The top-line ISM Manufacturing Index declined to 41.5 from 49.1, confirming that the economy sank into recession in March. The forward-looking new orders component declined to 27.1 from 42.2 and the employment sub-index collapsed to 27.5 from 43.8. … READ MORE >
Joseph Brusuelas
New data on spread of coronavirus shows need for caution on relaxing restrictions
After a two-week period of fewer cases of the coronavirus, Americans are moving gingerly toward a resumption of normal social and professional activity. The next few weeks will be instructive as to the logic of reopening the economy, new infections and rising deaths. … READ MORE >
Initial jobless claims, state by state: Washington, Oregon, Nevada and Georgia report significant increases
While most states showed significant decreases in claims, four states — Washington, Oregon, Nevada and Georgia – reported significant increases. Jobless claims in Iowa also increased, which matches up with the news of the disease spreading through employees at meatpacking plants. … READ MORE >
American Badlands: 30 million unemployed in six weeks
In just over six weeks, 30.2 million Americans have joined the ranks of the unemployed, which implies a near real-time unemployment rate of 23.8%. For the week ending April 25, approximately 3.83 million individuals filed for first-time unemployment claims. … READ MORE >
First-quarter GDP: Depression-like shock, no depression
Depression-like shock, and no depression, are likely to be the mantras for policymakers following this morning’s 4.8% drop in U.S. first-quarter gross domestic product. That drop in output and the 7.6% decline in household consumption almost certainly understate the depth and breadth of the collapse in economic activity. … READ MORE >
Sources of deflation: Measuring distress in the real economy and financial markets
The magnitude of the economic shocks strongly implies that the probability of a general decline in prices — a dynamic known as deflation — is rising. This is happening despite $3.4 trillion in liquidity commitments and $2.89 trillion in fiscal support. … READ MORE >
Monetary policy in an era of pandemic economics
The Fed has put together nine different lending facilities and put forward liquidity commitments that run in the trillions. While we expect the Federal Open Market Committee to restate its commitment to keeping short-term rates as low as possible for as long as necessary, there will be more policy innovation coming in the near term. … READ MORE >
Testing, testing, testing: Preparing for the reopening of the economy
The idea of reopening the economy is somewhat of a misnomer. The economy will not return to normal all at once, and there is a clear risk of a second wave of the pandemic coming with the relaxation of shelter-in-place orders around the country. Since some governors are in the process of relaxing these restrictions, we thought this is the perfect opportunity to discuss the risks around those decisions. … READ MORE >
Claims for unemployment insurance continue to overwhelm state agencies
The number of initial claims for unemployment benefits declined in all but five states for the week ending April 18, according to filings processed at state agencies. But this is only the fifth week since the economies of most states were shut down to stop the spread of the coronavirus, and the levels remain extraordinarily high. … READ MORE >
Initial jobless claims deteriorate further as concerns over wage deflation mount
American labor dynamics deteriorated further for the week ending April 18 as 4.427 million workers filed initial jobless claims, implying that the near real-time unemployment rate has increased to 21.1% at a minimum. … READ MORE >