In This Issue:
- The Economy & Your Finances: Hiring slowed in September
- The Market & Industry: Supply remains a stumbling block
- Around the State: New equity metric may slow reopening
- Health Check-Up: CDC revises guidelines to acknowledge airborne transmission
The U.S. economy saw the unemployment rate decrease to 7.9 percent in September, down from 8.4 percent in August — but that decline can be attributed to around 700,000 workers dropping out of the labor market altogether. And hiring slowed, with employers adding just 661,000 jobs last month compared with 1.5 million in August. This suggests the economic effects of the pandemic are spreading to affect previously strong areas of the workforce and makes a quick rebound increasingly unlikely. Last week, just before these September numbers were announced, consumer confidence surged to its highest level since the start of the pandemic.
California’s Employment Development Department (EDD) did not release new unemployment data from last week. The EDD took a two-week pause on processing new claims on September 20 in an effort to tackle its backlog of roughly 1.6 million claims. On Monday, California resumed accepting initial unemployment applications through its new ID verifying system, ID.me.
In its September forecast, the UCLA Anderson School of Management predicted California’s economic outlook will improve substantially in the third quarter, but that it will take years before the state makes a full recovery. Pre-recession levels of economic activity are not expected until after 2022.
Meanwhile, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have been negotiating a new economic stimulus package, but yesterday President Trump instructed his team to cease negotiations until after the election. Economists worry that the U.S. recovery will be stunted if another deal is not passed soon.
Sources: Yahoo! Finance, The San Francisco Chronicle, Los Angeles Times, Market Watch, CNBC, UCLA Anderson School of Management, The Mercury News, Bloomberg News
The Market & Industry: Supply remains a stumbling block
With mortgage rates once again hovering near all-time lows, buyer demand remains high — requests for private showings last week were up 150 percent from the previous year. Though mortgage applications did fall 5 percent last week from the previous week, new purchase applications were over 21 percent ahead of 2019’s pace.
While homes are continuing to sell quickly and without discounts, the number of new listings is declining; in California, new homes entering the MLS declined 7.6 percent last week from the previous week. Nationwide, the number of homes on the market has dropped 39 percent year over year — and that number is even higher for California alone. The lack of supply has put buyers in a tight spot, facing increased costs and competition.
Wildfires have put nearly 2 million American homes at extreme risk of property losses. California is home to 76 percent of those residences.
Sources: REALTOR® Magazine, C.A.R. Research & Economics, CNBC, Realtor.com, Forbes
As of this morning at 8:03 a.m., cases in California numbered 838,645 and deaths had topped 16,000. Since the pandemic began, California has recorded 822,700 COVID-19 infections — more than any other state. Right now, infections and hospitalizations are decreasing statewide, with the latter down 79 percent from its peak in mid-July. Still, Governor Newsom warned that state officials are watching data that could suggest another surge is on the way.
Last Wednesday, California’s top public health official Erica Pan announced that counties will have to demonstrate they have invested in testing and other resources to eliminate disparities in positivity rates. COVID-19 has disproportionately affected California’s Latinx, Black and Pacific Islander communities, and the new health equity metric is aimed at closing those gaps.
Counties with over 106,000 residents will have to show their test positivity rates for their most disadvantaged communities do not fall significantly behind the overall county rate. Counties with fewer than 106,000 residents will have to demonstrate how they plan to educate, support and test these communities. These requirements could make it difficult for counties to reopen as fast as some local leaders would like. Prior to this metric going into effect yesterday, 10 California counties comprising 6.4 million residents were cleared for reopening last week, moving to less restrictive tiers on the state’s Blueprint for a Safer Economy.
Newsom delayed issuing new guidance for theme parks last Friday after facing growing pressure from both the industry and local officials worried about the shutdown’s impact on local economies. Disney announced last week it would be laying off 28,000 employees, citing California’s unwillingness to allow Disneyland to reopen as a significant contributing factor.
Sources: Los Angeles Times, The Mercury News, SF Gate, The Sacramento Bee, California COVID-19, The Modesto Bee, California Department for Public Health, CNN
The Centers for Disease Control and Prevention (CDC) revised its coronavirus guidance to acknowledge that COVID-19 can spread through airborne transmission. Its guidance now states that particles of the virus can linger in the air for minutes to hours and pass between people more than six feet apart, though those cases are rare. According to the CDC, it is much more common for the virus to spread through larger respiratory droplets released when an infected person coughs or sneezes.
The CEO of the drugmaker Moderna said its vaccine won’t be ready for widespread public distribution until Spring 2021. And the Food and Drug Administration, seeking stricter guidelines for emergency approval of a vaccine, was stonewalled by the White House.
Last Thursday at 10 p.m. PST, President Trump tweeted that he and the First Lady had both tested positive for COVID-19. He was admitted to Walter Reed National Military Medical Center on Friday and returned to the White House on Monday, where he is still receiving treatment.
Sources: NPR, CNBC, CBS News, The New York Times