Week Ending September 18, 2020
Durable Goods Orders for August… Not as good as expected but not bad.
What does it mean – Durable goods orders increased 0.4% in August the consensus was +0.9% following an upwardly revised 11.7% increase (from 11.2%) in July. Excluding transportation, orders were also up 0.4%, the consensus was 1.0% following an upwardly revised 3.2% increase (from 2.4%) in July.
Non-Farm Productivity… Q2 Productivity growth bounces back.
What does it mean – Productivity was revised to an annualized 10.1% from the advance estimate of 7.3%. Unit labor costs were up 9.0% versus the advance estimate of 12.2%. This is the largest gain since Q1 1971.
August Industrial production increases… For the fourth straight month industrial production has increased.
What does it mean – We are climbing back but still 7.3% below its pre-pandemic February level.
New home sales go over 1 million… New home sales in August did something they have not done since November 2006 — exceed a seasonally adjusted annual rate of 1.0 million.
What does it mean – We have been pointing this out for the last couple of months. Since the pandemic, people are seeking safety from riots and looting and more room and space from overcrowded cities. The suburbs and states in the south that have low taxes and are open are the biggest winners. Specifically, they rose 4.8% m/m to 1.011 million the estimate was 875,000 and were up 43.2% yr/yr.
Conference Boards Leading Indicator… The Conference Board’s Leading Economic Index (LEI) increased 1.2% in August following an upwardly revised 2.0% increase in July from 1.4%.
What does it mean – The increase for August represents the fourth straight month the index has been positive after declining 7.4% in March and 6.3% in April. Almost across every measurement, the economy has been recovering and growing nicely for the last 4 months. Now, if we can only get a few of the big states like CA, NY, NJ, IL, MA and a few others to open. Wow…Just think where our economy would be. And just maybe we would not be seeing the looting and rioting that is also destroying businesses in the most vulnerable communities.
Corona Virus Survival rates… This past Friday evening the CDC released the latest Coronavirus survival rates.
What does it mean – Here they are broken out by age groups:
Ages 0-19: 99.997%
Ages 20-49: 99.98%
Ages 50-69: 99.5%
Ages 70 +: 94.6%
I am not a doctor, but the statistics seems pretty simple. We need to protect the elderly and the vulnerable. If you are under 50, the death rate is .02%, not much different than the flu. Looks like a pretty good reason to open the schools, churches, gyms, bars, and restaurants and the rest of us can get back to normal. Nothing better for business and consumer confidence than to know you are in control of your own future.
Have a wonderful week,
Doug De Groote, CFP®, MBA, CTC