Consumer Confidence Dropped in November Amid Rising Covid-19 Cases
The Conference Board, a private research group, said its index of consumer confidence fell to 96.1 this month, from a revised 101.4 in October. Economists surveyed by The Wall Street Journal had expected a reading of 98.0. (…) This month’s consumer confidence data is based on survey responses collected Nov. 1-13.
Data from private firms suggest that consumers have begun pulling back in spending on services that require close contact with others. The volume of seated diners tracked by OpenTable, a restaurant reservation platform, reached its lowest level since mid-August. Google data on people’s movements shows trips to retail stores and restaurants are at their lowest levels since June. (…)
Haver Analytics adds:
Over the last 25 years, there has been a 51% correlation between the level of confidence and the y/y change in real consumer spending.
The index of expected conditions in six months fell 8.9% (-10.8% y/y), the fourth decline in five months. Expectations have fallen 15.6% since June. (…) The present situation index eased 0.3% in November, after having risen in October to the highest level since March. The decline reflected a lessened 17.6% of respondents who felt that business conditions were good and a lessened 33.5% who felt they were bad. The labor market was perceived as slightly better with the “labor market differential” (jobs plentiful minus jobs hard-to-get) remaining in positive territory. Jobs were viewed as hard to get by a steady 19.5% of respondents, down from 34.5% in April. (…)
U.S. Home-Price Growth Accelerated in September Index of average home prices in major metropolitan areas rose 7% in year ended in the month up from a 5.8% annual rate the prior month.
(…) The Case-Shiller 10-city index gained 6.2% over the year ended in September, compared with a 4.9% increase in August. The 20-city index rose 6.6%, after an annual gain of 5.3% in August. (…) A separate measure of home-price growth by the Federal Housing Finance Agency also released Tuesday found a 9.1% increase in home prices in September from a year earlier.
SURVEYS SAY!
We have seen how strong Markit’s November flash PMI surveys were, contrary to other parts of the world. Markit explains:
With the exception of April this year, at the height of the pandemic, the divergence between the US’s expansion and the Eurozone’s slump was the widest seen over the past two decades (using ISM data for the US prior to 2009). This divergence came at a time of rising COVID-19 infection rates in Europe and the US, though it was only the former that saw governments act to contain the spread of the virus.
IHS Markit’s COVID-19 Containment Indices, which use a basket of measures to assess the extent to which economies are ‘locked down’ to fight the spread of the virus, rose sharply between October and November in the Eurozone and UK (indicating tighter restrictions, but fell in the US (indicating looser restrictions).
The Containment Index for the Eurozone rose from 40 in October to 60 in November, rising in all four largest euro members (though most aggressively in France), and increased from 41 to 67 in the UK. In contrast, the index fell from 49 to 42 in the US. It meanwhile held steady at 19 in Japan, indicating an unchanged level of restrictions.
The biggest divergences in economic performance were seen in the services sectors. Activity fell sharply in the eurozone and UK, and continued to fall in Japan, amid COVID-19 restrictions, which hit hospitality activities, tourism travel and transport especially hard. In the US, however, service sector growth accelerated to the fastest since March 2015, fueled by the reopening of the economy in many states as well as a marked rise in business sentiment. (…)
Whereas the first wave of infections earlier in the year led to a synchronised lockdown (albeit with China having shut down earlier), many economies – such as the US but also importantly including China – have not seen anything like the levels of containment imposed earlier in the year in recent weeks, and have even opened up in many cases. Global demand has therefore remained relatively resilient compared to earlier in the year, benefitting exporting manufacturers around the world as well as those service providers whose businesses are to any extent tied to manufacturing (such as transport and industrial services). (…)
But Goldman Sachs shows that the Fed’s regional surveys don’t agree with Markit’s rising PMI while its tally of its own analysts does.
France demands digital tax payments from US tech groups Facebook and Amazon among companies issued with requests that could trigger retaliatory tariffs
SUPER SPREADERS
On September 3rd, I wrote about the First coronavirus death traced to Sturgis Motorcyle Rally that drew 400,000 people in Sturgis, S.D. in mid-August. The suspicion was that that would be the first of many. Cumberland’s David Kotok followed up yesterday:
(…) we believe that Sturgis was the largest of the super-spreader events that have occurred in the United States – half a million people without any restrictions. (…) a September report from the IZA Institute of Labor Economics, written by researchers from San Diego State University and IZA, estimated that 266,796 additional cases, or 19% of the 1.4 million new cases of COVID-19 in the United States between August 2 and September 2, 2020, were traceable to the rally, based on an analysis of anonymous cellphone data. (…)
The difficulty of assigning COVID cases to the Sturgis event is further complicated when we note that South Dakota had also played host to President Trump’s Fourth of July rally, the state fair, and an early-September Mustang car rally in Sturgis. Bottom line: The state was averaging about 1,100 cases a day by early November, compared with fewer than 100 in much of August and September. (…)
Another interesting way to look at the data is to spend a few seconds watching an animation that tracks the spread of COVID-19 in the US from March through early October. See https://www.savi.org/2020/10/09/animated-map-of-new-u-s-covid-19-cases-over-time/. Watch what happens in the weeks after the mid-August rally. (…)
Two charts sum up the case:
September 1
November 23
David continues:
Note that Donald Trump, Jr., admits testing positive, and his press release says that he’s asymptomatic. Note that he was at multiple events, and you know the Trump pattern of masking (not) and mitigation (not). Now look around at the Trump administration. (…) Altogether, at least 48 White House staff members or associates have tested positive for the coronavirus. (…)
Dear readers, we have a few months to go before vaccines fully arrive. Letting your guard down now invites disease and risks death. Waiting a few months more for these marvelous vaccines to get into distribution is well worth the discipline and patience required. We’re getting close. Please don’t do a mini-Sturgis. (…)
There’s little evidence that herd immunity is helping Sweden combat the coronavirus, according to the country’s top epidemiologist.
“The issue of herd immunity is difficult,” Anders Tegnell said at a briefing in Stockholm on Tuesday. “We see no signs of immunity in the population that are slowing down the infection right now.”
Swedes have been more exposed to the virus than their neighbors elsewhere in the Nordic region, and every third Stockholmer tested has antibodies, according to figures published this week. That’s after the country famously opted against a lockdown, relying instead on voluntary measures. (…)
On a lighter note, also from David Kotok, this terrific musical dance video on one of my favorite songs when I was …so much younger. https://youtu.be/GC9tnARzIbU
Charles Koch: I “screwed up”
In his first on-camera interview in four years, Charles Koch told “Axios on HBO” that he “screwed up by being partisan,” rather than approaching his network’s big-spending political action in a more nonpartisan way. (…)
[P]artisan politics prevented us from achieving the thing that motivated us to get involved in politics in the first place — helping people by removing barriers. I was slow to react to this fact, letting us head down the wrong road for the better part of a decade.” (…)
And yet, the spending continues. Americans for Prosperity Action, the Koch network’s super PAC, is pouring hundreds of thousands of dollars into Georgia, where twin Senate runoffs Jan. 5 will determine control of the U.S. Senate. (…)
FYI: Just 29 percent of Republican voters say they believe the results in Michigan are reliable, similar to the shares who said the same about the results in Arizona, Georgia, Nevada, Pennsylvania and Wisconsin. (Morning Consult)