U.S. Initial Jobless Insurance Claims and Continuing Claims Decline
Initial claims for unemployment insurance declined to 793,000 during the week ended February 6 from 812,000 during the prior week, revised from 779,000. The four-week moving average of initial claims fell to 823,000, a five-week low. The latest week compared to 757,000 claims expected in the Action Economics Forecast Survey.
Initial claims for the federal Pandemic Unemployment Assistance (PUA) program amounted to 334,524. This compares to a recent high of 455,037 in the second week of December. The PUA program covers individuals such as the self-employed who are not included in regular state unemployment insurance.
Continuing claims for regular state unemployment insurance fell to 4.545 million in the week ended January 30 from 4.690 million in the prior week, revised from 4.592 million. Continuing PUA claims, which are lagged an additional week and are not seasonally adjusted, rose to 8.715 million from 7.219 million in the prior week. The Pandemic Emergency Unemployment Compensation (PEUC) claims jumped to 4.778 million in the January 23 week from 3.605 in the prior week. This program covers people who were unemployed before COVID but exhausted their state benefits and are now eligible to receive benefits through March 14, 2021.
The total number of all state, federal and PUA and PEUC continuing claims surged to 20.435 million after falling sharply to 17.839 million in the prior week. This grand total also is not seasonally adjusted.
(Data: U.S. Department of Labor; Chart: Axios Visuals)
The WSJ adds:
Last week’s overall jobless claims number could have been lower than reported. The Ohio Department of Job and Family Services said it believes the state’s large increase in jobless claims last week was largely driven by attempted fraud. The state reported approximately 140,000 new unemployment claims in the week ended Feb. 6, triple the figure reported a week earlier. The state’s unemployment office said it will review all claims, which could lead to delays for some legitimate filers. States across the country have struggled with fraudulent unemployment insurance claims during the pandemic.
House Panel Clears $1,400 Stimulus Payments, Family Tax Credits A key plank of President Joe Biden’s Covid-19 relief package moves forward.
CONSUMER WATCH
Yesterday I showed a chart from tracktherecovery.com showing total consumer spending in the U.S up 4.1% YoY during the week ended Jan. 24. Here’s a table from BofA (via ZH) showing trends in card spending by states for the seven days ended Feb. 6.
The resulting growth rates for January are spectacularly stronger than the current consensus:
Is this bullish, or bearish? Interest rate call, inflation call, stimulus call…Retail Sales are out Feb. 17.
Surging U.S. Home Prices Gain Momentum as Rally Intensifies The strongest housing boom in more than a decade is boosting home values.
The median sales price for existing homes in each of more than 180 metro areas tracked by the National Association of Realtors rose in the fourth quarter from a year earlier, the association said Thursday. That is the second consecutive quarter that every metro area tracked by NAR posted an annual price increase, marking the first time this milestone has been achieved in back-to-back quarters. (…)
In the fourth quarter, 161 metro areas posted double-digit-percentage price increases, up from 115 metro areas with double-digit gains in the third quarter. (…)
“People are willing to move farther out because they only have to go to the office once or twice a week, or month,” said Richard Whiteley, co-president and chief operating officer at IHP Capital Partners, which invests in new-home construction and land development. “There’s a race for space.”
The pandemic also has helped push the supply of homes on the market to record lows, a further boost to prices as potential sellers have been wary of increasing their virus exposure by letting strangers tour their houses. (…)
Prices are rising so rapidly they are outweighing the benefit of rock-bottom borrowing rates, NAR said. In the fourth quarter, the typical monthly mortgage payment ticked upward to $1,040, from $1,020 a year earlier, NAR said, even as mortgage rates declined.
Climbing home prices also push up the cost of a down payment, which can be a major obstacle for first-time home buyers, even if monthly mortgage payments are affordable. (…)
Looks like a perfect storm, pandemic-fed. House prices are up almost 10% YoY nationally on strong demand and limited supply, both likely to endure until “normalization”. CalculatedRisk today reports that January real estate sales are up 9.5% and 27.5% YoY in Atlanta and Houston respectively while inventory is down 52% and 31% respectively.
We know artificially low mortgage rates will eventually normalize, severely hurting affordability, and, eventually, house prices.
This feeds into the inflation debate given the linkage between house prices and rent. In 2020, house price inflation spiked from 3% to 10% while rent and owners’ equivalent rent inflation, respectively 8% and 24% weights in the CPI, eased from 3.5% to 2.0% YoY and +1.2% annualized in Q4’20. That downward pressure also seems artificial and unsustainable.
- Another Remote-Work Year Looms Workplace-return dates are getting pushed to September or beyond, and that is keeping companies and their employees in a “moment of limbo.”
(…) Nearly a year of makeshift work at home has weighed on employees, leaders say. While many companies say productivity is up, executives worry that creativity is suffering and say that burnout is on the rise. Even so, bosses struggle to say when things will change. (…)
EARNINGS WATCH
We now have 355 reports in, an 82% beat rate and a +16.9% surprise factor.
Q4’20 earnings are now seen up 3.0% (+6,9% ex-Energy), accelerating to +21.2% (+22.7% ex-E) in Q1’21.
Trailing EPS are now $142.02. 2021e: $173.69. 2022e: $200.41.
P/E Ratios
From Ed Yardeni:
Just so you know on the Russell 2000 Index, many will report its P/E as FTRussell reports it (below) but understand that their calculation excludes companies losing money which are near 50% of the index by some measures. It looks like Yardeni has its own, likely correct, calculation.
More Russell 2000 factoids from the Market Ear:
China Orders BBC Off the Air in Its Territory China’s government orders the British Broadcasting Corp. off the airwaves days after Beijing’s primary international news channel lost its license in the U.K.