by Calculated Risk on 7/01/2021 04:39:00 PM

A few brief excerpts from a note by Goldman Sachs economist Spencer Hill:

We estimate nonfarm payrolls rose 750k in June (mom sa) ... Coupled with very strong labor demand and continued progress on vaccinations and reopening, we believe job growth probably picked up further in the month. ... We estimate a two-tenths drop in the unemployment rate to 5.6%, reflecting a strong household employment gain but a further rise in the participation rate.
emphasis added

CR Note: The consensus is for 675 thousand jobs added, and for the unemployment rate to decrease to 5.6%.

by Calculated Risk on 7/01/2021 04:19:00 PM

Congratulations to the residents of Delaware and Minnesota on joining the 70% club! Go for 80%!!!

This data is from the CDC.

According to the CDC, on Vaccinations.

Total doses administered: 328,152,304, as of a week ago 320,687,205. Average doses last week: 1.07 million per day.

COVID Metrics
	Today	Yesterday	Week Ago	Goal
Percent over 18, One Dose	66.7%	66.5%	65.7%	≥70.0%1,2
Fully Vaccinated (millions)	155.9	154.9	151.3	≥1601
New Cases per Day3,4🚩	12,514	12,504	11,472	≤5,0002
Hospitalized3	11,974	11,948	12,329	≤3,0002
Deaths per Day3,4	206	213	233	≤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 18 states and D.C. that have already achieved the 70% goal: Vermont, Hawaii and Massachusetts are at 80%+, and Connecticut, Maine, New Jersey,  Rhode Island, Pennsylvania, New Mexico, Maryland, California, Washington, New Hampshire, New York, Illinois, Virginia, Delaware, Minnesota and D.C. are all over 70%.

Next up are Colorado at 69.8%, Oregon at 69.8%, Wisconsin at 65.4%, Nebraska at 65.3%, and Florida at 64.6%.

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 7/01/2021 12:38:00 PM

Note: The year-over-year occupancy comparisons are easy, since occupancy declined sharply at the onset of the pandemic.  So STR is comparing to the same week in 2019.

The occupancy rate is down 7.3% compared to the same week in 2019. Leisure (weekend) occupancy has recovered, but weekday (more business) is still down double digits.

From CoStar: STR: Weekly US Hotel Occupancy Inches Closer to 70%

U.S. weekly hotel occupancy hit its highest level since late October 2019, according to STR‘s latest data through June 26.

June 20-26, 2021 (percentage change from comparable week in 2019*):

• Occupancy: 69.9% (-7.3%)
• Average daily rate (ADR): US$133.36 (-0.5%)
• Revenue per available room (RevPAR): US$93.19 (-7.8%)

In addition to occupancy reaching its highest point since the week ending 26 October 2019, ADR and RevPAR were the highest of the pandemic-era. Weekend occupancy surpassed the 2019 comparable for the second time in three weeks, while ADR was 13% higher than the corresponding weekend from June 2019.
emphasis added

The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

Click on graph for larger image.

The red line is for 2021, black is 2020, blue is the median, dashed purple is 2019, and dashed light blue is for 2009 (the worst year on record for hotels prior to 2020).

Occupancy is well above the horrible 2009 levels and weekend occupancy (leisure) has been solid.

Note: Y-axis doesn't start at zero to better show the seasonal change.

With solid leisure travel, the next two months should have decent occupancy - but it is uncertain what will happen in the Fall with business travel.

by Calculated Risk on 7/01/2021 10:35:00 AM

From the Census Bureau reported that overall construction spending decreased:

Construction spending during May 2021 was estimated at a seasonally adjusted annual rate of $1,545.3 billion, 0.3 percent below the revised April estimate of $1,549.5 billion. The May figure is 7.5 percent above the May 2020 estimate of $1,437.7 billion.
emphasis added

Private spending increased and public spending decreased:

Spending on private construction was at a seasonally adjusted annual rate of $1,203.3 billion, 0.3 percent below the revised April estimate of $1,206.8 billion. ...

In May, the estimated seasonally adjusted annual rate of public construction spending was $342.0 billion, 0.2 percent below the revised April estimate of $342.7 billion.

Click on graph for larger image.

This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.

Residential spending is 11% above the bubble peak (in nominal terms - not adjusted for inflation).

Non-residential spending is 9% above the bubble era peak in January 2008 (nominal dollars), but has been weak recently.

Public construction spending is 5% above the previous peak in March 2009, and 30% above the austerity low in February 2014, but weak recently.

The second graph shows the year-over-year change in construction spending.

On a year-over-year basis, private residential construction spending is up 28.7%. Non-residential spending is down 5.8% year-over-year. Public spending is down 8.7% year-over-year.

Construction was considered an essential service in most areas and did not decline sharply like many other sectors, but some sectors of non-residential have been under pressure. For example, lodging is down 23.2% YoY, multi-retail down 18.0% YoY, and office down 8.3% YoY.

This was below consensus expectations of a 0.4% increase in spending, however construction spending for the previous months was revised up.

by Calculated Risk on 7/01/2021 10:09:00 AM

(Posted with permission). The ISM manufacturing index indicated expansion in June. The PMI® was at 60.6% in June, down from 61.2% in May. The employment index was at 49.9%, down from 50.9% last month, and the new orders index was at 66.0%, down from 67.0%.

From ISM: June 2021 Manufacturing ISM® Report On Business®

Economic activity in the manufacturing sector grew in June, with the overall economy notching a 13th consecutive month of growth, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.

The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee:

“The June Manufacturing PMI® registered 60.6 percent, a decrease of 0.6 percentage point from the May reading of 61.2 percent. This figure indicates expansion in the overall economy for the 13th month in a row after contraction in April 2020. The New Orders Index registered 66 percent, decreasing 1 percentage point from the May reading of 67 percent. The Production Index registered 60.8 percent, an increase of 2.3 percentage points compared to the May reading of 58.5 percent. The Prices Index registered 92.1 percent, up 4.1 percentage points compared to the May figure of 88 percent and the index’s highest reading since July 1979 (93.1 percent). The Backlog of Orders Index registered 64.5 percent, 6.1 percentage points lower than the May reading of 70.6 percent. The Employment Index registered 49.9 percent; 1 percentage point lower compared to the May reading of 50.9 percent. The Supplier Deliveries Index registered 75.1 percent, down 3.7 percentage points from the May figure of 78.8 percent. The Inventories Index registered 51.1 percent, 0.3 percentage point higher than the May reading of 50.8 percent. The New Export Orders Index registered 56.2 percent, an increase of 0.8 percentage point compared to the May reading of 55.4 percent. The Imports Index registered 61 percent, a 7-percentage point increase from the May reading of 54 percent.”
emphasis added

This was below expectations.

This suggests manufacturing expanded at a slower pace in June than in May.

by Calculated Risk on 7/01/2021 08:36:00 AM

The DOL reported:

In the week ending June 26, the advance figure for seasonally adjusted initial claims was 364,000, a decrease of 51,000 from the previous week's revised level. This is the lowest level for initial claims since March 14, 2020 when it was 256,000. The previous week's level was revised up by 4,000 from 411,000 to 415,000. The 4-week moving average was 392,750, a decrease of 6,000 from the previous week's revised average. This is the lowest level for this average since March 14, 2020 when it was 225,500. The previous week's average was revised up by 1,000 from 397,750 to 398,750.
emphasis added

This does not include the 115,267 initial claims for Pandemic Unemployment Assistance (PUA) that was up from 111,778 the previous week.

The following graph shows the 4-week moving average of weekly claims since 1971.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 392,750.

The previous week was revised up.

Regular state continued claims increased to 3,469,000 (SA) from 3,413,000 (SA) the previous week.

Note: There are an additional 5,935,630 receiving Pandemic Unemployment Assistance (PUA) that decreased from 5,950,861 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 5,261,991 receiving Pandemic Emergency Unemployment Compensation (PEUC) down from 5,274,108.

Weekly claims were lower than the consensus forecast.

by Calculated Risk on 6/30/2021 09:00:00 PM

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released.  The consensus is for a decrease to 400 thousand from 411 thousand last week.

• At 10:00 AM, ISM Manufacturing Index for June. The consensus is for the ISM to be at 61.5, up from 61.2 in May. The employment index was at 50.9% in May, and the new orders index was at 67.0%.

• At 10:00 AM, Construction Spending for May. The consensus is for a 0.4% increase in construction spending.

• Late in the day, Light vehicle sales for June. The consensus is for light vehicle sales to be 17.1 million SAAR in June, up from 17.0 million in May (Seasonally Adjusted Annual Rate). Wards Auto is forecasting sales of 15.8 million SAAR in June.

by Calculated Risk on 6/30/2021 05:06:00 PM

This data is from the CDC.

According to the CDC, on Vaccinations.

Total doses administered: 326,521,526, as of a week ago 319,872,053. Average doses last week: 0.95 million per day.

COVID Metrics
	Today	Yesterday	Week Ago	Goal
Percent over 18, One Dose	66.5%	66.2%	65.6%	≥70.0%1,2
Fully Vaccinated (millions)	154.9	154.2	150.8	≥1601
New Cases per Day3,4🚩	12,609	12,370	11,428	≤5,0002
Hospitalized3	11,948	11,837	12,402	≤3,0002
Deaths per Day3,4	256	256	263	≤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, Maine, New Jersey,  Rhode Island, Pennsylvania, New Mexico, Maryland, California, Washington, New Hampshire, New York, Illinois, Virginia and D.C. are all over 70%.

Next up are Delaware at 69.9%, Minnesota at 69.9%, Colorado at 69.7%, Oregon at 69.5%, Wisconsin at 65.3%, Nebraska at 65.2%, and Florida at 64.5%.

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 6/30/2021 04:38:00 PM

Fannie Mae reported that the Single-Family Serious Delinquency decreased to 2.25% in May, from 2.38% in April. The serious delinquency rate is up from 0.89% in May 2020.

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

The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59% following the housing bubble, and peaked at 3.32% in August 2020 during the pandemic.

Click on graph for larger image

By vintage, for loans made in 2004 or earlier (2% of portfolio), 5.27% are seriously delinquent (down from 5.44% in April). For loans made in 2005 through 2008 (2% of portfolio), 9.09% are seriously delinquent (down from 9.33%), For recent loans, originated in 2009 through 2021 (96% of portfolio), 1.82% are seriously delinquent (down from 1.94%). So Fannie is still working through a few poor performing loans from the bubble years.

Mortgages in forbearance are 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 they are employed.

Note: Freddie Mac reported earlier.

by Calculated Risk on 6/30/2021 02:35:00 PM

From the Las Vegas Visitor Authority: May 2021 Las Vegas Visitor Statistics

The upward trajectory of tourism indicators continued in May as the destination welcomed nearly 2.9M visitors, + 11.8% MoM and down roughly -22% vs. May 2019.

Hotel occupancy reached nearly 71%, up 5.3 pts MoM, as Weekend occupancy approached 88%, coming within 8.6 pts of May 2019 levels. Midweek occupancy saw gains as well, reaching 62.8%, up 4.9 pts MoM and down 25.3 pts vs. May 2019.

Click on graph for larger image.

The first graph shows visitor traffic for 2019 (blue), 2020 (orange) and 2021 (red).

Visitor traffic was down 22.0% compared to the same month in 2019.

Convention traffic was non-existent again in May, and was down 100% compared to May 2019.

There has been no convention traffic since March 2020.  

I'll add a graph of convention traffic once conventions start to reopen.

Note: Conventions started again in June.