delinquency rate rose in February from 5.85% to 6.0%
Delinquency rate increases were seen broadly across portfolios, geographies and asset classes
Despite the rise, 30-day delinquencies remain 19% below pre-pandemic levels, while there are still 5X (+1.7M) as many 90-day delinquencies as there were in February 2020
There is much more in the mortgage monitor.
MBA Survey: “Share of Mortgage Loans in Forbearance Decreases to 4.90%” – Note: This is as of March 28th. From the MBA: Share of Mortgage Loans in Forbearance Decreases to 4.90%: The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 6 basis points from 4.96% of servicers’ portfolio volume in the prior week to 4.90% as of March 28, 2021. According to MBA’s estimate, 2.5 million homeowners are in forbearance plans…. “The share of loans in forbearance decreased for the fifth straight week, and new forbearance requests dropped to their lowest level since March 2020. The share of loans in forbearance also decreased for all three investor categories,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “More than 21 percent of borrowers in forbearance extensions have now exceeded the 12-month mark. Of those that exited forbearance in March, more than 21 percent received a modification, indicating that their income had declined and they could not afford their original mortgage payment.” Fratantoni added, “March was a turning point for the economy, with hiring shifting into a higher gear and the unemployment rate continuing to decline. However, there are still more than 4.2 million people who have been actively looking for work for more than six months. Homeowners who are still facing hardships and need to extend their forbearance term should contact their servicer.” 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 0.05% to 0.04%, 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 April 6th. From Black Knight: U.S. Sees Largest Weekly Forbearance Decline in Six Months: We continue to see great improvements in forbearance plan numbers, with this week showingthe largest weekly decline in six months. The number of outstanding forbearances fell by 228,000 (-9.0%), largely driven by early forbearance entrants exiting their plans at or around the 12-month mark. Significant improvements were seen across investor classes, with decline of 94,000 in FHA/VA plans, a 69,000 decline in GSE forbearances and portfolio/PLS plan volumes declining by 65,000 this week alone. Overall, an estimated 280,000 borrowers exited forbearance this week, representing more than half of all loans being reviewed for extension and removal. Forbearance plan starts also continue to improve, with an estimated 158,000 such starts (including re-starts) over the past four weeks, down 18 percent from the preceding four-week period. All in, some 2.3 million borrowers remain in forbearance as of April 6, representing 4.4% of all outstanding first-lien mortgage holders. With an estimated 500,000 additional forbearance plans with scheduled expirations at the end of April, we could see additional improvements near the end of this month and into early May. We’ll keep an eye on the numbers and have another report on Friday, April 16. The number of loans in forbearance continues to decline.
Despite Federal Moratorium, Increasing Number of Texas Renters Face Eviction as State Protection Expires –Texans behind on their rent are at increasing risk of losing their homes despite a federal moratorium on evictions, according to housing attorneys, because a Texas Supreme Court order aimed at forestalling evictions has expired.The nationwide order from the Centers for Disease Control and Prevention halting evictions through June 30 – originally issued under the Trump administration – has been an important bulwark against a housing crisis as people lost jobs and income during the pandemic, housing advocates say.But an emergency order issued by the Texas Supreme Court that instructed judges across Texas how to follow the federal mandate expired March 31.Without the explicit backup of the moratorium from the state’s highest civil court, Texas landlords could resume pursuing evictions of people affected by the pandemic, housing advocates said, and it could fall to the federal government to enforce the CDC order.”A lot of people have been saying for the last year that this eviction wave is coming and that we are about to step off this cliff into the abyss. With this latest news, we just stepped off that cliff. This is the worst case scenario,” said Mark Melton, an attorney who has helped hundreds of Dallas-area tenants during the pandemic. “This basically says that if a landlord wants to risk federal prosecution, that’s their business, not our problem. And if they want the eviction we have to grant it under state law.”The Texas Justice Court Training Center, which trains judges and issues procedural guidance, has updated its eviction-related guidelines to say that Texas courts can proceed with eviction cases, although “the landlord might choose to place this case on hold.””This just means that the courts in Texas would follow Texas procedure in law, which doesn’t have anything in it about the CDC moratorium. Now there could be local laws that would maybe have a moratorium,” said Theadora Wallen, the training center’s executive director.To be protected by the CDC order, renters must sign a declaration stating they risk homelessness due to effects of the pandemic, among other requirements. The CDC order subjects violators to fines up to $100,000 and a year in jail. The penalties are steeper if violating the order results in death. Until March 31, justices of the peace in Texas played a key role enforcing it, halting eviction proceedings they believed violated the CDC order. Now it will be up to individual judges to decide whether to follow the federal orders. Meanwhile, a Texas program meant to financially help renters who have fallen behind has barely taken root.
Brief Discussion: The Impact of Rising Mortgage Rates on Home Sales and House Prices -CR Note: There is quite a bit of information (and charts) in this article by Matthew Graham at MortgageNewsDaily: Who’s Lying About The Housing Market?. Here are a few excerpts on the impact of mortgage rates on home sales and house prices. The inventory situation may mean that prices remain more resilient in the current housing cycle despite the recent surge in interest rates. Even then, past examples of rate spikes have only had moderate impacts on housing. Using the same home sales data from above, let’s highlight previous rate spikes so we can see the impact… There was a big rate spike at the end of 2016 that had no discernible effect on prices. This is notable because that rate spike was fueled by economic optimism as opposed to 2013’s rate spike which happened after the Fed said they would begin decreasing their rate-friendly bond buying program. 2018 was somewhat similar as the Fed was continuing to tighten monetary policy and raise short term interest rates. A case could be made that the current rate spike shares some similarities with 2016. The path of 10yr Treasury yields (a benchmark for longer term rates like mortgages) has largely traced pandemic progress and economic recovery hopes. Yields (aka rates) began rising late last summer as vaccine trials showed promising results and economic data began to improve.Bottom line, it is a rising rate environment until further notice. If we don’t see a negative turn of events for the economy, rates will eventually run out of steam for other reasons. But that could take time, and the overall rate spike could rival the worst past examples by the time it fully runs its course.CR Note: There is much more in the article. As Graham notes, inventory is the key,
CoreLogic: House Prices up 10.4% Year-over-year in February — The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA). From CoreLogic: Market Forces at Work: Supply Constraints and Buyer Demand Pushes US Home Price Annual Appreciation to 15-Year High in February, CoreLogic Reports: Home prices continued to increase in February, reaching the highest annual gain since April 2006, as demand continues to clash with historically low supply. These factors have created increased affordability challenges, especially as mortgage rates also begin to rise.CoreLogic analysis also shows homebuyers have steadily moved away from densely populated, high-cost coastal areas in favor of more affordable suburban locales. The number of homebuyers in the top 10 metros with the largest net out-migration – including West Coast metros like Los Angeles, San Francisco and San Jose – who chose to move to another metro increased by 3 percentage points in 2020 to 21% from 2019. This sentiment is reflected in CoreLogic’s recent consumer survey, which found that 57% of current non-homeowners on the West Coast feel the home options in their area are not at all affordable.”Homebuyers are experiencing the most competitive housing market we’ve seen since the Great Recession,” “Rising mortgage rates and severe supply constraints are pushing already-overheated home prices out of reach for some prospective buyers, especially in more expensive metro areas. As affordability challenges persist, we may see more potential homebuyers priced out of the market and a possible slowing of price growth on the horizon.” … Nationally, home prices increased 10.4% in February 2021, compared with February 2020. On a month-over-month basis, home prices increased by 1.2% compared to January 2021.
Hotels: Occupancy Rate Down 16% Compared to Same Week in 2019 – Note: The year-over-year occupancy comparisons are easy, since occupancy declined sharply at the onset of the pandemic. However, occupancy is still down significantly from normal levels. The occupancy rate is down 16% compared to the same week in 2019.From CoStar: STR: US Hotel Occupancy Flat From Prior Week U.S. hotel occupancy remained flat from the previous week, while the country’s ADR and RevPAR levels were its highest since the beginning of March 2020, according to STR’s latest weekly data through April 3, 2021. March 28 through April 3, 2021:
Occupancy: 57.9%
Average daily rate (ADR): US$112.76
Revenue per available room (RevPAR): US$65.33
The occupancy level was 1 point below the pandemic peak reached two weeks prior. The RevPAR value represented 73.1% of the comparable 2019 level, which is the closest the U.S. has come to RevPAR recovery territory in STR’s Market Recovery Monitor. 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). Occupancy has increased to 2009 levels – and 2009 was horrible for hotels.
U.S. consumer credit surges by the most since late 2017 – U.S. consumer borrowing surged in February by the most since late 2017 as a broader reopening of the economy from pandemic restrictions helped spark an increase in credit card balances. Total credit jumped $27.6 billion from the prior month, the largest gain since November 2017, after a revised $94 million January gain, Federal Reserve figures showed Wednesday. On an annualized basis, borrowing rose 7.9% in February. The gain in February credit exceeded all estimates in a Bloomberg survey of economists. Revolving credit climbed $8.1 billion, the most since December 2019 and only the second advance in a year. Nonrevolving credit, which includes auto and school loans, rose $19.5 billion, the biggest increase since June. Lending by the federal government, which is mainly for student loans, increased $5.7 billion before seasonal adjustment. The overall improvement in borrowing highlights a consumer that is growing more confident as the economy accelerates, job growth picks up and more states lift burdensome restrictions.
Trade deficit rises to record $71.1 billion in February – The U.S. trade deficit rose to its highest monthly level on record in February, hitting $71.1 billion, a 4.8 percent from the previous record set in January. While trade activity was generally lower than in the previous month, the level of exports fell nearly three times as much as the level of imports.The figures for 2021 thus far are a whopping 68.6 percent higher than the first two months of last year, before the pandemic took hold. In some regards, the deficit is a sign of the relative strength of the U.S. economy, where strong fiscal stimulus has boosted demand for goods and services above levels seen overseas.The data represent a bitter legacy for former President Donald Trump, who railed against the trade deficit in his 2016 campaign for the presidency, and started a slew of trade wars to renegotiate the terms of trade between America and its trading partners.Biden’s trade representative Katherine Tai has signaled that she will keep many of the tariffs in place until negotiated settlements can be reached with trade partners, though the administration has already de-escalatedtensions and suspended some barriers with Europe and the United Kingdom.Economists say that trade deficits are not inherently bad for the economy, but can be a sign of global imbalances or stalling economic productivity. They have also become a political talking point in recent years, which could raise pressure on the Biden administration to enact policies that would rein in the trade deficit.
Trade Deficit Increased to $71.1 Billion in February – From the Department of Commerce reported:The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $71.1 billion in February, up $3.3 billion from $67.8 billion in January, revised.February exports were $187.3 billion, $5.0 billion less than January exports. February imports were $258.3 billion, $1.7 billion less than January imports. Both exports and imports decreased in February.Exports are down 10.0% compared to February 2020; imports are up 5.0% compared to February 2020. Both imports and exports decreased sharply due to COVID-19, and have now bounced back (imports much more than exports), The second graph shows the U.S. trade deficit, with and without petroleum.The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.Note that net, imports and exports of petroleum products are close to zero.The trade deficit with China increased to $24.6 billion in February, from $16.0 billion in February 2020.
America’s Imports Are Stuck on Ships Floating Just Off Los Angeles – WSJ — The giant container ship that blocked the Suez Canal for six days was freed Monday, but another bottleneck in the supply chain remains, this one in Southern California.On Monday morning, 24 container ships – with a combined maximum carrying capacity nearly 10 times that of the newly freed ship – were anchored off the coast waiting for space at the ports of Los Angeles and Long Beach, according to the Marine Exchange of Southern California, which keeps tabs on vessels and directs ship traffic.The ships are carrying tens of thousands of boxes holding millions of dollars’ worth of washing machines, medical equipment, consumer electronics and other of the goods that make up global ocean trade, all of it idling in the waters in sight of docks that are jammed with still more containers.One was on its 12th day of waiting in the seemingly unending queue. And the vessels keep coming.Backups started building late last year as retailers and manufacturers tried to rebuild inventories that were depleted in the early months of the coronavirus pandemic.A stark difference can be seen comparing the movements of container ships around the ports in February of 2020 with February 2021, according to location data from shipping tracker Marine Traffic. In February 2020 there is steady access to the docks with ships rarely anchoring offshore: The two ports together handle more than a third of U.S. container imports, and delays there are part of a global supply-chain mess that continues even after the ships are unloaded. In January, more than a quarter of imported containers at those gateways had to wait more than five days for handling once they reached the dock, according to the Pacific Merchant Shipping Association. In June 2020, before the logjam, about 2% had to wait that long. U.S. imports from international trading partners picked up as coronavirus restrictions eased and demand rebounded in the summer of 2020. The U.S. imported a record $219.86 billion in goods in January of this year on a seasonally adjusted basis, about 9% higher than a year earlier.The number of container ships at a berth loading or discharging containers fluctuated between roughly 10 and 20 throughout 2019 and into 2020, which is normal, according to Capt. Louttit. It fluctuated between roughly 20 and 30 from late 2020 into March of this year. “The ports are setting records moving cargo,” he said.The sudden uptick in shipments last year after a lull in the spring and summer “shocked and choked the goods movement system,” Capt. Louttit said. The extra ships arrived when the system was operating at reduced capacity and efficiency, a bottleneck partly due to transportation and logistics personnel being off the job because of Covid-19 infections and exposure, he said.The ports of Los Angeles and Long Beach continue to work through the backlog as the number of ships arriving continues to rise. In February of this year, 177 container ships and more than 800,000 containers (in 20-foot equivalent units, or TEUs) arrived at the ports. That’s 31% more ships and 49% more containers than the same month last year.
AAR: March Rail Carloads up 4.1% YoY, Intermodal Up 24.0% YoY – From the Association of American Railroads (AAR) Rail Time Indicators. When the pandemic first began around mid-March 2020, firms across the country and across industries shut down or drastically reduced operations, leading to sharply lower volumes for many rail traffic categories. A year later, rail traffic has rebounded, leading to year-over-year volume percentage gains that in some cases reflect easier comparisons more than underlying market factors.March’s rail traffic numbers are impacted by the easier comparisons. Total U.S. carloads were up 4.1% in March 2021 over March 2020, their first year-over-year monthly gain since January 2019. Total carloads in the last two weeks of March were up 7.3% over the comparable weeks of 2020.For intermodal, U.S. volume in March 2021 was up 24.0% over March 2020. That’s the biggest monthly gain ever for intermodal; it includes a 28% increase in the last two weeks of March. March’s intermodal gains are not solely a function of easy comparisons, though: March 2021 was the highest volume March ever for intermodal and the sixth-best intermodal month overal This graph from the Rail Time Indicators report shows the six week average of U.S. Carloads in 2019, 2020 and 2021: Total carloads averaged 231,232 in March 2021. That’s a higher weekly average than March 2020, but otherwise it’s the lowest weekly average for any March since 1988, when our data begin. For the first three months of 2021, total U.S. rail carloads were 2.6% (77,267 carloads) lower than they were in the first three months of 2020.The second graph shows the six week average of U.S. intermodal in 2019, 2020 and 2021: (using intermodal or shipping containers): U.S. intermodal originations totaled 1.43 million in March 2021, up 24.0%, or 276,781 containers and trailers, over March 2020 and up 8.0% over March 2019. March 2021 marks the eighth-straight year-over-year gain for intermodal following 18 straight declines.Note that rail traffic was weak prior to the pandemic, however intermodal has come back strong.
ISM Services Index increased to “all-time high of 63.7%” in March The March ISM Services index was at 55.3%, up from 55.3% last month. The employment index increased to 57.2%, from 52.7%. Note: Above 50 indicates expansion, below 50 contraction. From the Institute for Supply Management: March 2021 Services ISM Report On Business The Services PMI registered an all-time high of 63.7 percent, 8.4 percentage points higher than the February reading of 55.3 percent. The previous high was in October 2018, when the Services PMI registered 60.9 percent. The March reading indicates the 10th straight month of growth for the services sector, which has expanded for all but two of the last 134 months.”Nieves continues, “For further historical context, the Services PMI debuted as the Non-Manufacturing NMI in 2008, although subindex data was collected for years in advance. In August 1997, the four subindexes – Business Activity, New Orders, Employment and Supplier Deliveries – that make up the Services PMI would have calculated a composite-index reading of 62 percent.”The Supplier Deliveries Index registered 61 percent, up 0.2 percentage point from February’s reading of 60.8 percent. (Supplier Deliveries is the only ISM Report On Business index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.) “The Prices Index figure of 74 percent is 2.2 percentage points higher than the February reading of 71.8 percent, indicating that prices increased in March, and at a faster rate. According to the Services PMI, all 18 services industries reported growth. The composite index indicated growth for the 10th consecutive month after a two-month contraction in April and May. There was a substantial increase in the rate of growth in the services sector in March. Respondents’ comments indicate that the lifting of coronavirus (COVID-19) pandemic-related restrictions has released pent-up demand for many of their respective companies’ services. Production-capacity constraints, material shortages, weather and challenges in logistics and human resources continue to cause supply chain disruption,” says Nieves. The employment index increased to 57.2% from 52.7% in February.
March Markit Services PMI: “Fastest rise in business activity since July 2014 as new order growth reaches six-year high” The March US Services Purchasing Managers’ Index conducted by Markit came in at 59.7 percent, down 0.1 from the final February estimate of 59.8.Here is the opening from the latest press release:Commenting on the latest survey results, Chris Williamson, Chief Business Economist at IHS Markit, said:“The recent surge in service sector growth shows no sign of abating, with another impressive performance in March rounding off a quarter in which the PMI surveys indicate that the economy grew at an annualized rate of approximately 5%.“While consumer demand is rising especially strongly for goods, the surveys are now also showing rising activity in the consumer services sector, linked to the vaccine roll-out, looser virus containment measures and the fresh injection of stimulus in March. Financial services growth is also booming, in part reflecting buoyant housing and equity markets, and business spending on services is likewise picking up as firms look ahead to better times, resulting in a very broad-based and powerful looking upturn in the economy.“High levels of new business inflows, rising business confidence and an increasing appetite to hire new staff suggest the economy will also see a strong second quarter, especially if the vaccine roll-out continues apace“The biggest concern is inflation, with price gauges hitting new survey highs in March as demand often exceeded supply for a wide variety of goods and services.” [Press Release]Here is a snapshot of the series since mid-2012.
U.S. factories desperate for workers, even as ranks of jobless remains high (Reuters) – . U.S. manufacturers have long grumbled about labor shortages, but the past year has proven particularly frustrating. As the pandemic pushed millions out of work, most from service industries such as hotels and restaurants, many factories were pushed into overdrive by surging demand for everything from pickup trucks to plastic bags. And yet high jobless rates have not translated into workers flocking to open positions on assembly lines. On Friday, the Labor Department said 916,000 jobs were created last month, the most since last August, including 53,000 manufacturing positions. That was the highest number of new factory jobs in six months. The report’s manufacturing diffusion index, a measure of the breadth of hiring across some 75 goods-producing industries, registered one of its highest readings ever. Manufacturing employment suffered a much less severe blow than service sector jobs last spring when COVID-19 first brought the economy effectively to a standstill. About one of every 10 factory jobs were eliminated in the shutdowns versus roughly one of every six service jobs. Factory employment is 4% below pre-pandemic levels, a deficit of 515,000 jobs, versus 5.5% for overall U.S. employment, with a total shortfall from February 2020 of 8.4 million positions. Other indicators also point to a tight labor market at factories. Earlier this week, the Institute for Supply Management said its index for national factory activity jumped to its highest reading in 37 years in March, with its gauge of manufacturing employment rising to its highest level since February 2018. One fabricated metal company quoted in the report said, “A lack of qualified machine and fabrication shop talent” has made it hard to keep up with demand.
Weekly Initial Unemployment Claims increased to 744,000 –The DOL reported:In the week ending April 3, the advance figure for seasonally adjusted initial claims was 744,000, an increase of 16,000 from the previous week’s revised level. The previous week’s level was revised up by 9,000 from 719,000 to 728,000. The 4-week moving average was 723,750, an increase of 2,500 from the previous week’s revised average. The previous week’s average was revised up by 2,250 from 719,000 to 721,250. This does not include the 151,752 initial claims for Pandemic Unemployment Assistance (PUA) that was down from 237,065 the previous week.The following graph shows the 4-week moving average of weekly claims since 1971.The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 723,750.The previous week was revised up.Regular state continued claims decreased to 4,067,784 (SA) from 4,200,238 (SA) the previous week.Note: There are an additional 7,553,628 receiving Pandemic Unemployment Assistance (PUA) that increased from 7,350,339 the previous week (there are questions about these numbers). This is a special program for business owners, self-employed, independent contractors or gig workers not receiving other unemployment insurance. And an additional 5,633,595 receiving Pandemic Emergency Unemployment Compensation (PEUC) up from 5,516,487.Weekly claims were higher than the consensus forecast.
BLS: Job Openings Increased to 7.4 Million in February –From the BLS: Job Openings and Labor Turnover Summary: The number of job openings edged up to 7.4 million on the last business day of February, the U.S. Bureau of Labor Statistics reported today. Hires also edged up to 5.7 million while total separations were little changed at 5.5 million. Within separations, the quits rate and layoffs and discharges rate were unchanged at 2.3 percent and 1.2 percent, respectively. The following graph shows job openings (yellow line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS. This series started in December 2000. Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. This report is for February, the most recent employment report was for March. Note that hires (dark blue) and total separations (red and light blue columns stacked) are usually pretty close each month. This is a measure of labor market turnover. When the blue line is above the two stacked columns, the economy is adding net jobs – when it is below the columns, the economy is losing jobs. The huge spikes in layoffs and discharges in March and April 2020 are labeled, but off the chart to better show the usual data. Jobs openings increased in February to 7.367 million from 7.099 million in January. This is close to the series maximum of 7.574 million. The number of job openings (yellow) were up 5.1% year-over-year. Note that job openings were declining a year ago prior to the pandemic. Quits were down 2.1% year-over-year. These are voluntary separations. (see light blue columns at bottom of graph for trend for “quits”).
Job openings and hires ticked up in February – EPI Blog by Elise Gould – Today’s Job Openings and Labor Turnover Survey (JOLTS) reports a promising pickup in both job openings and hires in February 2021, a sign that the recovery is finally moving ahead. The increase in hires was notable in accommodation and food services, but decreases in state and local government education are particularly troubling (though we know from March jobs data that state and local government hiring began to pick up in March). Overall, hires remain below its level before the recession hit, but job openings have now edged above its pre-recession levels. Once public health experts indicate it is safe to reopen and the American Rescue Plan (which was passed after today’s JOLTS data were collected) takes effect, I’m confident those openings will grow and translate into hires. Layoffs have held steady over the last couple of months. One of the most striking indicators from today’s report from the Bureau of Labor Statistics (BLS) is the job seekers ratio – the ratio of unemployed workers (averaged for mid-February and mid-March) to job openings (at the end of February). On average, there were 9.8 million unemployed workers compared with only 7.4 million job openings. This translates into a job seekers ratio of about 1.3 unemployed workers to every job opening. Put another way, for every 13 workers who were officially counted as unemployed, there were only available jobs for 10 of them. That means, no matter what they did, there were no jobs for 2.5 million unemployed workers.As with job losses, workers in certain industries are facing a steeper uphill battle. In the construction industry as well as arts, entertainment, and recreation, there were more than three unemployed workers per job opening. In educational services, accommodation and food services, other services, and transportation and utilities, there were more than two unemployed workers per job opening. As bad as these numbers are, they miss the fact that many more weren’t counted among the unemployed: The economic pain remains widespread with 23.6 million workers hurt by the coronavirus downturn. On the whole, the U.S. economy is seeing a significantly slower hiring pace than we experienced in May or June. While the pickup in job openings is a promising sign, hiring in February was below where it was before the recession. There was an increase in jobs in the mid-March employment report, but we still have a long way to go before recovering the large job shortfall – 11.0 million when using a reasonable counterfactual of job growth if the recession hadn’t occurred – that remains.
40,000 baseball fans crowd Texas stadium –A near-capacity crowd of 38,238 fans in Arlington, Texas, attended the first home game for the Texas Rangers baseball team Monday afternoon, making it the largest official attendance at a stadium event in the US during the COVID-19 pandemic. In February in Florida the Daytona 500 car race took place before a crowd of just over 30,000, and the Super Bowl was played before 24,835 fans, including 7,500 vaccinated health care workers, in Tampa’s Raymond James Stadium. At those events, the attendance was about one-third of stadium capacity, in contrast to Monday’s attendance at Globe Life Field, where the Rangers played the Toronto Blue Jay in a stadium at 99 percent capacity. The Texas Rangers had announced plans to fill their stadium to capacity after Texas Governor Greg Abbott ended restrictions on all business operations as well as all mask mandates on March 2. “We’re very confident we won’t be a super-spreader event,” said Ranger’s CEO Neil Leibman, shortly after Abbott lifted COVID-19 protections. “With all the protocols that we’re following, we’ll be extremely responsible and provide a very comfortable environment for somebody to enjoy the game without worrying we’re going to be a spreader event,” Leibman said. “We will require all those who enter Globe Life Field to wear a mask or face covering, and are working with Major League Baseball on some additional protocols required for player health and safety.” Fans were told to wear masks unless eating or drinking. Inside the stadium, signs reading “wear your masks” were plastered on various walls and occasional reminders to keep masks on and social distance rang out over a loudspeaker. These “rules,” however, were universally ignored by those in attendance. Although many fans entered with masks, once they took their seats and the game began, most took off their masks and kept them off. Season ticket holder Randall Henley told the Dallas Morning New s that he was “just amazed at the number of people who aren’t wearing masks. Henley said there was little policing throughout the game and the usher in his section was “non-existent.” He said “he didn’t hear a single person tell others to put on a mask.”
Carnival: “We May Have No Choice” But To Move Cruise Ships Outside US To Resume Operations –Following last month’s CDC announcement that its new “conditional sailing order” barred cruise ships from departing the US, or sailing through its waters through Nov. 1, Carnival Cruise Line released a press release around 1400 ET Tuesday, saying it may have no other choice but to move its cruise ships outside US homeports to resume operations. Christine Duffy, president of Carnival Cruise Line, said: “While we have not made plans to move Carnival Cruise Line ships outside of our US homeports, we may have no choice but to do so in order to resume our operations which have been on ‘pause’ for over a year. We appreciate the continued patience and support from our loyal guests, travel advisors and business partners as we work on a return-to-service solution.”Duffy continued: “We know that this is very disappointing to our guests who continue to be eager to sail, and we remain committed to working with the Administration and the CDC to find a workable solution that best serves the interest of public health. We are asking that the cruise industry be treated on par with the approach being taken with other travel and tourism sectors, as well as US society at large.” Carnival shares popped and dropped on the news.
Norwegian Cruise Line to resume sailing with vaccinated passengers –Norwegian Cruise Line announced Tuesday that it would resume sailing in July, with all passengers required to be vaccinated and tested for COVID-19 before boarding. “Over a year after we initially suspended sailings, the time has finally come when we can provide our loyal guests with the news of our great cruise comeback,” Norwegian Cruise Line CEO Harry Sommer said in a statement. “We have been working diligently towards our resumption of operations, focusing on the guest experience with health and safety at the forefront. The growing availability of the COVID-19 vaccine has been a game changer. The vaccine, combined with our science-backed health and safety protocols, will help us provide our guests with what we believe will be the healthiest and safest vacation at sea,” Sommer said. “All sailing aboard cruises with embarkation dates through Oct. 31, 2021 will be required to be fully vaccinated and tested prior to boarding our ships,” he said. Three Norwegian ships will operate at reduced capacity for voyages around the Greek isles and Caribbean, the company said, with the first cruise set to leave port on July 25. The July voyage will embark from Athens, Greece, while Caribbean cruises will launch from Montego Bay, Jamaica, on Aug. 7 and Punta Cana, Dominican Republic, on Aug 15. Norwegian’s announcement comes as the U.S. vaccination rollout has resulted in more than one-third of all U.S. adults receiving at least one dose of the vaccine. A Friday statement from the Centers for Disease Control and Prevention regarding commercial cruises launching from U.S. ports offered no timeline for the resumption of operations.
Homelessness crisis rises across the US Midwest — The U.S. Department of Housing and Urban Development (HUD) released its 2020 Annual Homeless Assessment Report (AHAR) on March 18. Also called the Point-in-Time (PIT) report, the AHAR graphs changes in the numbers of sheltered and unsheltered homeless people from year to year. The PIT report concluded that nationally, homelessness had increased even before the economic impact of the pandemic. 580,466 people were homeless on a single night in January 2020 – an increase of 2.2 percent from 2019. Homelessness has increased for the previous four years. The economic effects of the COVID-19 pandemic have already resulted in a sharp increase in homelessness in the Midwest. A larger crisis looms when the federal eviction moratorium, extended again on March 29 through June 30, is allowed to expire. The federal eviction moratorium has never included rent forgiveness for tenants, meaning that thousands of dollars of debt are accumulating that cannot be repaid. The Centers for Disease Control and Prevention (CDC) recommends that homeless encampments not be razed to help contain coronavirus spread. Nonetheless, homeless encampments have been subject to being cleared out by municipalities, spreading the COVID-19 pandemic as individuals are forced to seek out new shelter. These efforts to clear out homeless encampments also involve police violence. A March 18 clearing out of a homeless encampment in Minneapolis, Minnesota, was denounced by the public for recorded brutality on the part of the Minneapolis Police Department. A video of the incident shows an officer kneeling on a protester’s neck or back. The city is currently the site of the trial of Derek Chauvin, the police officer who knelt on George Floyd’s neck for nine minutes in May 2020 and sparked protests by tens of millions of people across the globe. Minnesota is estimated to have 20,000 homeless people on any given night. The Minnesota legislature has begun to discuss ways to lift the state’s eviction moratorium. Approximately 100,000 Minnesota households are behind on rent, owing a combined total of $200 million. Even if the legislature does not remove the restriction on evictions tenants are at risk. The state is one of seven that does not require landlords to give written notice before filing an eviction lawsuit. Once a lawsuit is filed, tenants can be kicked out for failure to pay rent in only nine days. More than 600 people have lost their housing to eviction lawsuits during the state moratorium.
New York to give up to $15,600 to undocumented migrants hit by Covid — New York will offer payments of up to $15,600 to undocumented immigrants affected by the pandemic, in a sweeping move which could benefit nearly 300,000 people in the state. The state dedicated a total of $2.1bn to an Excluded Worker Fund, which will make one-time payments to undocumented people who lost work during the coronavirus outbreak, which shut down New York City last spring.The measure passed in the New York legislature this week, as part of a larger $212bn budget aimed to jump-start the state’s economy.Undocumented workers are eligible to receive $15,600 if they can prove they are New York state residents who are ineligible for unemployment benefits due to their immigration status, and lost income due to the pandemic.Other undocumented immigrants who are unable to meet the same level of verification will be eligible for $3,200 – the amount of federal assistance payments many Americans have already received, but which undocumented immigrants have been unable to claim.The Fiscal Policy Institute, a New York-based policy group, estimated that 290,000 workers will benefit from the Excluded Worker Fund, including 213,000 in New York City. About 92,000 workers in New York state will be eligible for the full $15,600 payment. About 725,000 undocumented immigrants live in New York state, according to the Pew Research Center.Immigrant-rights groups had pushed for relief payments, and a group of undocumented immigrants spent the last three weeks on hunger strike to push for support from the state. “There have been 23 days without food. Twenty-three days when I was hungry and in pain. But it hasn’t just been 23 days. It’s actually been decades of pain, the pain of indifference and negligence,” Ana Ramirez, an undocumented worker and a member of the New York Communities for Change group, told AMNY on Wednesday. Last year, California introduced a similar relief program, but on a much smaller scale. The state contributed $75m to a cash assistance program which offered undocumented immigrants between $500 to $1000, on a first come, first served basis.
Report highlights the disastrous impact of the pandemic on public education in California A report published last month by the Learning Policy Institute (LPI) titled, “California Teachers and COVID-19: How the Pandemic Is Impacting the Teacher Workforce,” highlights the acute crisis of K – 12 public education in California, the most populous state in the US.The study examines the deepening shortage of teaching staff, primarily due to difficulties recruiting and retaining teachers in areas of high poverty, as well as the problems of teacher burnout, excess workloads and early retirements, all of which have been severely exacerbated by the pandemic.While the study focuses on California, the crisis is universal and is affecting tens of millions of educators worldwide. State data from Michigan shows that from August 2020 through February 2021 there was a 44 percent increase in midyear retirements compared with the same period in 2019 – 2020, while a separate study by Horace Mann Educators Corporation found that 27 percent of US teachers are considering quitting due to the pandemic, with similar figures found in countries throughout the world.In the fall of 2020, LPI interviewed superintendents and human resources administrators of 17 school districts across California, including eight of the 11 largest districts which educate nearly one in six students in the state, as well as nine smaller rural districts. Among the large districts surveyed were Los Angeles, San Diego, Long Beach, Elk Grove and San Francisco.The report is limited by the fact that the authors only interviewed administrators and not teachers directly. Nevertheless, the report reflects the horrendous stress teachers are under due to the difficulties of remote learning and tremendous fear over in-person teaching in unsafe classrooms, while many juggle having to care for their own children at home.The report highlights the stresses that teachers have been subject to, as they struggle to adapt to the remote learning systems and having to engage students, who themselves are often under acute stress. With many districts having moved to the unsafe “hybrid” model, in which teachers simultaneously teach in-person and online, teachers need to implement two lesson plans, thus doubling their workload. They are increasingly compelled to act as untrained counselors to handle the emotional needs of students and provide technical support to students who may have spotty internet under a communications infrastructure that is unprepared to provide a high quality learning experience. One district leader explained how the shift to distance learning impacted veteran teachers, who typically rely on a body of lessons and materials designed for in-person learning amassed over their years of experience, stating, “The distance learning platform makes it everyone’s first year of teaching all over again.”
As pandemic surges, New York City mayor makes it harder to close schools with COVID-19 outbreaks — Even though the US has now entered its fourth surge of the COVID-19 pandemic, driven primarily by the uncontrolled spread of more infectious and lethal variants in schools, the drive to reopen schools and keep them open continues apace. On Thursday, New York City’s Democratic Mayor Bill de Blasio unilaterally changed Department of Education (DOE) rules, making it more difficult to temporarily close schools when there are COVID-19 outbreaks. Until now, schools had to close for 10 days whenever two cases were detected in the same building within a seven-day period, but starting Monday the threshold will be raised to four cases. Further, the four infections must be determined to have originated inside the school, which is all but impossible given the totally inadequate contact tracing in the city. Significantly, whole schools will no longer close for 24 hours when outbreaks occur, with only individual classrooms closing temporarily. These changes were made one day before the latest deadline for families to opt-in for in-person learning and are part of a transparent effort to pack the schools as much as possible and keep them open regardless of the spread of the virus. The latest opt-in period was itself announced on March 24, just after the Centers for Disease Control and Prevention (CDC) unscientifically reduced distancing recommendations between students from six feet to three feet. To date, the vast majority of New York City families have chosen to keep their children learning safely from home, with roughly 700,000 out of the district’s 1.1 million students learning remotely. Since schools first reopened last September, 10,717 students and 10,618 staff have officially tested positive, with only 20 percent of the district’s students and staff tested weekly. Only 44 percent of DOE employees have been vaccinated, with 82,000 employees totally unprotected from the deadly virus. In-person learning has been chaotic, with 13,612 classroom closures and 2,373 extended building closures since last September, as schools often announce closures hours before the school day is to begin. The easing of school closure rules is being combined with a propaganda campaign claiming that schools are safe, in order to entice families to send their children back.
Gov. Whitmer Asks Michigan High Schools To Close For 2 Weeks As COVID Transmission Rate Soars –Michigan has claimed the mantle of America’s COVID epicenter this week as it officially has the highest transmission rate in the US, driven in part by a slower-than-average vaccination campaign and the growing prevalence of mutant strains. And on Friday, Democratic Gov. Gretchen Whitmer asked the federal government to send more vaccines, and ordered high schools in the state to return to remote-only education for two weeks. Youth sports will also be asked to take a break, and diners have been asked to avoid eating in restaurants. All four of these requests are voluntary and don’t carry the weight of official mandates from her administration. Watch this morning’s press conference below.Whitmer said a temporary pause would go “a long way” to stop the spread of the virus and save lives. “Right now our numbers are alarming, and we all have a role to play to get our state moving in the right direction again,” Whitmer said.
Los Angeles Families Reluctant to Return Kids to School –The exact figures may change slightly over the next few weeks, but for the most part, parents and students in the massive Los Angeles Unified School District have had their say. In overwhelming numbers, it appears, they’re not going back to the classroom this school year.It’s not for a lack of effort on the part of the LAUSD, the nation’s second-largest school district with more than 600,000 students. Quite the opposite: After spending many months describing why it wasn’t safe for students to return to class, district administrators have launched a recent media blitz aimed at convincing families it’s OK to send their children back to campus – an effort that includes detailed explanations of the mitigation and sanitizing measures in place at every school.But the reluctance is real. It is borne out by LAUSD’s own survey data, which indicates that as of April 1, only about 38% of elementary school children will return to campuses when they reopen in mid-April. Among middle schoolers, the figure drops to 25%, and among high school students it plummets to 16%. Because those survey figures assume that any nonresponding family is going to remain in distance learning, there’s some wiggle room in the numbers. But that is basically the reality facing the district. This deep into the school year, with the COVID-19 pandemic still very present, the vast majority of families are choosing to ride it out at home and perhaps hope for a less disruptive choice when classes resume next fall.In L.A.’s hard hit lower income neighborhoods, COVID infection rates remain higher than average, and vaccination outreach in those communities continues to lag. LAUSD Superintendent Austin Beutner said last week that vaccination rates for those age 18 and older in the city are as high as 40% in some neighborhoods, but as low as 10% in others, and “Unfortunately, many of the communities served by schools in Los Angeles Unified are at the lower levels.” It is estimated that about 80% of the district’s students come from low income households. “We hear directly from families what their concern is. It’s not the relative safety of schools,” Beutner said in a video update posted to the district’s website. “They know in Los Angeles we’ve created the safest possible school environment.” Rather, the superintendent said, many families are worried that their children will catch the virus from others who show up on campus, then bring it home. For some families, that could mean the risk of infecting adults who absolutely cannot afford to stop working if they get sick.
In-person classes canceled in Toronto amid uptick in variant cases – Canadian health authorities announced on Wednesday that Toronto, the highest populated city in the country, would be cancelling in-person learning for students in elementary and secondary school as it deals with another wave of coronavirus cases. As Reuters reports, Canada’s largest school district will be moving its 247,000 students to remote learning until April 18. “Schools should be the first places in our community to open, and the last to close,” Toronto Public Health said in a statement. “Unfortunately, current circumstances require that difficult decisions must be taken locally to protect all those in our school communities.” Canada has averaged around 5,200 new COVID-19 cases per day this past week, Reuters notes, with younger Canadians being more affected in the latest surge, which has seen an increasing demand for artificial lungs as well as staffing struggles in hospitals. “Around the world, countries are facing a very serious third wave of this pandemic,” Canadian Prime Minister Justin Trudeau told reporters in Ottawa. “And right now, so is Canada.” Last Thursday, Ontario, which includes Toronto, announced a new round of shutdown measures that would stay in effect for 28 days, though it fell short of issuing a stay-at-home order. Canada has recorded more than 1 million coronavirus cases so far and more than 23,000 related deaths. Ontario currently has a coronavirus case rate of 2,495 per 100,000 people, a lower rate than several other Canadian provinces such as Quebec and Alberta. In terms of overall total cases, Ontario ranks the worst with 367,602 confirmed.
COVID-19 outbreaks skyrocket at US colleges and universities as new variants emerge on campuses -As the US death toll approaches 600,000, universities and colleges across the country are reemerging as hotspots of COVID-19 outbreaks. The spike in cases is a direct result of thousands of students returning to campuses after spring break, despite the critical lessons from the disastrous fall semester reopenings. Four months into the arrival of the COVID-19 vaccine, universities are still far from having vaccinated all current students, contrary to what many had promised. To further exacerbate the situation, in addition to numerous spikes in coronavirus cases, colleges are now reporting cases of the new COVID-19 variant found on their campuses. Since the start of this year, it is estimated that more than 120,000 cases are linked to colleges and universities and 530,000 since the start of the pandemic. A data-driven study on 30 large universities revealed that a spike in campus infection rates preceded a peak in the surrounding counties by less than 14 days, implying that universities had become COVID-19 superspreader sites. A survey by the New York Times shows that at least 18 colleges have reported more than 1,000 cases in 2021 alone. At least 15 college institutions detected new COVID variants. Readers should note that not all testing conducted at college campuses are capable of detecting and differentiating between the variants, so it is expected that the actual numbers are higher. The reopening drive can be seen across the country, including Republican- and Democratic-controlled states. Infections are rising at college campuses, with those in Florida and Arizona reporting among the worst numbers of outbreaks. Adding fuel to the fire, over the past month mask mandates have been lifted in at least six states, including Texas, totaling some 37 million people.In Florida, where Governor Ron DeSantis issued an order to nullify all public health measures imposed by local governments, cases have skyrocketed with a total of 2,077,032 infections since the start of the pandemic and 6,017 cases on April 2.The University of Florida in Gainesville has observed the highest case number for 2021, with 2,138 confirmed cases between January and March and a total of 8,894 since the start of the pandemic. According to the university’s testing dashboard, there were more than 130 confirmed cases on campus over the past five days. The second highest case count at a university is Arizona State University ,which had 1,822 cases for 2021 and 6,327 since the start of the pandemic.
Biden Excludes Student Loan Forgiveness From Budget Proposal, But Calls For More Funding For Higher Ed: Key Details –The White House today released an outline of President Biden’s budget proposal for fiscal year 2022. The $1.5 trillion spending proposal includes sweeping increases in domestic spending initiatives including more funding for education, border security, and combatting climate change. The proposal includes an overall 16% increase in domestic spending.Biden’s budget proposal specifically increases funding for higher education, with $102.8 billion allocated to the Department of Education, a $29.8 billion or 41 percent increase over the 2021. The increased funding for higher education will include $3 billion in Pell Grants and expanded eligibility for Dreamers, as well as an increase to the Pell Grant award limit.The proposal also includes increases in funding for Historically Black Colleges and Universities, Tribally Controlled Colleges and Universities and other Minority-Serving Institutions. And it proposes a $100 million increase in funding for programs that aim to increase participation in science and engineering of individuals from racial and ethnic groups.But not included in the President’s budget proposal is broad student loan forgiveness. Biden has publicly supported the idea of widespread student loan forgiveness, and he has repeatedly emphasized his preference that Congress enact student debt cancellation through legislation. White House Press Secretary Jen Psaki recently reiterated earlier this week that if Congress would pass a student loan forgiveness bill, Biden would gladly sign it. So why did Biden exclude student loan forgiveness from the budget proposal?Despite his ongoing stated support, Biden also did not include student loan forgiveness in the American Rescue Plan (the recent stimulus package he signed into law). The administration had suggested then that the White House preferred that student loan forgiveness be part of separate student loan reform legislation. That may also be why Biden excluded student loan forgiveness in the budget proposal, as well.
S.Korea orders closure of nightclubs, karaoke bars amid concern over 4th COVID-19 wave (Reuters) – South Korea will reimpose a ban on nightclubs, karaoke bars and other nightly entertainment facilities, authorities said on Friday, after the number of new coronavirus cases surged, fanning fears over a potential fourth wave of outbreaks. Prime Minister Chung Sye-kyun announced the curbs, which take effect on Monday for three weeks, after daily new case counts climbed to a three-month high in recent days. The current 10 p.m. dining curfew and ban on gatherings of more than four people will be maintained, he said. “Signs of a fourth wave of epidemics that we had so striven to head off are drawing nearer and becoming stronger,” Chung told a daily meeting on the pandemic. “We will maintain the current distancing level, but actively reinforce various specific measures depending on the situation.” The Korea Disease Control and Prevention Agency (KDCA) reported 671 new cases for Thursday, a day after the daily tally hit the highest level since early January, with clusters developing from churches, bars and gyms, mostly in the greater Seoul area.
Why India is Banking on Health Diplomacy to Grow African Footprint – India has stepped up its global ambitions and foreign policy re-engagement with African countries in recent years. Its bilateral trade increased from $7.2 billion in 2001 to $63 billion in 2017/18. India is now the third largest export destination and the fifth largest investor on the continent. While it plays catch-up with China’s commanding presence in Africa, India has signed numerous new bilateral agreements. It has also strengthened its diplomatic presence and is actively furthering trade, infrastructure and private sector investments. In our research under a multi-year project, we found that New Delhi promotes an alternative model of development. It showcases the successes of its Green Revolution and advances in information, communication and technology. But it also highlights its ability to develop “Triple A” technology – affordable, appropriate, adaptable. India’s expertise in affordable healthcare has assumed increased significance during the ongoing pandemic. New Delhi is already reaping the benefits of an ambitious diplomatic initiative to deliver Made-in-India vaccines to developing countries. India is one the largest producers of drugs globally. It manufactures 60% of the world’s vaccines. Many African countries have purchased or received these as gifts. New Delhi’s capacity and willingness to produce and share COVID-19 vaccines have further boosted the country’s diplomatic heft and recognition as a global power. India’s push for South-South cooperation relies on three broad elements. The first is a shared identity as part of the “Third World”. Second is expertise in cost-effective development technologies. Third is a recurrent articulation of the principles of mutual respect and solidarity.Its long history of being democratic and its successes in reducing poverty and preventing famineshave also bolstered the legitimacy of its developmental approach in the Global South. Since 2018, the India-Africa partnership has been based on a set of principles. These have emphasised “local priorities”. They call for joint efforts to reform global institutions, combat climate change and fight global terrorism. They also highlight capacity building for agriculture, education, digital technology and cooperation on peacekeeping and maritime issues.How and to what extent might Africa benefit from India’s growing interest? We identify three broad sets of health-related opportunities and benefits that may shape the future of India-Africa relations.
Australian richest billionaires double their wealth during COVID-19 crisis – The global coronavirus pandemic has triggered the greatest public health and economic catastrophe since World War II and is being used in every country, including Australia, as the pretext for far deeper attacks on workers’ jobs, wages and conditions. Yet the super-rich have prospered like never before. The Australian last month released The List, a glossy magazine insert glorifying the fact that the wealth of Australia’s richest 250 people has soared on the back of the crisis. The Murdoch publication declared: “[T]he biggest names in Australian business thrived during the pandemic.” Together, the top 250 have a combined wealth of $470 billion, up from $377 billion last year, which was almost double the increase from 2019 to 2020. The cut-off wealth for The List is $450 million, whereas last year it was $402 million. The number of billionaires grew to 122, with an average worth of $1.88 billion. The expansion of their fortunes far exceeds that during the 2008-09 global financial crisis, after which the number of billionaires increased from 30 to 35. The greatest increases in wealth were among those in iron ore mining, cardboard box making, food deliveries and tech companies – all of which have profited from COVID-19. The two richest on the list were iron ore magnates Gina Rinehart and Andrew Forrest, who both more than doubled their wealth in one year, almost totally thanks to soaring prices and exports to China. Rinehart increased her wealth by $20 billion, bringing her estimated fortune to $36.28 billion, up from $16.25 billion last year. Her company, Hancock Prospecting, recorded one of the biggest profits for a private company in Australian corporate history, with a $4 billion net profit for the 2020 financial year – 50 percent more than it made the previous year. Forrest, chair of Fortescue Metals Group, similarly doubled his wealth from $13.6 billion last year to $29.61 billion. There are 28 technology entrepreneurs on the list this year, up from 19 last year, benefitting from soaring share market valuations of the sector as a result of the pandemic. Mike Cannon-Brookes and Andrew Farquhar of software company Atlassian, made third and fourth on the list, respectively. Speculative investors drove up the price of the US Nasdaq-listed shares of Atlassian by nearly 50 percent in 2020.
New Zealand suspends entry for travelers from India due to high COVID-19 cases (Reuters) – New Zealand on Thursday temporarily suspended entry for all travellers from India, including its own citizens, for about two weeks following a high number of positive coronavirus cases arriving from the South Asian country. The move comes after New Zealand recorded 23 new positive coronavirus cases at its border on Thursday, of which 17 were from India. “We are temporarily suspending entry into New Zealand for travellers from India,” Prime Minister Jacinda Ardern said in a news conference in Auckland. India has recorded 12.8 million COVID-19 cases, the most after the United States and Brazil. It is now battling a deadly second wave of infections, and this week the number of daily new cases passed the peak of the first wave seen last September. The suspension will start from 1600 local time on April 11 and will be in place until April 28. During this time the government will look at risk management measures to resume travel.
WHO does not support mandatory ‘vaccine passports’ – The World Health Organization (WHO) does not currently support the use of “vaccine passports” for travel because of concerns of equity, an agency official said Tuesday. Mike Ryan, the executive director of the WHO’s emergencies program, said he’s concerned such a requirement could exacerbate vaccine equity issues. He told reporters that the WHO supports vaccine certificates as a way to provide a health record for people who have been vaccinated, but the issue takes on a different consideration if certificates are used to attend work, school or to travel. Ryan said until more countries have equal access to vaccines, it wouldn’t be ethical to require proof of vaccination for travel. “We already have a huge issue of vaccine equity in the world. The imposition of requirements for certification of vaccination before travel could introduce another layer of such inequity,” Ryan said during a press briefing. “If you don’t have access to vaccine in a country, you become isolated as a country as vaccine passports kick in.” Ryan also noted there are still lingering questions around whether vaccines can prevent the coronavirus from being transmitted. He said agency working groups are continuing to discuss the matter, and the recommendation may be revisited. Ryan’s comments echoed those made by a WHO spokeswoman earlier Tuesday. According to Reuters, WHO spokeswoman Margaret Harris also said the agency does not back vaccine passports for travel. “We as WHO are saying at this stage we would not like to see the vaccination passport as a requirement for entry or exit because we are not certain at this stage that the vaccine prevents transmission,” she said.
Bolsonaro a ‘Threat to the Planet,’ Says Lula as Brazil’s Daily Covid Death Toll Hits All-Time High – Former Brazilian President Luiz Inflcio Lula da Silva on Wednesday called far-right President Jair Bolsonaro a grave “threat to the planet” after the nation’s daily Covid-19 death toll topped 4,000 for the first time since the pandemic began last year, a sign that the public health crisis is worsening as Bolsonaro continues to downplay the virus andundercut potential solutions. At least 4,195 Brazilians died of the coronavirus on Tuesday and nearly 87,000 new infections were reported as the South American country’s treatment facilities were “stretched to breaking point” by the rapidly spreading virus. “It’s a nuclear reactor that has set off a chain reaction and is out of control,” Miguel Nicolelis, a Brazilian doctor and professor at Duke University in the United States, told The Guardian of the worsening Covid-19 crisis in Brazil, which has the second-highest Covid-19 death toll in the world behind the U.S.”It’s a biological Fukushima,” said Nicolelis. With deaths and cases surging, Bolsonaro has persistently refused to consider implementing public safety measures to slow the spread and remained committed to dismissing the severity of the pandemic, which he has previouslycharacterized as a media creation.In an open letter published Wednesday, Lula – who is expected to mount another presidential bid – wrote that “unfortunately, our country is today considered a global threat, due to the uncontrolled circulation of the virus and the emergence of new mutations.””It must be said that this threat to the planet has a name and a surname: Jair Bolsonaro, a president of the republic who systematically denies science and who ignores the suffering of the people he has sworn to defend,” Lula continued.The former president went on to stress the need for equitable and swift global distribution of the coronavirus vaccine, echoing scientists’ warnings that leaving much of the world unprotected dramatically increases the risk of vaccine-resistant mutations emerging and spreading around the world, rendering first-generation vaccines ineffective.”We cannot consider living in a world where part of the planet is vaccinated and part abandoned and isolated to be a free field for mutations of the virus,” Lula wrote. “The epicenter of the pandemic cannot be Europe yesterday, today Brazil, tomorrow Africa, with new variants restarting the cycle of death and sadness around the world.”But “instead of defending immunizations as a public good for humanity,” said Lula, the Bolsonaro government “advocates the private commercialization of vaccines and their concentration in a few companies and countries.”As The Intercept reported Wednesday, Bolsonaro has repeatedly undermined Brazil’s public vaccination system – widely considered one of the best in the world prior to the Covid-19 crisis – and is currently supporting an effort by right-wing lawmakers to “allow corporations to directly purchase vaccine doses from international suppliers and give them to employees, even before priority groups like the elderly and medical workers are fully vaccinated.”
IMF upgrades forecast for 2021 global growth to a record 6% – (AP) – The rollout of COVID-19 vaccines and vast sums of government aid will accelerate global economic growth to a record high this year in a powerful rebound from the pandemic recession, the International Monetary Fund says in its latest forecast. The 190-country lending agency said Tuesday that it expects the world economy to expand 6% in 2021, up from the 5.5% it had forecast in January. It would be the fastest expansion for the global economy in IMF records dating back to 1980. In 2022, the IMF predicts, international economic growth will decelerate to a still strong 4.4%, up from its January forecast of 4.2%. “A way out of this health and economic crisis is increasingly visible,” IMF chief economist Gita Gopinath told reporters. The agency’s economists now estimate that the global economy shrank 3.3% in 2020 after the devastating recession that followed the coronavirus’ eruption across the world early last spring. That is the worst annual figure in the IMF’s database, though not as severe as the 3.5% drop it had estimated three months ago. Without $16 trillion in global government aid that helped sustain companies and consumers during COVID-19 lockdowns, IMF forecasters say, last year’s downturn could have been three times worse. The U.S. economy, the world’s biggest, is now forecast to expand 6.4% in 2021 – its fastest growth since 1984 – and 3.5% in 2022. The U.S. growth is being supported by President Joe Biden’s $1.9 trillion relief package, while an acceleration in the administering of vaccines is beginning to let Americans return to restaurants, bars, shops and airports in larger numbers. The world’s second-largest economy, China, which imposed a draconian COVID-19 clampdown a year ago and got a head start on an economic recovery, will record 8.4% growth this year and 5.6% in 2022, the IMF estimates. The monetary fund expects the 19 countries that share the euro currency to collectively expand 4.4% this year and 3.8% in 2022. Japan is expected to register 3.3% growth this year and 2.5% next year. Gopinath warned that the economic recovery is likely to be uneven. The rebound is expected to be slower in poor countries that can’t afford massive government stimulus and in those dependent on tourism. Economic damage from the health crisis is “reversing gains in poverty reduction and last year increased the ranks of extreme poor by 95 million compared with pre-pandemic projections. She also predicted that “many of the jobs lost are unlikely to return – because of trends accelerated by the pandemic, such as stepped-up automation and a shift toward e-commerce and away from brick-and-mortar stores. A faster recovery in the United States means U.S. interest rates could rise “in unexpected ways, rattling financial markets and pulling investment out of hard-hit, debt-ridden emerging markets. In the IMF’s estimation, the global rebound will gradually lose momentum and return to pre-COVID levels of just above 3% growth. ‘
Italy Bans Cruise Ships from Entering Venice’s Historic Center – Italian ministers last week approved a ban on cruise ships entering Venice’s Giudecca Canal This measure was enacted in response to a request from UNESCO, and also applies to large container ships, according to the BBC. Coronavirus has for the moment called a halt to most global cruise ship traffic. But that can be expected to start again once the pandemic is under control. Does last week’s action mean Venice has conquered its addiction to the cruise ship form of mass tourism? Alas, that’s not to be so. Passengers will still be able to visit La Serenissima, in still excessive numbers, but henceforth, cruise ships must tie up at Marghera, the industrial hub, across the ecologically fragile lagoon. Even that solution is temporary, until a permanent solution is found – something Venice has been searching for since at least 2013, when a ban on vessels weighing more than 96,000 tonnes from entering the Giudecca Canal was first imposed – and then subsequently overturned – according to the BBC. According to the NYT: Citing the need to protect the “artistic, cultural and environmental heritage of Venice,” the Italian cabinet passed a decree late Wednesday calling for “urgent provisions” to detour cruise activities and freight traffic. The government mandated that Venice’s port authority issue a public consultation – described as a “call for ideas” – to find alternative ports to handle large container ships and cruise ships over 40,000 tons and planned to build a terminal outside the lagoon. Dario Franceschini, Italy’s culture minister, praised the decision on Thursday, citing the shock of visitors to Venice upon seeing cruise ships “hundreds of meters long and as tall as apartment buildings,” passing in front of St. Mark’s Square. He said the government’s decision had been influenced by UNESCO, the cultural protection agency of the United Nations, which had long called on Italy to reconcile the balancing of lagoon preservation with the economics of cruise and freight activity.
School strikes erupt throughout the UK – Strikes have erupted in the education sector across the UK alongside other disputes in the public sector, transport, health and energy. These strikes express an initial yet significant growth in the class struggle. Employers have used the pandemic as a pretext for ramped-up exploitation of their workers. The crocodile tears over “disadvantaged children” and “lost learning” have been used as an ideological weapon to force children back into school so that their parents can return to work and produce profits. For educators, the “return to school” has been a return to cuts, job losses and the victimisation and harassment of those who oppose Prime Minister Boris Johnson’s government agenda. The education unions have played a key role throughout the pandemic in suppressing opposition to unsafe workplaces, opposing the campaigns led by educators for the closure of schools. They supported the “big bang” reopening of schools in March, despite the high levels of infection and lack of safety protection for staff and children. The unions in every sector continue to play a criminal role in policing opposition to the cuts to jobs and services, being escalated as the economic impact of the pandemic and massive corporate bailouts is placed on the shoulders of the working class. They have suppressed industrial action throughout the last year in the name of “national unity”, allowing big business and the Conservative government to launch an assault on jobs, wages and conditions. Lecturers at 26 further education colleges across Scotland began a two-day strike last Wednesday, following a one-day strike the previous week. Called by the Educational Institute of Scotland Further Education Lecturers’ Association (EIS-FELA), its members are protesting plans by Colleges Scotland to replace lecturer posts with lower-paid instructor posts. Further strikes are planned. A one-day strike involving all six further education colleges in Northern Ireland took place March 24, called by the University and College Union (UCU) in a pay and workload dispute. Many more actions are being kept isolated to individual schools to prevent a unified campaign across the education sector. Since February, there have been the following strikes in colleges and secondary, primary and special schools:
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