The Economy Continues To Gain Strength In 12 Charts – Forbes

During 2020 the U.S. economy was on a roller coaster. GDP plunged 5.0% and 31.4% in the first and second quarters, respectively, and then almost climbed out of the hole by growing 33.4% and 4.3% in the third and fourth quarters, respectively. Total economic output decreased 3.5% for the year.

However, with the availability of multiple Covid-19 vaccines and a growing vaccination rate, the economy is poised to deliver strong growth in 2021 as indicators show increasing economic activity.

New York Fed “Weekly Economic Index” up sharply

The New York Federal Reserve publishes a “Weekly Economic Index” whose latest report shows a sharp upturn in March. It depicts an estimate for yearly GDP growth and it wasn’t until two weeks ago that its outlook showed year-over-year growth.

Economic activity highest since March last year

On a weekly basis Aneta Markowska, Jefferies Chief Economist, and Thomas Simons, Jefferies Money Market Economist, publish a report titled “Tracking the Reopening of the U.S. Economy with Real-Time Data.” It is a compilation of various economic indicators showing how the economy is performing long before many official U.S. government reports are generated. Its latest report has the economy at its highest level since March 14 last year but still 6.5% below the beginning of 2020.

Jefferies foot traffic data is from retailers, restaurants, shopping, fitness and entertainment establishments. It comprises about 1,900 brands and 170,000 locations. It isn’t a surprise to see a sharp uptick recently as some states have loosened, if not totally removed, any restrictions.

Jefferies uses OpenTable data from approximately 20,000 restaurants in cities representing 57% of the U.S. population. While Jefferies has foot traffic back to pre-Covid-19 levels, in-door dining restrictions are still impacting restaurants.

Flight activity is picking up. There have been 20 consecutive days of TSA screening more than 1 million passengers, with a peak of 1.57 million this past Sunday. Passenger traffic is still down around 40% from a year ago but is definitely on an uptrend. Jefferies flight data comes from Vertical Knowledge, which uses public data to deliver insights.

Consumer confidence surged in March

The Conference Board’s latest consumer confidence survey showed a surge from 90.4 in February to 109.7 in March. Lynn Franco, Senior Director of Economic Indicators said, “Consumer Confidence increased to its highest level since the onset of the pandemic in March 2020. Consumers’ assessment of current conditions and their short-term outlook improved significantly, an indication that economic growth is likely to strengthen further in the coming months. Consumers’ renewed optimism boosted their purchasing intentions for homes, autos and several big-ticket items. However, concerns of inflation in the short-term rose, most likely due to rising prices at the pump, and may temper spending intentions in the months ahead.”

Manufacturing surveys showing strength

Bill McBride from the CalculatedRisk blog has compiled a chart of the regional Federal Reserves manufacturing surveys and ISM. The New York and Philly Fed surveys are averaged together (yellow, through March), and five Fed surveys are averaged (blue, through March) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management PMI (red) is through February (right axis). The Fed surveys show a sharp upturn and with ISM releasing its March report tomorrow it should also show an increase.

Friday’s job report will give an indication on how strong job growth is

ADP’s estimate for March employment is 517,000, which is actually below economist’s estimates, which range from 650,000 to 750,000. Last month had a 379,000 jobs increase. ADP has the Leisure and Hospitality segment gaining 169,000, which is critical since this industry has been decimated by Covid-19 lockdowns. However, it does seem poised to come back as more people are vaccinated and are booking trips.

There are still about 9.5 million more people unemployed than a year ago. It would take 19 months of 500,000 job gains to get back to the previous level of employment and then more months to take into account what would have been normal job growth since March 2020.

Hours worked showing an upturn

Daniel Zhao, Lead Data Scientist on Glassdoor’s Economic Research team, created a graph using the Real-Time Population Survey data, which shows a nice increase in the number of hours worked per person with ages from 18 to 64. After being flat for three months it is now back to March levels a year ago.

But unemployment claims are still at record levels

However, unemployment claims are still at record levels. Claims, both initial and especially continuing, will have to trend downwards significantly to get employment back to pre-Covid-19 levels.

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