by Calculated Risk on 6/25/2021 03:41:00 PM

Government transfer payments decreased in May compared to April, but were still almost $1.0 trillion (on SAAR basis) above the February 2020 level (pre-pandemic)  Note: Seasonal adjustment doesn't make sense with one time payments, but that is how the data is presented.  

Most of the increase in transfer payments - compared to the levels prior to the crisis - is from unemployment insurance and "other" (includes direct payments). 

This table shows the amount of unemployment insurance and "Other" transfer payments since February 2020 (pre-crisis level).  The increase in "Other" was mostly due to parts of the relief acts including direct payments.

There was a large increase in "Other" in March due to the American Rescue Plan Act.

Note: Not in the table below, but Social Security payments haven't increased significantly since the pre-recession levels (from $1,065 billion SAAR in Jan 2020 to $1,111 billion SAAR in May 2021).

Selected Transfer Payments Billions of dollars, SAAR
	Other	Unemployment Insurance
Feb-20	$506	$28
Mar-20	$515	$74
Apr-20	$3,379	$493
May-20	$1,360	$1,356
Jun-20	$758	$1,405
Jul-20	$760	$1,331
Aug-20	$692	$636
Sep-20	$936	$359
Oct-20	$732	$304
Nov-20	$620	$281
Dec-20	$654	$304
Jan-21	$2,355	$556
Feb-21	$778	$535
Mar-21	$4,748	$541
Apr-21	$1,404	$495
May-21	$865	$459

A key measure of the health of the economy (Used by NBER in recession dating) is Real Personal Income less Transfer payments.

Click on graph for larger image.

This graph shows real personal income less transfer payments since 1990.

This measure of economic activity increased 0.4% in May, compared to April, and was up 0.8% compared to February 2020 (previous peak).

This is the first of the key NBER measures - GDP, Employment, Industrial Production, Real Personal Income less Transfer Payments - that is above pre-recession levels. GDP will be above pre-recession levels in Q2.

by Calculated Risk on 6/25/2021 03:33:00 PM

IMPORTANT: Nearly all COVID deaths in US are now among unvaccinated

This data is from the CDC.

According to the CDC, on Vaccinations.

Total doses administered: 321,199,379, as of a week ago 316,048,776. Average daily doses: 0.74 million.

COVID Metrics
	Today	Yesterday	Week Ago	Goal
Percent over 18, One Dose	65.8%	65.7%	65.1%	≥70.0%1,2
Fully Vaccinated (millions)	151.6	151.3	148.5	≥1601
New Cases per Day3,4🚩	11,512	11,342	11,365	≤5,0002
Hospitalized3	12,235	12,329	13,538	≤3,0002
Deaths per Day3,4🚩	294	287	274	≤502
1 America's Goal by July 4th, 2my goals to stop daily posts, 37 day average for Cases, Hospitalized, and Deaths 4Cases and Deaths updated Mon - Fri 🚩 Increasing week-over-week

KUDOS to the residents of the 16 states and D.C. that have already achieved the 70% goal: Vermont, Hawaii and Massachusetts are at 80%+, and Connecticut, New Jersey, Maine, Rhode Island, Pennsylvania, New Mexico, California, Maryland, Washington, New Hampshire, New York, Illinois, Virginia and D.C. are all over 70%.

Next up are Minnesota at 69.5%, Delaware at 69.4%, Colorado at 69.2%, Oregon at 69.1%, Wisconsin at 64.9%, Nebraska at 64.8%, and South Dakota at 63.8%.

Click on graph for larger image.

This graph shows the daily (columns) and 7 day average (line) of positive tests reported.

This data is from the CDC.

by Calculated Risk on 6/25/2021 11:58:00 AM

From BofA:

Weak home sales, trade, and inventories this week led us to take down our 2Q GDP tracking estimate back down to 10% qoq saar. [June 25 estimate]
emphasis added

From Goldman Sachs:

The May increase in services consumption was softer than our previous assumptions, and we lowered our Q2 GDP tracking estimate by ¼pp to 8.5% (qoq ar). [June 25 estimate]

From the NY Fed Nowcasting Report

The New York Fed Staff Nowcast stands at 3.4% for 2021:Q2 and 4.1% for 2021:Q3. [June 25 estimate]

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2021 is 8.3 percent on June 25, down from 9.7 percent on June 24. [June 25 estimate]

by Calculated Risk on 6/25/2021 10:25:00 AM

Note: Both Black Knight and the MBA (Mortgage Bankers Association) are putting out weekly estimates of mortgages in forbearance.

This data is as of June 22nd.

From Andy Walden at Black Knight: Common, Marginal, Mid-Month Increase of Number of Forbearance Plans This Week

In what’s become a common trend of marginal mid-month increases, the number of active forbearance plans ticked up slightly from last week.

According to the weekly snapshot of Black Knight’s McDash Flash daily loan-level performance dataset, 2.06 million homeowners – representing 3.9% of mortgaged properties – remain in COVID-19 related forbearance plans.

While the total number of plans rose by 1,000 since last Tuesday, the population is still down 6% from the same time last month. That’s as compared to last week’s 5.4% monthly rate of improvement.

A 10,000 decline in the number of active GSE forbearance plans and a 7,000 drop in FHA/VA plans were both more than offset by a rise of 18,000 among portfolio and privately held mortgages.

Click on graph for larger image.

Meanwhile, starts edged lower this week and were 7% below their previous 4-week average. Likewise, removals hit their lowest level in five weeks and extension activity was down as well.

That said, more than 300K plans are still scheduled for quarterly reviews between now and next Wednesday, which could lead to more exits. We should all be expecting more activity one way or another as we near the 4th of July.
emphasis added

by Calculated Risk on 6/25/2021 08:39:00 AM

The BEA released the Personal Income and Outlays report for May:

Personal income decreased $414.3 billion (2.0 percent) in May according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) decreased $436.3 billion (2.3 percent) and personal consumption expenditures (PCE) increased $2.9 billion (less than 0.1 percent).

Real DPI decreased 2.8 percent in May and Real PCE decreased 0.4 percent; goods decreased 2.0 percent and services increased 0.4 percent. The PCE price index increased 0.4 percent. Excluding food and energy, the PCE price index increased 0.5 percent.
emphasis added

The May PCE price index increased 3.9 percent year-over-year and the May PCE price index, excluding food and energy, increased 3.4 percent year-over-year.

The following graph shows real Personal Consumption Expenditures (PCE) through May 2021 (2012 dollars). Note that the y-axis doesn't start at zero to better show the change.

Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

Personal income was above expectations,  and the increase in PCE was below expectations.

Using the two-month method to estimate Q2 PCE growth, PCE was increasing at a 16.2% annual rate in Q2 2021. (using the mid-month method, PCE was  increasing at 18.2%). However, this reflects the impact of the American Rescue Plan in April and May, and overall Q2 growth will be lower than those estimates.

by Calculated Risk on 6/24/2021 09:01:00 PM

Friday:
• At 8:30 AM ET, Personal Income and Outlays, May 2021. The consensus is for a 2.5 decrease in personal income, and for a 0.3% increase in personal spending. And for the Core PCE price index to increase 0.6% (3.4% YoY).

• At 10:00 AM, University of Michigan's Consumer sentiment index (Final for June). The consensus is for a reading of 86.8.

by Calculated Risk on 6/24/2021 04:37:00 PM

Freddie Mac reported that the Single-Family serious delinquency rate in May was 2.01%, down from 2.15% in April. Freddie's rate is up year-over-year from 0.81% in May 2020.

Freddie's serious delinquency rate peaked in February 2010 at 4.20% following the housing bubble, and peaked at 3.17% in August 2020 during the pandemic.

These are mortgage loans that are "three monthly payments or more past due or in foreclosure".

Click on graph for larger image

Mortgages in forbearance are being counted as delinquent in this monthly report, but they will not be reported to the credit bureaus.

This is very different from the increase in delinquencies following the housing bubble.   Lending standards have been fairly solid over the last decade, and most of these homeowners have equity in their homes - and they will be able to restructure their loans once (if) they are employed.

Also - for multifamily - delinquencies were at 0.19%, down from 0.20% in April, and up more than double from 0.09% in May 2020.

by Calculated Risk on 6/24/2021 04:20:00 PM

As part of the new home sales report released yesterday, the Census Bureau reported the number of homes sold by price and the average and median prices.

From the Census Bureau: "The median sales price of new houses sold in May 2021 was $374,400. The average sales price was $430,600."

The following graph shows the median and average new home prices.

Click on graph for larger image.

During the housing bust, the builders had to build smaller and less expensive homes to compete with all the distressed sales.  When housing started to recovery - with limited finished lots in recovering areas - builders moved to higher price points to maximize profits.

Then the average and median house prices mostly moved sideways since 2017 due to home builders offering more lower priced homes.  Prices picked up during the pandemic, and really picked up recently.

The average price in May 2021 was $430,600, up 17% year-over-year.  The median price was $374,400, up 18% year-over-year.  

The second graph shows the percent of new homes sold by price.

Very few new homes sold were under $200K in May 2021 (about 1.4% of all homes).  This is down from 56% in 2002.  In general, the under $200K bracket is going away.   

The $400K and greater than $500K+ brackets increased significantly over the last decade.  A majority of new homes (about 61% in May) in the U.S., are in the $200K to $400K range.

by Calculated Risk on 6/24/2021 03:53:00 PM

This data is from the CDC.

According to the CDC, on Vaccinations.

Total doses administered: 320,687,205, as of a week ago 314,969,386. Average daily doses: 0.82 million.

COVID Metrics
	Today	Yesterday	Week Ago	Goal
Percent over 18, One Dose	65.7%	65.6%	65.0%	≥70.0%1,2
Fully Vaccinated (millions)	151.3	150.8	147.8	≥1601
New Cases per Day3,4	11,342	11,288	11,866	≤5,0002
Hospitalized3	12,329	12,402	13,826	≤3,0002
Deaths per Day3,4	287	285	273	≤502
1 America's Goal by July 4th, 2my goals to stop daily posts, 37 day average for Cases, Hospitalized, and Deaths 4Cases and Deaths updated Mon - Fri

KUDOS to the residents of the 16 states and D.C. that have already achieved the 70% goal: Vermont, Hawaii and Massachusetts are at 80%+, and Connecticut, New Jersey, Maine, Rhode Island, Pennsylvania, New Mexico, California, Maryland, Washington, New Hampshire, New York, Illinois, Virginia and D.C. are all over 70%.

Next up are Minnesota at 69.4%, Delaware at 69.3%, Colorado at 69.1%, Oregon at 68.9%, Wisconsin at 64.9%, Nebraska at 64.7%, and South Dakota at 63.7%.

Click on graph for larger image.

This graph shows the daily (columns) and 7 day average (line) of positive tests reported.

This data is from the CDC.

by Calculated Risk on 6/24/2021 01:06:00 PM

From WardsAuto: Withering Supply Dragging Down U.S. Light-Vehicle Sales Second Straight Month in June (pay content)

Click on graph for larger image.

This graph shows actual sales from the BEA (Blue), and Wards forecast for June (Red).

The Wards forecast of 15.8 million SAAR, would be down 7% from last month, and up 21% from a year ago (sales collapsed at beginning of pandemic).