U.S. Initial Jobless Claims Continue Upward Climb
Seasonally adjusted state initial jobless claims for unemployment insurance increased to 885,000 in the week ending December 12 from a upwardly-revised 862,000 in the previous week (was 853,000). This is the highest level of claims since September 5. The Action Economics Forecast Survey anticipated 800,000 new state claims. (…)
Claims for the federal Pandemic Unemployment Assistance (PUA) program, which covers individuals such as the self-employed who are not qualified for regular/state unemployment insurance, rose to 455,037 from 415,037. This is the highest since September 19. Numbers for this and other federal programs are not seasonally adjusted.
Seasonally adjusted state continuing claims for unemployment insurance declined to 5.508 million in the week ending December 5, from 5.781 million. Continuing PUA claims, which are lagged an additional week and not seasonally adjusted, increased to 9.245 million from 8.556 million. Pandemic Emergency Unemployment Compensation (PEUC) claims rose to a new high of 4.801 million in the week ending November 28. This program covers people who were unemployed before COVID but exhausted their state benefits and are now eligible to receive an additional 13 weeks of unemployment insurance, up to a total of 39 weeks. Funding for both PUA and PEUC programs is set to expire on December 26, which means that at current levels, 14.0 million people would lose their benefits in January.
If you include the latest data available, which is lagged one additional week, the total number of state, PUA and PEUC continuing claims rose to 19.5 million or 12.2% of the labor force.
Axios’ take:
Unlike in previous weeks when the number of people receiving traditional unemployment benefits was declining and the number of Americans on long-term unemployment programs like the PEUC was rising, in the last week of November the numbers rose across the board.
- The number of people receiving traditional unemployment benefits rose by 552,000.
- The number receiving PUA increased by 689,000.
- PEUC rose by 269,000.
- Extended Benefits rose by 79,000.
- In all, the number of Americans receiving unemployment benefits increased by 1.6 million.
- For the week of Nov. 28, 20.6 million Americans were receiving some kind of unemployment benefits
A little more than a week before the programs expire on Dec. 26, claims for pandemic-specific unemployment benefits are spiking with nearly 1 million new people receiving unemployment assistance via the temporary programs, the latest data from the Labor Department show.
As of Nov. 28, there were 14 million people receiving unemployment benefits through the PUA and Pandemic Emergency Unemployment Compensation programs, an increase of 958,000 from the previous week.
- 1.4 million Americans filed unemployment claims for the first time last week, with 935,000 filing for traditional unemployment benefits and 455,000 filing claims for the Pandemic Unemployment Assistance (PUA) program.
U.S. Housing Starts Firm During November
Home building remains notably robust, spurred by record low interest rates. Housing starts improved 1.2% (12.8% y/y) in November to 1.547 million (SAAR) from 1.528 million in October, revised from 1.530 million. Despite the increase, starts remained 2.5% below their January peak of 1.617 million. The Action Economics Forecast Survey expected 1.530 million starts in November.
Starts of single-family homes edged 0.4% higher last month (27.1% y/y) to 1.186 million from 1.181 million in October, revised from 1.179 million. The latest level was roughly three-quarters above the April low. A 4.0% increase (-17.6% y/y) in multi-family starts to 361,000 from 347,000 in October, revised from 351,000, accompanied the rise. Multi-family starts have been near that level for five months, down 42.5% versus the peak this past January.
Building permits rose 6.2% (8.5% y/y) to 1.639 million in November from 1.544 million, revised from 1.545 during October. It was the highest level of permits since September 2006. Permits to build single-family homes rose 1.3% (22.2% y/y) to 1.143 million following six consecutive months of increase. Permits to build multi-family homes strengthened 19.2% (-13.7% y/y) to 496,000 after falling for three straight months.
By region, housing starts in the Northeast rebounded 58.8% (27.4% y/y) to 135,000 and recovered October’s decline. In the West, starts improved 8.2% (15.3% y/y) to 407,000, the highest level since January. In the South, starts eased 6.0% (+9.0% y/y) to 809,000 following October’s 14.3% rise. Housing starts in the Midwest fell 4.9% (+15.3% y/y) to 196,000 following declines in three of the prior four months.
Covid-19 Live Updates: In 5 Days, Over 1 Million U.S. Cases, as I.C.U. Beds Fill California reported just 3 percent availability of I.C.U. beds statewide on Thursday.
(…) On Thursday, the state reported more than 45,000 new cases and over 260 deaths. That made it the second-worst day in terms of daily reported cases and the third-worst for a single-day death toll. And it is hardly alone. More than a third of Americans live in areas where hospitals are running critically short of intensive care beds, federal data show. (…)
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1 of every 220 Americans diagnosed in last week
In the last week alone, 1 out of every 220 Americans was diagnosed with the coronavirus — an astronomically large portion of the population to be sick at the same time, Axios’ Dani Alberti and Sam Baker write. About 1 in 20 have been diagnosed since the pandemic began.
The new infections will translate into large numbers of hospitalizations — and eventually deaths — in the coming weeks. It also means the rest of us have a decent chance of interacting with someone who is infected, anywhere we go.
The dollar is close to hitting its weakest level in six years
Data: FactSet; Chart: Axios Visuals
(…) The latest blow to the dollar came from the Fed, which vowed not to touch policy even if the outlook for the U.S. economy brightens as it now expects,” Joe Manimbo, senior analyst at Western Union Business Solutions, told MarketWatch, adding that expectations for more government spending are also weighing on the greenback. (…)
The dollar index is down nearly 7% year to date and 13% lower since hitting its 2020 high in March.
Tesla, the Largest-Cap Stock Ever to Enter S&P 500: A Buy Signal or a Bubble?
Good read from Rob Arnott, Vitali Kalesnik and Lilllian Wu, with lots of industry stats.
(…) Because Tesla’s addition to the index is not a secret, we can comfortably surmise that hedge fund managers and other liquidity suppliers have already stockpiled most of the $220 billion and are ready to supply the shares to the indexers for this largest single trade in history. What does it all mean for investors? (…)
Given all the classical signs of a bubble in Tesla’s stock, and the evidence of 31 years of S&P additions and deletions, December 21–22 likely marks the beginning of a reversal in Tesla’s share price. Similarly, Apartment Investment and Management, the company that Tesla replaces in the index, is apt to enjoy its own reversal of fortune as its share price rises over the next year. Investors guided by history may wish to take advantage of this opportunity to buy low and sell high!
SPAC SMAC
SPACs are blank-check companies formed with the express intention of merging with or acquiring another company. Usually, if such a deal isn’t consummated within two years, the seed investors get their money back. Over the past 28 months, 272 SPACS have formed, raising $88 billion. A successful SPAC is one that goes public and then finds a firm to merge with, essentially filling the empty box with an actual company. According to Goldman Sachs, an overwhelming number of SPACs (71%) have yet to find a dance partner. That’s not a great hit rate. The clock is ticking on all those misfit empty-box SPACs, and yet the money continues to flow into the creation of new ones. What could go wrong? (Fortune)
Cyberhack looks like act of war
Axios’ Mike Allen:
A Trump administration official tells me that the cyberattack on the U.S. government and corporate America, apparently by Russia, is looking worse by the day — and secrets may still be being stolen in ways not yet discovered. “We still don’t know the bottom of the well,” the official said.
Stunningly, the breach goes back to at least March, and continued all through the election. The U.S. government didn’t sound the alarm until this Sunday.
Microsoft President Brad Smith told the N.Y. Times that at least 40 companies, government agencies and think tanks had been infiltrated.
- The hack is known to have breached the departments of Defense, State, Homeland Security, Treasury, Commerce, and Energy and its National Nuclear Security Administration — plus the National Institutes of Health.
- 8 countries: Microsoft, which has helped respond to the breach, said in a statement that 80% of its 40 customers known to have been targeted are in the U.S., plus others in the U.K., Israel, UAE, Canada, Mexico, Belgium and Spain.
In unusually vivid language for a bureaucracy, the U.S. Cybersecurity and Infrastructure Security Agency, part of Homeland Security, said yesterday that the intruder “demonstrated sophistication and complex tradecraft.” The agency said the breach “poses a grave risk to the Federal Government and state, local, tribal, and territorial governments as well as critical infrastructure entities and other private sector organizations.”
If this had been a physical attack on America’s secrets, we could be at war. (…)
Sen. Chris Coons (D-Del.) told Andrea Mitchell on MSNBC: “It’s pretty hard to distinguish this from an act of aggression that rises to the level of an attack that qualifies as war. … [T]his is as destructive and broad scale an engagement with our military systems, our intelligence systems as has happened in my lifetime.”
(…) it’s more like someone has been walking in and out of your house for months, and you don’t really know what they took.
And they may have built a secret door. “For someone to have access that long, who’s this sophisticated, it’s pretty likely they built other ways to get in that are hard to find,” one official told me. (…)Promising to impose “substantial costs” on the perpetrator, Biden said in a statement: “I will not stand idly by in the face of cyber assaults on our nation.”
U.S. to blacklist dozens of Chinese firms including SMIC, sources say
(…) The Commerce Department is expected to add around 80 additional companies and affiliates to the so-called entity list, nearly all of them Chinese.
China’s foreign ministry said that if true, the blacklisting would be evidence of U.S. oppression of Chinese companies and that Beijing would continue to take “necessary measures” to protect their rights. (…)
The designations by the Commerce Department are expected to name some Chinese companies that Washington says have ties to the Chinese military, including some helping it construct and militarize artificial islands in the South China Sea, as well as some involved in alleged human rights violations, the sources said.
The Trump administration has often used the entity list – which now includes more than 275 China-based firms and affiliates – to hit key Chinese industries. (…)
The entity list designation would force SMIC to seek a special license from the Commerce Department before a U.S supplier could send it key goods, part of a bid by the administration to curb its access to sophisticated U.S. chipmaking technology.
Commerce is also expected to add numerous SMIC-affiliated companies to the entity list, the sources said. (…)
President-elect Biden promised to impose “substantial costs” to those responsible for the suspected Russian cyberattack on multiple government agencies and U.S. companies. Go deeper.
More States Hit Google Over Alleged Monopoly Conduct The legal action by 38 states alleges the tech giant maintained monopoly power over internet search through anticompetitive contracts and conduct.
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Tech Giants Face New Rules in Europe
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Apple Pay draws antitrust attention Fast-growing fintech business is likely to be tech group’s next regulatory battleground