• Mittens from Vermont

    Orders from DC  Upon his inauguration, President Biden signed 10 executive orders specifically to combat the pandemic. His plans include the intent to use the Defense Production Act (also enacted by the Trump administration for the production of ventilators and other supplies) to produce protective equipment and supplies for testing and vaccinations. The new administration is going to look to accelerate the roll-out of vaccines (100m doses in his first 100 days) by providing more funding for state and local officials and mobilizing FEMA resources to make it happen.  Moral of the story: It’s abundantly clear the real economic recovery is going to happen in lockstep with our ability to…

  • In Peach & Mint: Season 2

    Finding silver linings  New unemployment claims last week spiked to 965k (vs the 800k expected). This is the highest weekly number since August last year. Continuing claims, which is more indicative of the longer-term unemployment trend, also increased, for the first time since November. The increase in jobless claims was most acute in states with strict government shutdowns like California, where even outdoor dining is now prohibited.  Moral of the story: The December jobs report, combined with the weekly unemployment updates we’ve gotten so far in January, are clearly indicative of a struggling labor market. The one silver lining to this data is that it’s likely to generate bipartisan support…

  • Story time

    The Frog Prince Contrary to most other economic indicators, the manufacturing sector grew at the fastest pace since the beginning of the pandemic last spring (we’re about to lap a full year around the sun with this nonsense…). The ISM manufacturing index increased to 60.7 in December (anything above 50 indicates growth) and this is actually the highest level we’ve seen in almost two and a half years. Most encouraging, the employment piece of the index, which had been negative for 14 months straight, rose above 50 for the first time in October and again in December as well.  Moral of the story: This index basically measures whether things are getting better or…

  • We finally made it to 2021

    Crawling to the finish line Consumer spending fell in November, which is the first decline in this economic data point since April. Consumer spending fell 0.4% and personal incomes decreased 1.1%, indicative of the pandemic-related relief winding down. Inflation, as measured by the Fed’s preferred PCE index, was flat for the month. The core PCE index, which excludes food and energy, was only 1.4% higher on an annual basis, well below the Fed’s 2% inflation target.  Moral of the story: Consumption accounts for the majority of the US economy and what we’ve seen so far is telling us that the economy basically crawled to the finish line of 2020 (same,…

  • Goodbye, 2020

    Taking a quick break from the regularly scheduled programming to wish all of you a very happy and healthy holiday season. This will be the last digest of 2020 and it also marks two years of UnBenchd. I’m so incredibly thankful for all of you who have joined the journey, I hope it’s been as incredible for you as it has been for me. Here’s to a brighter, better, and, most importantly, healthier 2021 – cheers!  Santa’s cutting back  Retail sales fell 1.1% in November, which was a bigger drop than anticipated. Retail sales for October were revised downward to -0.1% vs the initial +0.3% reported. Sales were weaker across…

  • It’s finally happening

    The wait has begun  It’s finally happening. Vaccinations have already begun in the UK. Delivery for the Pfizer vaccine is expected to begin across the US on Monday. Approval for Moderna’s vaccine is expected to come later this week. Despite that good news, we’re literally writing history with some of the deadliest days on record happening throughout this past week as COVID-19 deaths are surging.  Moral of the story: The NYTimes published an interactive tool that helps you “find your place in line” for a vaccine based on your age, occupation, health conditions, and location. There are 144.1m people ahead of me in line across the country, including 742k people ahead of me…

  • How is it December?

    It’s not working anymore We added 245k jobs in November after adding 610k jobs in October and as many as 4.8m in June. The unemployment rate fell to 6.7%, though it’s more driven by people dropping out of the labor force all together (not a good thing). The number of workers that have been unemployed for more than six months (long-term unemployment) is sitting at 3.9m. These long-term unemployed workers represented 37% of all unemployed workers in November, which is up from just 19% in September, and compares to the historical peak in April 2010 of 45%. We’re still about 10m jobs short of pre-COVID levels, which is worse than the…

  • Silver linings playbook

    Vaccine Monday  This week started with Moderna’s announcement of its vaccine that’s over 94% effective. It was followed later in the week with Pfizer’s announcement to request emergency authorization from the FDA for its vaccine. On the other hand, the seven-day average of daily new COVID-19 cases is 24% higher than last week and states are implementing new rounds of restrictions. Last time this happened, the economy pretty much came to a halt. Speaking of which, new jobless claims increased last week and came in higher than expectations as new restrictions and shutdowns seem to be seeping into the labor market. Investors tried to grapple with the positive and negative news throughout the week,…

  • The end is in sight

    Have you seen, there’s a vaccine  Pfizer announced early Monday morning their COVID-19 vaccine was over 90% effective. We knew there were vaccine announcements coming, but efficacy this high (vs the flu vaccine which is closer to 40%-60% effective) is the silver bullet investors were waiting for – there’s officially an end in sight. Stocks that had been beneficiaries of the pandemic (Zoom, Peloton) fell in a big way while stocks that had gotten slammed by the pandemic (hotels, financials, energy) saw large recoveries. There was a double-digit difference in performance of the pandemic “haves” and “have nots” – a type of spread that normally happens over the course of a year…

  • History in the making

    A committed relationship  The Fed announced this week, as broadly expected, that it was keeping interest rates unchanged close to 0%. The Fed’s statement published shortly after the meeting earlier this week acknowledged that economic activity and employment have continued to recover though remain well below the levels at the beginning of the year. This language from the Fed was slightly less optimistic compared to last month’s statement that acknowledged economic activity had picked up in recent months. Moral of the story: Cutting interest rates is a mechanism used by the Fed to stimulate economic activity. Since rates are already at 0%, it leaves little room to impact policy through this tool.…

Sign up for the weekly digest