Macro Update

Just finished the weekly scoring of our macro index. This from The Economist this morning essentially sums up the present state of general conditions:

"The figures are staggering, even to those hardened by the experience of the global financial crisis. Disney will furlough 100,000 of its hotel and theme-park workers. Uber may slash its staff by a fifth. Fully 26m new claims for unemployment insurance have been filed in America since late March. By April 18th more than a tenth of participants in the labour force were receiving unemployment benefits, the highest rate on record. In March alone American firms shed more than 700,000 jobs, on net. Another 2m may have gone in April, a drop rivalling the record decline in employment that occurred in 1945, as America’s armed forces demobilised. Covid-19 has spread large-scale economic disruption around the world. It is increasingly clear that the pandemic confronts America with a labour-market crisis not seen since the Great Depression of the 1930s."

Our index came in this week at all-time low score of -75.93, its 28th consecutive week in the red. Staggeringly, the number of negative components comprises 85% of the index, 9% positive, 6% neutral. Among the positive scorers (5 total), updates for 2 have yet to be released, and the remaining 3 are all positive directly due to the situation we find ourselves in. The 3 up-to-date positives are, online retail (obvious), truck tonnage (delivering that online retail) and commercial and industrial loans (capturing the PPP initiative).

Click each insert below to enlarge...

PWA Macro Index:



I stated yesterday evening that I'm seeing some of the worst data of my nearly 36-year career.

Here's some of what I'm "seeing".

Consumer Spending:


Personal Income:


ISM Manufacturing Survey:


ISM Manufacturing New Orders:


Chicago Fed National Activity Index:


Citigroup US Economic Surprise Index:


Global Purchasing Managers Index:


I'll close with more from the Economist:

"The heights that unemployment reaches will depend on the depths that economic activity plumbs. There is no question that the drop in output through the first half of 2020 will be staggering. Figures published on April 29th showed that gdp fell by 1.2% in the first quarter, compared with the final quarter of 2019 (an annualised rate of -4.8%). The cbo projects that output will fall by about 12% between the first quarter and the second, or an annualised pace of roughly -40% (see chart, middle panel). But the economic and social pain of unemployment rests largely on how persistent the weakness in the labour market proves to be, which in turn depends on the pace of the economic recovery."

We'll keep you posted...

Please have a nice, safe weekend,
Marty