Key Economic Indicators – May 25, 2020

  • The advance figure for initial claims for unemployment insurance decreased 249 thousand to 2,438 thousand in the week ending May 16. The 4-week moving average was 3,042 thousand, a decrease of 501 thousand from the previous week’s revised average. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending May 9 was 25,073 thousand, an increase of 5,525 thousand from the previous week’s revised level. The 4-week moving average was 22,002.25 thousand, an increase of 2,313.5 thousand from the previous week’s revised average. The advance seasonally adjusted insured unemployment rate was 17.2% for the week ending May 9, an increase of 1.7 percentage points from the previous week’s revised rate. It was stated that: “The COVID-19 virus continues to impact the number of initial claims and insured unemployment.  This report now includes information on claimants filing Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation claims.”
  • Unemployment rates were higher in April in all 50 states and the District of Columbia, according to the U.S. Bureau of Labor Statistics. Similarly, all 50 states and the District had jobless rate increases from a year earlier. The national unemployment rate rose by 10.3 percentage points over the month to 14.7% and was 11.1 points higher than in April 2019. Nevada had the highest unemployment rate in April, 28.2%, followed by Michigan, 22.7%, and Hawaii, 22.3%. The rates in 43 states set new series highs, since the beginning in 1976. Connecticut had the lowest unemployment rate, 7.9%. followed by Minnesota (8.1%) and Nebraska (8.3%).
  • Nonfarm payroll employment decreased in all 50 states and the District of Columbia in April 2020. Over the year, nonfarm payroll employment decreased in all 50 states and the District. The largest job declines occurred in California (2.3447 million), New York (1.8273 million), and Texas (1.2989 million). The largest percentage declines occurred in Michigan (22.8%), Vermont (19.6%), and New York (18.8%).  All 50 states and the District of Columbia had over-the-year decreases in nonfarm payroll employment in April. The largest job declines occurred in California (2.324 million), New York (1.9049), and Texas (1.1106). The largest percentage declines occurred in Michigan (23.0%), Vermont (21.5%), and New York (-19.4%).
  • From December 2018 to December 2019, employment increased in 285 of the 355 largest U.S. counties, according to the U.S. Bureau of Labor Statistics. In December 2019, national employment (as measured by the Quarterly County Employment and Wages program) increased to 149.9 million, a 1.2% increase over the year. Cleveland, OK, had the largest over-the-year increase in employment with a gain of 5.8%. The U.S. average weekly wage increased 3.5% over the year, growing to $1,185 in the fourth quarter of 2019. Among the 355 largest counties, 341 had over-the-year increases in average weekly wages. Santa Cruz, CA, had the largest fourth quarter over-the-year wage gain at 20.7%.
  • Real state personal income grew on average 3.4% in 2018, after increasing 2.9% in 2017, according to the Bureau of Economic Analysis.  Real state personal income is a state’s current-dollar personal income adjusted by the state’s regional price parity and the national personal consumption expenditures price index.  The percent change in real state personal income ranged from 6.7% in Wyoming to 0.9% in Mississippi. Across metropolitan areas, the percent change ranged from 15.6% in Midland, Texas to negative 1.1% in Sebring-Avon Park, Florida.
  • Advance U.S. selected services total revenue for the first quarter of 2020, adjusted for seasonal variation but not for price changes, was $4,011.4 billion, a decrease of 2.8% from the fourth quarter of 2019 and up 0.8% from the first quarter of 2019, according to the U.S. Census Bureau.  The third quarter of 2019 to fourth quarter of 2019 growth was 1.0%.
  • Privately-owned housing starts in April were at a seasonally adjusted annual rate of 891 thousand, 30.2% below the revised March figure and 29.7% below the April 2019 level, according to the U.S. Census Bureau.  Single-family housing starts in April were at a rate of 650 thousand, 25.4% below the revised March figure. Privately-owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 1,074 thousand, 20.8% below the revised March rate and 19.2% below the April 2019 rate.  Single-family authorizations in April were at a rate of 669 thousand, 24.3% below the revised March figure of 884 thousand.
  • April existing home sales decreased 17.8% to an annualized rate of 4,330 thousand units, according to the National Association of Realtors. The April figure was 17.2% below the April 2019 figure. There were 1,470 thousand homes for sale at the end of the month. This represents a supply of 4.1 months at the current sales rate, compared to 4.2 in April of 2019. The median sales price of existing homes sold was $286.8 thousand, 7.4% above April 2019.
  • The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates decreasing. 30-year fixed-rate mortgage averaged 3.24% for the week ending May 21, down from last week when it averaged 3.28%. A year-ago, the 30-year rate was 4.06%. 15-year fixed-rate mortgage averaged 2.70%, down from last week when it averaged 2.72%. A year-ago at this time, the 15-year rate averaged 3.51%.
  • Mortgage applications decreased 2.6% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending May 15th.
  • Manufacturing firms reported continued weakness in regional manufacturing activity this month, according to results from the Philadelphia FED Manufacturing Business Outlook Survey for May. Despite remaining well below zero, the survey’s current indicators for general activity, new orders, shipments, and employment rose this month after reaching long-term low readings in April. After reaching a 40-year low in April, the diffusion index for current general activity increased 13 points to negative 43.1, its third consecutive negative reading. The prices paid index increased 13 points to 3.2, and the prices received index increased 8 points to a reading of negative 3.1, its second consecutive negative reading.
  • The Philadelphia FEDlaunched a weekly business outlook survey on COVID-19. The survey (162 firms) for the week ending on May 17th indicated that nearly 64% of all responding firms reported decreases of more than 5% in new orders or sales (unchanged from last week), while 7% reported increases of more than 5% (down slightly from the previous week).  The impacts of various factors were negative for all firms, except for a very small net positive impact of reshoring of production. Among all firms, the three most frequently cited negative impacts came from mandated cutbacks or closure (51%), demand shock (45%), and cash flow or accounts receivables (38%). More than 61% of the firms reported shifting to telecommuting/work from home in response to COVID-19 impacts, 42% reported ceasing all hiring, and 31 percent reported furloughing employees.
  • The Chicago Fed’s National Financial Conditions Index (NFCI) was negative 0.46 in the week ending May 15, down from negative 0.38. Risk indicators contributed negative 0.20, credit indicators contributed negative 0.17, and leverage indicators contributed negative 0.08 to the index in the latest week. The adjusted index (ANFCI), which isolates a component of financial conditions uncorrelated with economic conditions to provide an update on financial conditions relative to current economic conditions, ticked up in the latest week to 0.25 from a revised 0.23. Risk indicators contributed negative 0.30, credit indicators contributed negative 0.26, leverage indicators contributed negative 0.02, and the adjustments for prevailing macroeconomic conditions contributed 0.83 to the index in the latest week.
  • The Federal Reserve Bank continues to take measures to alleviate the negative effects of the virus. On May 19th, these measures were summarized by the FED Chairman Jerome H. Powell before the U.S. Senate’s Committee on Banking, Housing, and Urban Affairs: “Available economic data for the current quarter show a sharp drop in output and an equally sharp rise in unemployment. By these measures and many others, the scope and speed of this downturn are without modern precedent and are significantly worse than any recession since World War II. Since the pandemic arrived in force just two months ago, more than 20 million people have lost their jobs, reversing nearly 10 years of job gains. In March, we lowered our policy interest rate to near zero, and we expect to maintain interest rates at this level until we are confident that the economy has weathered recent events and is on track to achieve our maximum-employment and price-stability goals. In addition to monetary policy, we took forceful measures in four areas: open market operations to restore market functioning; actions to improve liquidity conditions in short-term funding markets; programs in coordination with the Treasury Department to facilitate more directly the flow of credit to households, businesses, and state and local governments; and measures to allow and encourage banks to use their substantial capital and liquidity levels built up over the past decade to support the economy during this difficult time.” On May 21st, Vice Chair Richard H. Clarida re-iterated the Bank’s stance: “The Federal Reserve will continue to act forcefully, proactively, and aggressively as we deploy our toolkit—including our balance sheet, forward guidance, and lending facilities—to provide critical support to the economy during this challenging time and to do all we can to make sure that the recovery from this downturn, once it commences, is as robust as possible.”
  • As of May 22nd, there are over 5.160 million COVID-19 confirmed cases in the world, 335.418 thousand deaths, and 1,985.656 thousand recovered, according to Johns Hopkins University, Coronavirus Resource Center (access date and time: 5/22/2020, 1pm EST). In the United States, there are 1.588 million confirmed cases, 95.276 thousand deaths, and 298.418 thousand recovered cases. The world is struggling to control the spread of the virus.

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