Week Ending November 20, 2020
Shutdown equals slowdown…Governors from California, New York, New Jersey, Michigan, Illinois, Washington, Oregon, and Nevada all are shutting down or instituting new rules to slow the spread of the virus.
What does it mean – Unemployment has already started to tick up in states that have announced new shutdowns and more rules and regulations to fight the spread of the virus. In California, Governor Newsome instituted a curfew. California just spent $125 million on a new lab to increase testing and provide results for most people who don’t know if they have the virus. If you have symptoms get tested. If you do not, then don’t. I think most would agree. If you do not have symptoms, save the state the money and you the time.
Small business is doing everything they can to stay open. They take all the risk they do not get salaries or have a government pension. Small businesses, employees, and suppliers can not handle more regulation and the added expense and uncertainty of opening and closing based on the constant moving of the goal post by governors.
California Employment… California leads the nation in unemployment claims.
What does it mean – According to the Bureau of Labor Statistics, unemployment claims are up 301% year over year and up 3.47% week over week. Unless you work for the government, the shutdown order by Gavin Newsome is having a real impact on business and employment in the nation’s largest state. It is truly slowing the spread of financial independence, prosperity and the American Dream.
US Private Sector… According to the Flash PMI Data, private sector rose at the quickest rate for over 5 and-a-half years to a five-year high of 57.9 in November from 56.3.
What it means – This suggests that the third wave of virus infections is not proving to be a major drag on economic activity leading up to the November release this week. At that level, the index is consistent with GDP growth slowing to 4% annualized in the fourth quarter due to constraints by COVID-19 and certain state slowdowns that persist.
Retail Sales… A bit of a pull back, but the American consumer is still alive and well.
What does it mean – Online sales continue to outperform and looks like folks are hitting the holiday shopping a bit early via Amazon and Shopify. All the major big box stores and online retailers are declaring the whole holiday season as Black Friday.
Existing Home Sales… Increased 4.3% month over month in October to a seasonally adjusted annual rate of 6.85 million homes.
What does it mean – Survey says…we want out of the city. More people continue to move out of large cities for the burbs. Safety concerns and the need and want for more space is driving many from big cities to the burbs. When asked, many folks have accelerated their move due to how cities are handling COVID-19 and the increase restrictions.
It is a sellers’ market. Even in a very tough environment the attitude and perception of life outside the city is transforming the real estate market. Inventory is at a 2.5-month supply and 72% of homes sold in October were on the market for less than a month.
Thanksgiving… We live in a blessed country. Generous beyond belief even in our most trying times. Take a moment and remember the first Thanksgiving. With less than 50 people still alive, our forefathers took time to give thanks. To recognize the gifts, they have and the opportunity before them.
Let us give thanks for all we have and recognize there is nothing we can not accomplish when we have life, liberty, and freedom to pursue happiness.
Yet, there are many who need our help. Discouraged or in need of a helping hand, a warm meal or just a smile or someone to listen. If you can serve or give of your talent and treasure – We have an incredible homeless issue that has risen dramatically throughout our country and specifically here in California due to the virus and loss of jobs. Our family has traditionally used this opportunity to support charities and to serve the needy. Yet, due to COVID-19, I am aware that many places are putting restrictions on how we may be able to help serve and provide needed meals and assistance to those less fortunate.
I urge you to give through your church, synagogue, temple or through community organizations like Rotary or Knights of Columbus. Here is a list of events in LA that could use your time, talent, and treasure. https://www.lamag.com/citythinkblog/giving-back-where-to-volunteer-on-thanksgiving-day/
Please take this opportunity to search for places in your community that could use your help.
Have a great Thanksgiving.
Doug De Groote, CFP®, MBA, CTC