This week was epitomized by two topics, again: Stock Market Volatility and the Wuhan Virus. The virus started in the Wuhan China. It is not racist to call it the Wuhan Virus or the Chinese Coronavirus or COVID-19. If this sounds familiar, it is. The Wuhan Virus has been a part of this column for well over a month. This week we received remarkably good new home sales data. This week we received remarkably bad first-time claims data. We also received the third reading on Fourth Quarter GDP. We also received not one, not two, but three Congressional Coronavirus Stimulus packages. Their motto should be ""Nullum discrimen desertam." Let no crisis go to waste.
(March 23) The week started with an article on the Wuhan Virus. "36,000,000 Versus 2,174" referenced the difference between the number of US cases of the Annual flu this year versus the total cases of Wuhan Flue in the United States as of March 14, 2020. This data was chosen because it was the most recent date of the CDC report of the annual flu.
(March 24) The media has been ignoring or dismissing the economic data released this month, covering the month of February, as "rear looking' or "BC," Before Coronavirus. One report that should have received high praise this week was the February New Home Sales Data. New Home Construction and New Home Sales are indicative of a growing economy. "Feb. New Home Sales Soar BC" highlighted the best new home market during the month of February since February 2007. We saw a spike in new home sales and an all-time average sales price record set.
(March 26) It took the worst first-time claims data in history in order to get the weekly first-time claims data back into the news. "Historic First-time Claims" reported on how the consecutive weeks under 300,000 seasonally adjusted claims streak crashed and burned after 262 consecutive weeks. It compared this week's 2.8M non-seasonally adjusted first-time claims with data from 2008-2009 and 1981-1982. It could have also been compared with data from 2009-2010 during the Swine Flu Crisis. It also called to attention the rarely mentioned Insured Unemployment Rate (IUR) which compares the number of continuing claims with the number of covered insured. This data will spike next week. Even so, the NSA IUR should remain below the peak of the Great Recession
(March 26) Buried with the news regarding the huge unemployment claims data was news that the final revision to the fourth quarter Gross Domestic Product (GDP) was released. This was the "final" revision of the fourth quarter GDP until next Summer when the annual revision takes place. "Final Fourth Quarter GDP Steady at 2.1%" details how the seasonally adjusted annualized GDP is 2.1%, the same quarter GDP is at 2.3%, and the annual rate for 2019 was also 2.3%. It was curious that the Personal Consumption Expenditures grew at just 1.7% quarter to quarter. This doesn't match the seasonally adjusted MARTS retail data. It is also a slower growth than the rate of inflation. This article also explains how we could have our a very strong first quarter GDP, based on New Home Construction, New Home Sales, Existing Home Sales, and Retail sales all outpacing where we were after two months during 2019 (Schumer Shutdown Numbers.) It also explains how the Jobs Number may not reflect the end of the month jobs and unemployment data because the data should have been collected BC.
Speaking of the Wuhan Virus, the data continues to be collected. There appear to be some existing medications that shorten the length of the Wuhan Virus and the severity of the symptoms. This may be a short, painful, period of turmoil. All treatments with new/existing drugs should be done under physician supervision.
The Wuhan Virus is no longer contained to China and Europe. It is being found in more countries than I care to count.
We need to take the flu seriously. We also have to learn something from this outbreak how we can manage the common flu without shutting down the entire economy.
Next week we will receive the March Jobs Report, which should be BC, Before Coronavirus. If we are lucky, employers will recall their workers prior to the April 12th data collection date for the April Jobs Report. Stay Calm.
It's the Economy.
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