Was June as Good as It’s Going to Get in the Pandemic Era?
By Wolf Richter for WOLF STREET.
Automakers have been reopening their assembly plants in the US, hobbled by setbacks, including supply chain issues. Other manufacturers too have reopened their plants. Housing construction is moving forward. Other construction segments are weaker. Oil-and-gas drilling – a vast industry in the US with big impact on equipment manufacturing, construction, real estate, technology, transportation, etc. – is melting down, with big bankruptcies happening now densely together. California Resources, the largest driller in California, filed for bankruptcy on Wednesday, following Chesapeake at the end of June. Ecommerce retail is booming, but brick-and-mortar retail in malls is in a death spiral. So in terms of the goods-based sectors, it’s a very mixed bag. And the freight industry tracks those sectors because all these goods must be shipped.
In June, shipment volume by truck, rail, and air in the US ticked up from April and May but was still down by 17.8% from June 2019, and by 22% from June 2018, according to the Cass Freight Index for Shipments. The year 2018 had been the Good Times for the industry. The year 2019 was crappy and got worse as it went on. In the year 2020, all heck broke loose when the Pandemic hit the industry that was already grappling with sagging demand. June was the 19th month in a row of year-over-year declines in shipment volume:
The Cass Freight Index tracks the shipment volume by all modes of transportation, but is more concentrated on trucking. It tracks shipments of products for consumers and industrial users, but not bulk commodities, such as grains, coal, or petroleum products.
The year-over-year plunges of the index in April and May had been the worst since January and April 2009, which had been the worst in the data series going back to 1990. June was simply less bad. So “don’t call it a comeback,” says Cass in the report.
In the stacked chart below, each line represents a year of the Cass Freight Index for Shipments. The brown line at the bottom represents fiasco-year 2009; the black line on top represents the Good Times that peaked in mid-2018. The red line just above fiasco-year 2009 represents 2020:
Rail traffic digging out from a deep hole
Rail traffic in June was still 14.3% below June last year, according to the Association of American Railroads, but that’s an improvement over the 20.2% year-over-year plunge in May and the 21.2% plunge in April. Of the two categories, carloads were down 22.4%, and container and trailer loads (“intermodal”) were down 6.6%.
Carloads of coal plunged 34.1% year-over-year, continuing its relentless decline that started years ago and was made worse by the Pandemic.
Carloads of crushed stone, sand, and gravel, which includes frac sand for shale-oil-and-gas drillers, plunged 27.1% year-over-year. This is another angle on the melt-down in the oil-and-gas sector. Frac-sand supplier Hi-Crush filed for bankruptcy on July 12.
But the auto assembly plants had reopened and needed components; and they began shipping new vehicles to dealers across the country. For the month of June, carloads of motor vehicles and parts were still down 30.2% year-over-year. But at the beginning of June, railroads were running only about 2,000 carloads of vehicles and parts. By the last week in June, that was up to 13,392 carloads – still down 27.2% from the same week last year, but better than near-nothing in May.
Shipments of other products that go into auto manufacturing, such as metals, glass, and plastics, had also bottomed out in May, with carloads starting to tick up in June.
Intermodal volume improved more significantly, and in the last week of June was down only 5.1% from a year earlier.
For trucking, new outbreaks create “uneven freight recovery.”
Average spot rates for dry van trailers in June – after a tough April and May for truckers – rose to $1.81 per mile, excluding fuel surcharges, up from $1.60 in May, according to DAT.
But those gains might come under pressure going forward, due to the new outbreaks of Covid-19, according to a blog post by DAT, which sees an “uneven” freight recovery “as some regions are forced to slow down reopening plans and consider more lockdowns,” while other regions “are seeing more economic activity return, like New York, Massachusetts and Connecticut.”
There are now signs that “dry van rates may have peaked and could drop back, as demand decreases across the board along with the re-closures in California and scaling back of reopening plans in Texas, Florida and Arizona,” DAT’s blog post said.
It cited Geotab daily commercial truck trip data that had peaked on June 25, “the only time capacity has been at or near pre-COVID-19 levels,” but then the daily trips began to decline again. By last week, compared to the pre-Covid February baseline, daily trips were already down 10%, which took them back to the May 18 level.
So, was late June as good as it’s going to get in the Pandemic era? The decline in daily truck trips is one more indication that the recovery is going to be “uneven,” as DAT had put it, and a drawn-out process with many ups and downs, and not at all straightforward.
Torrent of 2.4 million people filed their initial unemployment claims under state & federal programs during the week. PUA claims by gig workers now 45% of total unemployment claims. Many people are hired back, but many are newly laid off. Labor market recovery remains hard to discern. Read… 32 Million People on State & Federal Unemployment, 2nd Highest Ever: Week 17 of U.S. Labor Market Collapse
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With spikes in the fast reopening states the economy will have been beat down for so long that it will take forever to get going in the other direction. Like turning an oil tanker. Enforced closures won’t really matter because when things continue to go down hill people will self isolate. We really lost the opportunity to have a coordinated and successful reopening.
We never had a chance at a coordinated response. That takes leadership and courageous.
It takes leadership, planning, and coordination from the Federal government to actually implement the kind of response we needed months ago.
We won’t get this kind of leadership until January at the earliest.
I wouldn’t bet on it. We might end up getting four more years of Russia this and Russia that.
I have no expectations of real leadership from either side.
I have to agree about lack of leadership. We haven’t had much from the top as most people running for those positions are not seasoned leaders. And, they are really in it for the power and money.
While ventriloquism bashing is nothing new, great ventriloquism can change all of that.
God, it’s just laughable referring to this as a “recovery”. It’s like a cancer survivor with a lung removed. Larry Kudlow is an absolute idiot, bull$hitter. This is far worse than 1930, AND we are having a second wave in unemployment. Here comes them severance packages…
Brazil – pop 210M – 72,000 covid deaths – no lockdown
UK – pop 66M – 44,000 covid deaths – severe lockdown
I would have thought that given Brazil’s inferior health care system and poverty levels, they’d have far more deaths per capita than the UK.
Odd
Most numbers can’t be compared. The way of counting differs, if there is counting at all, to begin with.
And Brazil not being in lock down is not true. The president was not in favor of lock down, but most governors were and did lock down their areas.
Brazil and the UK have one thing in common and that is that they were lazy to implement measures.
There’s a lot of risk factors that should be taken into account that we probably don’t know about yet, but one that seems to have been flagged up relates to vitamin D deficiency: if you lack vit. D, you are seemingly more seriously affected if you catch covid-19.
The UK has a bad reputation for not having sun, having lots of rain etc, but bad reputations are always based on something… Vit. D levels in the UK population are probably quite low due to this, but the general health of the population isn’t that great either.
Brazil has plenty of sun, and therefore it’s population presumably have higher vit. D levels than that of the UK.
Is this a factor? Probably. Certainly it’s not the whole story by any means though.
Fair point, SwissBrit. Vitamin D deficiency is a particular issue in Asian and black communities in the UK and they’ve been hit”hardest” by this bug ie. some of their elderly with long term conditions have died a few months earlier than expected.
There are to many deaths for it to be only “would be death in a few months anyway”.
A big difference between the English and BAME communities is that they are much more religious. That is more important than vitamin D
Natural cultural distancing possibly plays a factor in some countries and demographics as well. People from many Latin American, some southern European and far eastern countries tend to stand much closer to each other physically when socializing than many northern European and European Americans. Etc.
But that contraction is mostly temporary. What is important is GDP in 2022 and keeping more open does IMHO not help with GDP numbers in 2022. In fact i think that it will lead to more closed businesses.
The numbers can be surprising. Russians are remarkably unhealthy. Their life expectancy is way down the list with tinpot African s**tholes. However, they are faring much better with this virus than the citizens of much healthier nations. Go figger.
OK, figger this r2/3s:
Russia is lying about their numbers, right along with most places in the world today…
i have figgered from the first that whichever nation/country came through this virus event with minimal death, destruction, and, especially ”distraction” was the nation/state that started it and knew very well how to deal with it from the very beginning, etc., etc.
figgering now that is becoming fairly clear, even for folks who don’t ever figger out nothin, eh
Vietnam?
Arkansas?
I would not trust the #s coming out of a country run by murderous crime-lord Vlad Putin. I don’t trust the official #s coming out of the USA or especially a state like FL. This is just common sense and part of the problem of analyzing Covid-19.
What an ignoramus Roddy you are. Russian LE is 72, US is 78………wanna guess how much the US throws per capita into the our completely inefficient, bloated, corrupt healthcare system compared to Russia? Russia approximately $600 and USA approximately $12,000!!!! Wanna guess how many engineers (native born Russians) and scientists Russian universities graduate every year compared to the USA? Wanna compare how many Russian kids master basic math by the time they graduate vs. American kids? And how much Russia spends per capita on education vs. the USA? Go FIGURE!!!
but, but, but American kids are much better at getting in touch with their feelings!
Hmmm Willy.
Canada population 38 million
Total cases Covid = 109 thousand (most in Quebec and Ontario)
Deaths 8800
Total lockdown for initial response
Now back to work in almost all sectors
I’m picking up building materials today. Go figure. Lumber brought in by truck and rail. hmmmm
\Odd
The benefits of living in a sane nation with a sound leader and citizens who don’t perceive science as the devil (as roughly a third of ours do, sadly).
I wouldn’t call our current federal leader “sound” by any stretch, but he was adequate to this task at least, as were our provincial premiers. When the chips were down, our leaders made the tough decisions early, and acted on them quickly, with little bickering or finger-pointing. It made all the difference.
So far. We saw a very slight resurgence in cases today in some provinces. I hope it is not a trend.
Deaths in the UK are currently rising slowly while deaths in Brazil are rising rapidly. Comparison is only valid at a similar point in the progress of the disease.
Also, some Brazilian healthcare workers are reporting that the official numbers drastically under report because the overwhelmed hospitals are an embarassment to the central government. In many rural areas, there isn’t much in the way of medical facilities anyway.
I just googled Daily Death Rate Covid Brazil.
The highest death total was on May 27. The numbers have been flat since.
Willy Winky,
If you look at the chart, the deaths per day numbers have been essentially flat since the beginning of June, at around 1,300/day
https://www.worldometers.info/coronavirus/country/brazil/
Willy Winky,
Your statement in this comparison — UK “severe lockdown” — is manipulative falsehood.
The UK went for “herd immunity” at first, encouraging infections.
And only when they realized that they had a huge outbreak with lots of sick and dying people, they then belatedly went into lockdown. It helped that the prime minister ended up in the hospital too, so then they started taking this thing more seriously.
Wolf, your disciples are here because of your broad background and gift for precise collection and presentation of factual info.
I’m sure it’s annoying to encounter, day after day, specious statements from us, but I don’t think most of it is “manipulative falsehood”.
All options are bad but NZ clearly choose the best policy for its economy. That it saves his grandpa is incidental. NZ just has to find a way to make income and expense be somewhat the same without to much social upheaval. An UBI or a period of high inflation may be what is needed.
The NZ should impose 90% tax on all rich newcomers and natives can kick back for a while.
Poorer countries typically have a much smaller 65+ population than wealthy countries, and the ones that do make it 65 will have fewer health conditions (e.g. high blood pressure, obesity) that diseases of affluence.
Media Age Brazil 32.6 —UK 40.5
The difference is significant however quality of healthcare in Brazil would be far inferior to that of the UK.
I’ve been to the barrios of a couple of cities in Brazil — and they are grim. There is nothing remotely close to this in the UK.
If we do a checklist on this:
Brazil
Positives – younger population
Negatives – no lockdown, weak healthcare
Surely one would not expect the death rate to be nearly 3/4s lower per capita in Brazil vs UK….
This is a good interview… it is basically what Michael Burry (who is a trained surgeon) said.
Google: Coronavirus could be ‘exterminated’ if lockdowns were lifted
Knut Wittkowski, previously the longtime head of the Department of Biostatistics, Epidemiology, and Research Design at the Rockefeller University in New York City, said in an interview with the Press and the Public Project that the coronavirus could be “exterminated” if we permitted most people to lead normal lives and sheltered the most vulnerable parts of society until the danger had passed.
“[W]hat people are trying to do is flatten the curve. I don’t really know why. But, what happens is if you flatten the curve, you also prolong, to widen it, and it takes more time. And I don’t see a good reason for a respiratory disease to stay in the population longer than necessary,” he said.
Negatives: Rightwing neo-conservative government.
It is the ideology of the government that makes Brazil such a disaster with Covid. Not that they were fucking up their economy beforehand. Being a food exporter and allowing and pesticide to be sprayed is not a good way to keep your export market.
“permitted”? What he means is force people to live the same way as before because because otherwise there are to many people who select private isolation to ever get to herd immunity. Especially because corona viruses are not known for longterm resistance.
why would one think Brazil counts accurately?
How many more lockdowns can any economy endure?
Time to think about a more targeted approach?
Time to think about “everyone” — from the President on down — wearing masks when in public within 30 feet of anyone. And don’t go to mass-spreader events, including crowded bars.
With masks and smart coordination, we wouldn’t even need a lockdown.
But Americans of this era are pretty dumb. They view the world in a purely binary way i.e. left vs right, mask or no mask, all open or nothing open, etc. No subtlety whatsoever.
There’s an article over at Slasshdot about how Homeland Security is worried that face masks will break most facial recognition systems. I guess most of these system rely on the dimensions of the nose, mouth and chin. Covering two thirds of your face will cause a lot of problems for these systems. This alone will have a lot of the right wing “Q” crowd start wearing masks and continue to wear them long after Covid goes away.
I actually like wearing a mask when I go shopping for that reason. None of the surveillance cameras know who’s hiding behind that mask and hat. In Japan, they wear masks a lot — always have — to not spread their cold or flu to others. I might make that my standard policy here too. I hate facial recognition technology, and nothing is more fun than to mess with it :-]
So True!!!!!
Some facial recognition work with mask. Besides there is also gait recognition. And those systems don’t have to be that good to work for the question is person X the mister Y on this small list of possibilities.
Include massive protests and rioting into that as well. I seem to recall those gatherings in most major cities too.
We had a BLM protest go by our building in San Francisco and we had the bird’s eye view on it: almost everyone wore a mask, and most of them walked alone, or in twos or threes, spread apart from others and doing the “physical distancing” thing. Clearly, they were trying to be smart about it. Not all protests were that way, but that’s what we saw.
It’s past time for that, but when so many Americans despise science (and education, for that matter), think all government is out to get them, and are so selfishly “self reliant” they won’t listen to anyone but themselves (not unlike children) we will NEVER see everyone wearing effective masks in this country. The holdouts will have to die or develop immunity (which seems to be short-lived, as with every other coronavirus ever studied). Long story short, this will get worse for the next 6-8 months. From the parasitic perspective of COVID-19, in other words, the good ole USofA is definitely great again!
When we reopened South Carolina, we didn’t mandate occupancy limits for restaurants (we don’t have only-bars); 50% was simply a guideline. For the Memorial Day and 7/4 holidays, the touristy bars were literally elbow-to-elbow, no masks, recirculated HVAC air. Everyone was so worried about surface-to-surface transmission (wiping credit card keypad after each use, lol), when it’s the HVAC systems…
Hate to be contrarian … however everyone has been wearing masks in Hong Kong since the virus hit
The city now has its third wave and the infections are worse than ever (11 people have died!) Everything is shutting down – again.
This is destroying the morale of the people — and that of business owners.
The minute they get a whiff of hope (e.g. restaurants and bars reopen and people start to return), the virus fires up (viruses are funny like that) At some point you just raise the white flag and shut for good.
I am in the camp of ‘protect the at risk’ — the elderly and diseased — they can lockdown and wear masks.
But healthy people need to just get on with it. Because the alternative will get us a far worse outcome.
We probably have already crossed the Rubicon… I cannot see how we make our way back from this
11 people? Wow.
While in San Antonio and Phoenix they are using FEMA refrigerated morgue trucks.
Can an economy endure a situation in which the state does not perform a lockdown but the civil population does one on an individually basis?
Target approach: Lock up everybody for who an infection is to dangerous.
So everybody who is above 55 or frail for 6 months or so. A 8 week lockdown sounds cheaper to me with less economic dislocation and with the bonus of less sick and death.
Send me lots of free money and I’ll stay home.
Wolf,
Thank you for the periodic, big picture macro stats…they are very helpful in estimating GDP growth and therefore highlighting questionable outliers in individual companies’ revenue/earnings growth.
Signals like these from the transport sector look to me like early signs of an imminent volcanic eruption. Like very small earthquakes beneath the volcano, slight inflation, or swelling, of the volcano and increased emission of heat and gas from vents on the volcano come before the great eruption that buries Pompei. Or Yellowstone :-)
M.N. Gordon at Economic Prism described the sequence of economic collapse succinctly. “…Supply chain disruptions followed by retail disruptions, followed by declining sales, followed by disappearing cash flow, followed by layoffs, followed by business closures, followed by shrinking tax receipts, followed by unserviceable public and private debt, followed by mass bankruptcies, followed by riots, followed by full societal breakdown…”.
We ain’t seen nothing yet.
Quite true, and that process was put on ‘Fast Forward’ by the initial lock-downs, soon to be exacerbated by the new wave of forced closures and disruption……
We are seeing things slowly unwind. Everything is connected, as inferred in the quote. It took about three years for the market to move from apex to nadir in the early 1930s.
Great Depression II, but with more social unrest. Not gonna be pretty. Yeah, I’d move out of the cities too. Suburbs might not be far enough away, either.
Was late June as good as it’s going to get? Well, is your brain stuck now playing and enless loop of Peggy Lee singing “Is That All There Is”? Thanks Wolf, I hated that song! Geez, can you now tell us all a story about the coming of the worst Christmas ever? Or how places like Pacific Ocean Park will never return?
well not normally a positive person, esp this year, but there was this holiday in the US called July 4th (used to be called independence day, but that’s become sad joke this year), so late June would ramp up for the holiday and then lots of people take off (including truckers, warehouse, etc). Let’s wait 2 weeks (yes, intended) and see how end of July compares to end of June, that will be much more meaningful IMO.
Is this the way it happened in Rome or the Mayan empire? The real enemy being the lack of cooperation and greed. This is certainly not “Our Finest Hour”.
While we’re all bemoaning our lost lifestyles, I just saw a group of Mexican workers brick an entire large house in one day in 100 degrees sunbake. One can look down on these people all we want, but they are willing to work their ass off and know the meaning of an earned dollar.
It’s no wonder we’re sitting back and watching the economy fall off the cliff.
Brant Lee,
Excellent comment.
Capitalism is supposed to be reward for honest gains, or as my Dad used to say, “An honest days pay for an honest days work”.
And my Dad was an American from farming Minnesota.
Today’s version of capitalism doesn’t resemble much of the grift and graft that is yearned for and promoted. Hell, people spend 100K per year of their folks money to buy a ride to the top at a big name university. Apparently, some parents will even go to jail for it.
No surprises watching this slide into the toilet. There are no freaking shortcuts or magic passwords into ‘exceptionalism’. Hard work and luck/timing used to be the recipe. Or a good idea at the right time, plus hard work.
“And my Dad was an American from farming Minnesota.”
Mine too, Warren County.
A great place to be FROM!
I meant Warren, in Marshall County.
I think these are bad comparisons. Were these Minnysoty farmers originally part of a closed community with its’ own support network? What happens to American labor when you isolate individuals from any population group and send them into cutthroat competition? Knowledge of the reward from hard labor does not itself imply a real understanding of the value of each dollar gained above the cost of obtaining it. Can Latino laborers adjust to the potential squeeze of reduced spending and downward wage pressures? Can American farmers adjust to falling prices if demand drops out? Realities tomorrow may be far different from what everyone was expecting, but is anyone completely adjusted for what may happen?
In my neighborhood here in Central FL, the heat is usually intense and yet the Mexican and hispanic construction workers who have constructed hundreds of homes in the last two years work about 12 hour days, quite often 6-7 days/week.
It’s amazing that Americans have seem to have abdicated on anything that looks like a work effort. It’s a bad situation and as long as we are in lockdown, there is no way out! I did not think I would see the current situation in the US. I thought it was what people years ago called ‘conspiracy theory.’ Well, the theory part is over and we have moved to the execution stage.
“It’s amazing that Americans have seem to have abdicated on anything that looks like a work effort.”
I guess it depends where you’re at. A lot of hardworking loggers, builders, tradesmen, etc — all locals — where I live. These guys work dawn to dusk, sometimes starting at 4 AM. Granted, winters are slower, but the work ethic is there.
Involved in Construction Industry in FL since early 50s era S, and besides being mentored and working side by each with black men from then to retirement,,,
I watched as my older black friends were sidelined and retired when hard working foreigners, ( not just latinos, ) were willing and able to do the same work for cash under the table less than half of what black and white workers in our state had been getting, and needed to get to pay their rent and other expenses.
Many retired in the era of early to late 90s, and have not returned,,, many more of WE the PEEDONs of FL and USA found that it did not pay much at all to try to compete against folks willing to work for $5 per hour or less in some cases in those years, and have also not returned.
And to be sure, it was the ”developers” and their, usually, puppet ‘contractors’ who profited the most by way of the 4 and more level contracts that allowed only the GC with the permit to have the proper insurances to pull the permit in the first place, then contract down the line to the ”labor contractor” who had not insurances at all, but supplied the cheep cheep labor to make all the profiteers above happy…
Time and enough for each and everyone of us to make sure all workers at all levels are insured, and not just the company/contractor you sign with.
The best thing is that when those workers get hurt on the job, you just drop them off at the local hospital and hire some new workers.
It’s good to be the king.
Who’s “we”? I’m not watching any of the sort. I’m watching an economy produce 4M jobs a month, a booming housing market, a rising stock market and an economy that is close to firing on all cylinders again after a Corona blip.
You have a choice. you can participate in this economy and make money. or you can sit on the sidelines complaining. But if you choose the latter, in 5 years from now, don’t whine that it’s impossible to make money these days because the system is corrupt or whatever.
Just Some Random Guy,
You seem to be drinking early in the morning these days :-]
I don’t drink much. The occasional beer here and there. But I do hang out at bars a lot, ironically enough. All my friends are alcoholics, LOL.
Please detail those parts of the economy that are doing great and hiring new workers. I just got an auction notice in my in-box this morning for a huge manufacturing plant in Oklahoma. The auction is being handled by a company that specializes in distressed asset sales to get a few cents on the dollar for creditors. The company getting its stuff auctioned off was secret, but a simple look at google street view told me it is Cameron Services, a major division of Schlumberger, the big oil field servicing company. I can’t think of a single industry or service short of Amazon, and grocery stores that are doing well. The pumpers always seem to be short on details.
The swimming pool industry is doing well right now… but I think it is a temporary boom. With all of the stay at home orders a lot of pool owners are replacing and upgrading Heaters, Heat Pumps, Filtration Pumps, Water features, Filters, Lighting Systems, Pool Covers, Chlorine Generation Systems, Pool Chemistry Monitoring Systems, Pool Automation Systems, etc etc.
Charlie…. is that you????
You really need to heed your own advice and stay off the crack pipe….
Wolf beat me to it ?
Right on Just Some!!! ASAP we must get all those bartenders, baristas, wait staff, hotel services, etc. people back to work! You know, pretty much all the jobs that were created over the past decade. Day traders with smartphones are still doing ok.
Our parents/grandparents stormed the beaches of Normandy and Iwo Jima to battle tyranny. Their parents endured the unspeakable horrors of trench warfare and the deprivations of the Great Depression. And yet, we can’t manage to isolate ourselves for just a few months and wear a mask whenever we go into a public space? People are seriously protesting these measures?
We’re watching the collapse of America in real-time, cheered on by the people too stupid to take even the most basic of precautions in the midst of the worst pandemic in a century.
GM,
I agree with you. The collective sense of ‘us’ was lost with the boomers and has continued to weaken.
Generations change; society and culture simply reflects those changes. We are becoming post-American in our own country.
I beg to disagree. Boomers have had a collective sense of ‘us’ since the 1960’s and still do. Some of them died because of it (Kent State). It is the subsequent generations that have ended up ‘talking’ to each other with their thumbs while in the same house and playing video games for hours with other isolated gamers.
Accurate generalizations are difficult.
Could be like the Professor Groeteschele character musing in Fail Safe, the surviving insurance accountants vs. the prisons convicts after a nuclear war.
I’d place my bets on members of the Chicago Teachers Union coming out big winners, certainly not on CPD.
If somebody isn’t on the multi trillion dollar gravy train then why should they care? Not everybody is working at home or has a government job or getting unemployment.
your “we” doesn’t include me
Paraphrasing: “(My) parents endured the deprivations of the Great Depression. (and I) … manage to isolate myself for (as long as necessary)”.
“We’re watching the collapse of America in real-time, cheered on by the people too stupid to take even the most basic of precautions in the midst of the worst pandemic in a century.”
Sounds like thinning of the herd to me.
Wolf said:
“Housing construction is moving forward.”
It isn’t just moving forward. It is driving at 100MPH with the pedal on the floor. For June, new house purchases were 55% higher than June 2019.
Just Some Random Guy,
Where did you get this data point? Please post the link.
I’m not aware of new house sales data for June being available yet, but I will stand corrected if I missed it and you can show it to me.
Lawrence Yun makes up his own statistics.
Yuk yuk!??
I thought you said you don’t want to give free clicks, so I don’t post links. Google new home sales 55% and you’ll get plenty of hits.
This is from CNBC:
“Sales of newly built homes jumped 55% annually in June, according to a monthly survey by John Burns Real Estate Consulting, which has historically mirrored the U.S. Census report.”
Also related:
“In a JROC survey that ran from June 5 to 9, 5000 respondents were asked why they purchased a home in the last two months. 69% cited COVID-19 as their main reason while 31% had already planned to buy a home prior to the outbreak. This shows how powerful of an impact this public health crisis has had on people’s living arrangements.”
What isn’t mentioned but implied: Cities are DOA. Suburbs and small cities/towns are on fire and will continue to be so. Nobody is buying a home BECAUSE of Covid and buying in a big city. This is a mass migration away from big cities.
It’s ironic that the people pushing the Corona lockdown the hardest, are politicians in big cities who will in the long run suffer the most.
OK, thanks, I got that email from John Burns Real Estate Consulting a few days ago. I’m on their mailing list. Now I remember (so I dug it up).
This is what the email said about it: “new home sales in June exceeded those in the same month last year by 55%, according to our survey that captures ~21% of all new home inventory in the country.” And then it went about sorting through who was buying what in June. The Census data will come out in a few days. It will likely show an increase of new house sales too, but 55% yoy I think that is a push.
When I google that I get one result (the CNBC article) — absolutely nothing else.
And that number is coming from a single source – John Burns Real Estate Consulting.
Never heard of them. Maybe they are a ‘gun for hire’ in that they make their research available for a price to those with vested interests in need of positive spin?
30+ million people have no job.
Tens of millions will be scared of losing their jobs.
There are record viral cases reported almost every day forcing re-lockdowns across the country.
Forgive me if my common sense meter is telling me that this situation is NOT bullish for property.
Perhaps if I were to find a meth pipe and inhale strongly I could … turn off … that common sense meter and give you a virtual high five agreeing with your analysis.
@Wolf , Unfortunately housing sold prices *are* up in June in very many areas. There was a decrease in foreign buyers for a little while but they seem to have come back and increased again. Multiple bids on overpriced houses. Possibly due to the recent Chinese stimulus money. Possibly also due to US stimulus money leaking into residential RE purchases. There is no other reasonable explanation. The urban to suburban migration does not account for it all.
Much higher new home sales numbers- especially those already built, and lower existing (older) home sales numbers points to Chinese buyers.
The problem with these buyers is a lot of them neither live in the homes NOR rent them out. Nor do they sell them. Many of them just sit and rot. I know- I’ve tracked down owners in an attempt to buy one. They are merely vehicles for money laundering, capital fleeing from China and a peculiar and wasteful Chinese “ghost town” idea of RE “investment”. In China houses are worth much more empty- even gutted. In many cases that investment does not produce money except when traded and the properties are not used or maintained. See- any explanation selling the idea that units in ghost cities are a good investment. It’s real.
Also, possibly this time- people from Hong Kong. I know I would if I lived there…
Because the US ghost houses seem to rarely be sold on the MLS no one knows how many zombie houses (of any kind) are out there Sitting empty and rotting. What percentage of our housing is in this state? It must be meaningful when a 3% rise in inventory means something.
Chinese homes are more concrete. American homes more plywood. Concrete can survive no upkeep much better than plywood.
@char – Not when the mix has so much sand in it that you can poke your finger in a wall after it’s cured.
Lisa_Hooker
Yep, a whole other level of ghost.
Also- I just randomly traced a buyer of multiple homes online and that company is linked to a company that is a shell buyer for a major Chinese company… Nothing at all is clear- but it’s there.
Its amazing what’s going on in the US these days. People just don’t get it. Yesterday we recorded 77,000 new cases. Dozens of Hospital ICUs are at capacity already. Testing can’t keep up with the massive surge in new cases, which are growing exponentially. Deaths are already starting to surge, following a few weeks behind the explosion in new cases.
And yet, 20,000 people attended a Nascar event in Tennessee yesterday, on the same day that state recorded its single biggest 1 day increase in cases. People all over the country are still eating out a restaurants, going to bars, hosting parties, and pretending like we aren’t barreling headfirst into a completely avoidable crisis of epic proportions.
Many are arguing that the only way to “save the economy” is to just pretend that the virus isn’t a threat and to go about their daily lives as normal “without fear.” The rest of us are going to have to watch in stunned disbelief as the results of our months-long lockdown is completely nullified, and we sprint headlong into an economic crisis that will kill hundreds of thousands if not millions of small businesses as we’re forced to endure another widescale lockdown.
The pandemic won’t pass for people who died from it or who carry life-long health issues because of it. It will pass for those that survived unscathed. This whole argument is just nuts.
Social Security will be solvent though. No need to rely on prayers or any other miracles.
“If you wait by the river long enough, the bodies of your enemies will float by. “
“Social Security will be solvent though. No need to rely on prayers or any other miracles.”
Except most of the people now coming down with Covid and dying from it are well below the age of fifty. I’m 63 and retired but with type 2. Right now the only reason I leave the house is for food shopping and doctors visits. Malls, eating out, movies, the gym and Starbucks are all being avoided. I have money to spend but right now I’m on self imposed lockdown.
“If you wait by the river long enough, the bodies of your enemies will float by. “
Well if the Three Gorges Dam fails due to record rains in China that just might come true. If you think supply chain issues are a problem now …. just wait. The term “single point of failure” springs to mind.
BTW – in my earlier message about how face masks were creating problems for facial recognition systems I misspelled the web site name “Slashdot”. Apparently some of the keys on my old keyboard are sticking. Buying a new keyboard will help the economy as well as the companies that ship it to my front door, right. Of course I guess keyboards are now all made in China so I guess I better get that order in quickly.
“Well if the Three Gorges Dam fails due to record rains in China that just might come true.”
Interesting statement. Are there any Mechanical or Construction Engineers on this site, that has/have any ideas on this situation?
“Except most of the people now coming down with Covid and dying from it are well below the age of fifty.”
Total BS – Per CDC website less than 5% of deaths are for ages 54 and below
Yeah but the mortality rate for younger people continues to be lower than older people, so my statement on Social Security continues to be valid.
Why would the Three Gorges Dam be a single point of failure? That dam was man made. So it falls and there will be a disaster, which is sad for the people involved, but will it destroy the country? The answer is no.
It’s working for Sweden….
@WW – yup Sweden is right up there near the top of deaths per million population. Right after Belgium, UK, Spain and Italy. That’s not positive test numbers, that’s dead people.
The can shortage I read about on ZeroHedge a few days ago has hit my area. CocaCola is only stocking Coke and Diet Coke in my local supermarkets. Their other soda brands are not being produced, due to a can shortage, according to their delivery/stocking guy.
I wonder if the pop can supply chain leads back, in some fashion, to China. Seriously.
China used to buy aluminum cans for recycling. I think they stopped doing it because of the sanctions. It looks like we are just dumping the cans in the dumps and not recycling them.
” It looks like we are just dumping the cans in the dumps and not recycling them.”
I noticed garbage pick-up and dump fees rising, probably because of this.
No, it’s 100% a demand issue.
1. Bars/Restaurants are closed; people are staycationing. Boat sales, back decks, swimming pools all through the roof. More retail beer and soda sales == more aluminum can demand. This is the toilet paper issue again. Not enough consumer toilet paper because a lot more people were pooping at home instead of school, airports, and work.
2. Because of COVID and riots, so many people are jumping on the PREPPING bandwagon, and aluminum cans are better storer than bottles.
No aluminum cans are made here in the U.S. and in Canada by Alcan and others. Not worth it to ship empty cans across an ocean in a big ship.
I have just checked aluminum can scrap prices (yes, they are a category of scrap metal): right now the US nationwide average is $0.55/lbs, but mind the price fluctuates between $0.05/lbs in Delaware and $2/lbs in California (not surprised :-D).
By checking against past national averages this is cheap, as throughout the past decade the same average has fluctuated around $0.75/lb. Failing everything else scrap cans for smelting can be imported from Canada where the nationwide average is just $0.33/lbs.
Perhaps there’s a dearth of soft drinks because so many cans are laying in scrap heaps awaiting to be smelted. Or perhaps there are other explanations, such how vendors now want sizable advances (say 40%) before shipping goods. Trust was a good man but Trust-Not lived much longer.
Petunia:
That would be one of the greatest contribution to better health in the US than anything imaginable!
Stay safe and healthy! (Without Coca-Cola!)
It would be interesting to know how much of the transportation drop has to do with the fact there is far less merchandise to ship. I am seeing shortages across the board in a wide variety of items that I have tried to purchase in the past couple of months. I do not know if this is because of trade tensions, or because there are substantial problems with China’s manufacturing that we are not hearing about here.
This has to have a major impact on corporate profits, when consumers are not able to make purchases, even if they have the money to do so.
Corporate profits don’t matter. Did you stonk up?
Monkey Business,
‘Stonks is my new favorite word, btw.
Just like our reality show President, the stonk market (Stonk & P Index?) is really mass-produced entertainment, part of the grand propaganda machine.
One of those weird little cults that we now worship instead of God – the certainty of numbers, that can be manipulated so easily.
Somebody important and sage said that humanity jumps from delusion to delusion, willfully showering itself in the collective ignorance.
Better than looking at reality straight on.
“humanity jumps from delusion to delusion, willfully showering itself in the collective ignorance.”
Don’t know if you are an American? We live in the Land of The Brave here. We don’t do things like that. We stonk up instead.
Shorter KurtZ: I don’t invest and hate to see everyone around me profit so I make fun of things I don’t quite understand.
You stonk up…. I like my money, and would like to keep it a while….
This virus is not going to pass voluntarily, anymore than the flu or hiv. Hopefully, it can be confined in a test tube like smallpox, but it could take decades.
Regarding economic information that I see with my own eyes, I interpret what I see (homes listed for sale than vanishing in days from MLS or listing sites like realtor) as pent up demand and flight from dense cities (Boston nearest to me). Don’t recall listings “vanishing” within days in the past. Usually they would hang out there for months even when contingent. The desirable seem to stay on websites less now, just taken down off the website. So it requires more time to see what’s happening especially longer term, perhaps. Don’t think this portends recovery but a sprint out of the just opened gates.
About every ten days I drive a route that takes me past many big rig dealers. Lately inventories seem huge. Not so for auto dealers. Fewest vehicles in on site inventory I’ve ever seen. Of course, Michigan is unique in high level of leases on the part of the public but satisfying pent up demand may take a while.
Wolf, small typo in 3rd to last paragraph. “truck trip data that hat peaked on”… had for hat.
Thank you for all of your posts, I learn a lot here.
Thanks and thanks.
Wolf,
Curious why you won’t post the Sweden vs France comparison I posted. Same Covid deaths per capita in both countries, Sweden didn’t lock down, France did.
Just Some Random Guy,
Because your statement was purposeful bullshit, and I’m so tired of seeing this manipulative disjointed bullshit. I’m so tired of having to waste my time shooting that shit down. I just delete it. I’m not going to allow you to abuse my site for spreading this type of manipulative BS. There are lives at stake, if you haven’t figured it out yet. This is not a hoax.
Sweden had a MASSIVE voluntary lockdown after the big outbreak and the surge in deaths, and people stopped doing stuff, and the economy got hit too, AND people were unnecessarily dying. People who are using Sweden as a good example are either braindead or manipulatively driving their agenda — in your case, it’s the latter for sure because you’re a very smart guy.
I love how the red staters love to tout Sweden as their Covid idol, when a few months ago it was an evil socialist nanny state. The issue is that no matter what level of lockdown they had, their economic date is just as bad as the rest of Scandinavia and Europe. If you want to see countries where the coronavirus has damaged the economy the least you have to go places like Taiwan, Vietnam or Korea where they locked down early and hard ,wore masks and quarantined all positive tests. My son is in the post production end of the movie and television business and the other day he said, ” Dad I might have to move to Korea for couple of years because they are opening up television and movie production ,but it might be shut down here in the U.S. for a long time.
From the CDC
Age Demographic Sum of US COVID-19 Deaths (2/1/20 through 7/8/20)
Under 1 year 9
1–4 years 7
5–14 years 14
15–24 years 149
25–34 years 795
35–44 years 2026
45–54 years 5650
55–64 years 13808
65–74 years 23866
75–84 years 30369
85 years and over 38048
Total COVID-19 Deaths 114741
The median age of death from Covid-19 is 78 years. Statistics do not support your barhopping crowd or kids returning to school. I know you are trying to stop virus spread but what is really important is virus death.
Getting really sick is what is important. If you are 85 and get really sick you probably die. When you 45 you will probably survive but it will leave you marked. That being marked is in reality for the economy more important.
ps. There is also the issue that doctors don’t work as hard if you are 102 as when you are 40 with a 5 year old kid
TXRancher ,
The average age of Covid patients at San Francisco General Hospital is now down to 41. Similar in Los Angeles, where over half the Covid patients in hospitals are now under 40. You probably get similar stats if you look up Houston.
These people are in the hospital because they’re really really sick. True, the younger ones survive the treatment better, but plenty of them die too, and some of those that survive are marked for life.
Tell that to the people with permanent brain damage, or heart damage, or the hundreds of other permanent health problems caused by this virus.
People who think only the deaths are relevant , are woefully ignorant of the facts..
Another interesting fact is that 42% of the US COVID-19 Deaths occurred in just three states: New York, New Jersey and Massachusetts. Maybe this will provide clues for corrective action next time.
That’s fixin to change, if you’re looking at the stats now. Coastal cities with lots of international traffic got hit first because that’s how the virus was carried in. Now it’s spreading to places like Tulsa.
Another example with Sweden:
Deaths per one million population
Belgium 858.0
United Kingdom 680.9
Spain 608.3
Italy 579.9
Sweden 551.8
Chile 450.9
France 450.1
United States 435.3
You are not looking at the relevant factors, the most important being population density. It is like comparing New York City to Fargo ND. France has 122 people per sq mile. Sweden has 22, Belgium has 376.
Jdog,
It’s the density of urban areas you have to look at. By surface, France is the largest country in the EU, with lots of agriculture. It has vast areas of thinly populated ag land.
France deaths per million: 462
Sweden deaths per million: 556
And let’s not forget that France’s leadership made a point early on of not locking down. Macron made a point of being seen out and about, dining and socializing at cafes and restaurants with his wife, and encouraged others to do the same. The lock-down came only after that initial burst of stupid bravado had run its ruinous course.
Try getting your data from somewhere other than Karen from Facebook, and you might reach more accurate conclusions. Sweden has admitted their approach was wrong. It’s time you did too.
In the interests of staying with the facts … France locked down quite early.
On 16 March (one day after the first round of the municipal elections), Emmanuel Macron announced the beginning of a lockdown period from the 17 March at noon.[97] It was initially planned for 15 days, then for 30 days, but on 13 April, he announced that the lockdown period would be extended until 11 May.[16]
France was actually one of the first countries to lock down (I thought NZ was first but they didn’t shut until a week or so later than France)
Americans may never realize that their country has collapsed. Our way of life is over. Probably similar to the slow decline of an empire, burning in the background as citizens dance? My country now makes me ashamed, and I have never felt this way in 60 year. Ever. I have lived in many states. Currently in Ada County, Idaho, in a Californian enclave filled with morons. Just morons. Not sure what week we are in for this pandemic, but neighbors continue to have visitors from spiking states. Hey, Arizonans! Hey, more Californians! Welcome to our virus free, liberty loving state! Like it’s all a mirage, just a media hoax.
Was reading Mary Trump’s book yesterday and had the alarming thought that our dear leader in D.C. probably invests too much in Norman Vincent Peale philosophy. This may explain the ghastly, abhorrent, lack of leadership and gravity at the federal level. The awful Goya beans photo ops. Or worse, there is depraved indifference, and many people will die this year by design, not incompetence.
Who knows, anymore. My prediction, however, is Sept. 17th, when the effects of summer cascade into rot. A dystopian landscape, with dangerous civil unrest up to and right past the elections. Then it will be a miserable Christmas for most. By New Year, we will finally take mask wearing as a mandate, not a political stance, because there will be no choice.
Virus free?
Idaho is seeing great increases in infections. Per population the infection rate in Idaho is higher than all the neighboring states, including Washington, and increasing rapidly.
I wish people would quick visiting here; and better, moving here.
Be just super if everyone would admit there is no practical, safe place to hide from this virus barring complete isolation. Everyone will likely get this eventually BUT 100% mask usage in public space would make us at least able to function and not overwhelm our pathetic healthcare cabal.
The latest studies are indicating a concerning trend for serious issues with long term effects on survivors. While I enjoy watching a good “come to jesus” moment, ala Chuck Woolery, everyone is at risk for this. That’s not funny.
The economy on the other hand…. that panacea is more illusive.
No, everyone will not get it eventually. Generally at 60% heard immunity, a contagious disease dies out due to inability to spread. The problem is, we are probably only about 15% so far. This thing will get worse before it gets better. By doing the things the health care professionals plead with people to do, the spread can be slowed and give the health care industry more time to develop treatments and to gain much needed knowledge about the virus and how to limit the damage it does, which is often substantial even in so called mild cases…
It gets a bit tiring arguing stats so let’s distill this down to its essence.
Here are the options:
1. Lock down to suppress infections and deaths without eliminating the virus — the slowly unlock — only to find that infections and deaths spike — panic kicks in — so lockdown again — suppress infections and deaths — then slowly unlock — rinse repeat
As this plays out millions of jobs are lost and epic numbers of businesses shut their doors for good.
Pretend everything is not so bad by offering wage subsidies and loan holidays. Basically UBI + Bail Outs, or using medical parlance, put the patient on life support and wait for him to die.
That would appear to be where we are now. Again, I cannot see a way back anymore than I can work out how to get shaving cream back into the can.
Surely option 1 ends in tears (well worse than tears but we’ll leave it at that)
2. Acknowledge this is a dangerous virus but that it is impossible to eliminate a virus globally without a vaccine or herd immunity.
Understand that virtually all the people who are dying from this virus are elderly or have serious existing diseases. Protect those people by locking them down and having them wear face masks. Everyone else gets on with life. Many will get sick. Some but not a lot – will die.
We achieve herd immunity and live goes on.
I vote for 2. however even if people do see that 2. is the lesser of two evils, 2. is no longer an option.
The problem we have is that the MSM has instilled extreme fear in the masses. The inevitable spike that would be realized by opting for 2. would send billions scurrying back into their holes screeching ‘lock it down – LOCK IT DOWN’ They’d not go to restaurants or malls or on holiday because they believe this virus is on par with the Black Plague.
Get ready to assume the brace position.
There can only be “herd immunity” if there is immunity. And that hasn’t even been established yet, given the re-infections that are occurring.
Willy Winky: Protect those people by locking them down and having them wear face masks. Everyone else gets on with life.
If you are not wearing a mask others can become ill from you spreading the virus once you have it, even if you will survive. Which means those elderly, even wearing a mask, could catch the virus from you.
You could be shedding virus before you even know you have it, before you feel ill. Which while it works fine for infecting others and building herd immunity, it also works fine for infecting those wearing masks who could die.
@Willy – Having read quite a lot of your posts I think you would, in you heart of hearts, prefer Option 3:
No masks, no lockdowns, everyone capable of dying does so ASAP, and we get back to having a wonderful productive economy. Without all these wimpy virus-prone individuals. Of course a few will self-isolate and wear masks so we would end up losing more stupid people than intelligent people.