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• Fri, May 22 2020
• 1:59 PM » Seasonal Adjustment Weirdness: Will State and Local Governments Hire 700,000 Teachers in June and July?
Published Fri, May 22 2020 1:59 PM by Calculated Risk Blog
Every year, state and local governments let about 2 million teachers go in late Spring, and then hire them back at the end of Summer. Since this happens every year, the BLS adjusts for this seasonal pattern in the monthly employment report. However, in 2020, state and local governments let almost 700 thousand teachers go in March and April (mostly in April). What this means is that instead of letting 2 million teachers go in late Spring, state and local governments will only let go about 1.3 million teachers (since 700 thousand were already let go). This creates a weird seasonal adjustment problem.&nbsp; By the end of July, the normal number of teachers (around 2 million) will probably have been let go. Since the BLS has already reported almost 700 thousand teaching jobs lost seasonally adjusted, the seasonally adjusted number from the BLS will have to show something like an increase of 700 thousand teacher jobs in June and July! State and local governments will not hire 700 thousand teachers in June and July, but the BLS seasonally adjusted report will show those hires to make the numbers balance out.&nbsp; Just something to remember in a few months.

Source: Calculated Risk Blog
• 11:54 AM » Q2 GDP Forecasts: Probably Around 40% Annual Rate Decline
Published Fri, May 22 2020 11:54 AM by Calculated Risk Blog
Important: GDP is reported at a seasonally adjusted annual rate (SAAR). So a 40% Q2 decline is around 9% decline from Q1 (SA). From Merrill Lynch: We are tracking 2Q GDP at -40% qoq saar , down from -30% earlier. [SAAR May 22 estimate] emphasis added From Goldman Sachs: We left our Q2 GDP forecast unchanged at -39% (qoq ar) but raised our estimate of the initial vintage by 0.3pp to -31.5% (released on July 30th). [May 22 estimate] From the NY Fed Nowcasting Report The New York Fed Staff Nowcast stands at -30.5% for 2020:Q2 . [May 22 estimate] And from the Altanta Fed: GDPNow The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2020 is -41.9 percent May 19, up from -42.8 percent on May 15. [May 19 estimate]

Source: Calculated Risk Blog
• 11:30 AM » At first, some mortgage bailout recipients didn't need it, but now more do
Published Fri, May 22 2020 11:30 AM by CNBC
As of this week, 4.75 million homeowners are in government or private sector mortgage forbearance programs, according to Black Knight. That is 9% of all mortgages outstanding. New analysis, however, shows a large share of these borrowers initially didn't need the bailout, but now more do.
• 10:34 AM » NMHC: Rent Payment Tracker Finds 90.8 Percent Paid Rent as of May 20th
Published Fri, May 22 2020 10:34 AM by Calculated Risk Blog
From the NMHC: NMHC Rent Payment Tracker Finds 90.8 Percent of Apartment Households Paid Rent as of May 20 he National Multifamily Housing Council (NMHC)'s Rent Payment Tracker found 90.8 percent of apartment households made a full or partial rent payment by May 20 in its survey of 11.4 million units of professionally managed apartment units across the country. This is a 2.2-percentage point decrease in the share who paid rent through May 20, 2019 and compares to 89.2 percent that had paid by April 20, 2020 . These data encompass a wide variety of market-rate rental properties across the United States, which can vary by size, type and average rental price. " Each week we see new evidence that Americans are prioritizing rent and that the work apartment firms did to create flexible payment plans is paying dividends," said Doug Bibby, NMHC President. "However, the hardships caused by the outbreak are not ending anytime soon. Accordingly, it is critical that lawmakers come together to support America's 43 million renter households with a national rental assistance fund as was included in the House-passed HEROES Act, and to protect our housing providers with expanded mortgage forbearance." emphasis added CR Note: It appears most people are still paying their rent. &nbsp; This was a higher percentage than in April (at the same point in the month), and only down 2.2 percentage points from a year ago.

Source: Calculated Risk Blog
• 10:25 AM » BLS: April jobless rates up in all 50 states; 43 States at New Record Highs
Published Fri, May 22 2020 10:25 AM by Calculated Risk Blog
From the BLS: Regional and State Employment and Unemployment Summary Unemployment rates were higher in April in all 50 states and the District of Columbia , the U.S. Bureau of Labor Statistics reported today. Similarly, all 50 states and the District had jobless rate increases from a year earlier. The national unemployment rate rose by 10.3 percentage points over the month to 14.7 percent and was 11.1 points higher than in April 2019. ... Nevada had the highest unemployment rate in April, 28.2 percent , followed by Michigan, 22.7 percent, and Hawaii, 22.3 percent. The rates in 43 states set new series highs. (All state series begin in 1976.) The rates in Hawaii and Nevada exceeded their previous series highs by more than 10.0 percentage points each, while the rates in Michigan, New Hampshire, Rhode Island, and Vermont exceeded their previous highs by more than 5.0 points each. Connecticut had the lowest unemployment rate, 7.9 percent. The next lowest rates were in Minnesota and Nebraska, 8.1 percent and 8.3 percent, respectively. emphasis added Click on graph for larger image. This graph shows the number of states (and D.C.) with unemployment rates at or above certain levels since January 1976. Currently 43 states are above 10% unemployment rate. Seventeen states are above 15%. Three states are above 20% (Hawaii, Michigan, and Nevada). One state (Nevada) is above 25% unemployment.

Source: Calculated Risk Blog
• 9:28 AM » Dr. Fauci is still confident U.S. could have a coronavirus vaccine by December
Published Fri, May 22 2020 9:28 AM by CNBC
Researchers are accelerating development of vaccine candidates by simultaneously investing in multiple stages of development that could prove to be useless if the vaccine ends up not being effective or safe, Fauci said.
• 8:46 AM » New Single-Family Home Size Declines Ending?
Published Fri, May 22 2020 8:46 AM by eyeonhousing.org
New single-family home size has trended lower over the last four years as builders sought to add additional entry-level supply to an inventory-starved housing market. However, the coronavirus and the recession of 2020 potentially reset those trends, as evidence grows that households will seek more space for home offices, home gyms, and other purposes. According to first quarter 2020 data... Read More &#8250;

Source: eyeonhousing.org
• 8:09 AM » Banks will struggle to generate profits even as the global economy recovers, IMF says
Published Fri, May 22 2020 8:09 AM by CNBC
The beaten-down banking sector will remain under pressure through 2025 even as the economy recovers, the International Monetary Fund said Friday.
• 8:03 AM » Black Knight: Black Knight: 4.75 Million Homeowners Now in COVID-19-Related Forbearance Plans; Nearly Half Made April Mortgage Payments
Published Fri, May 22 2020 8:03 AM by Calculated Risk Blog
Note: Both Black Knight and the MBA (Mortgage Bankers Association) are putting out weekly estimates of mortgages in forbearance. From Black Knight: Black Knight: 4.75 Million Homeowners Now in COVID-19-Related Forbearance Plans; Nearly Half Made April Mortgage Payments "Of the 4.25 million homeowners who were in active forbearance as of the end of April, nearly half - 46% - still made their April mortgage payment ," said Jabbour. "The fact that only 54% of borrowers in forbearance actually missed their payments helps explain the disparity between April's delinquency and forbearance rates. However, just 21% of borrowers in forbearance have made their May payments , which could lead to another sharp increase in the national delinquency rate for May if those payments are not received before the end of the month." The McDash Flash Forbearance tracker shows that the 4.75 million loans in forbearance represent 9% of all active mortgages and account for a little over \$1 trillion in unpaid principal. An estimated 7.1% of all GSE-backed loans and 12.6% of FHA/VA mortgages are now in forbearance. Over the past week, active forbearance volumes have increased by just 93,000, a more than 70% decline from the 325,000 in the first week of May. CR Note: The delinquency rate in April increased sharply to 6.45%, but it would have been much higher if so many borrowers in forbearance hadn't made their mortgage payments (loans in forbearance are counted as delinquent in the survey).

Source: Calculated Risk Blog

#### More From MND

Mortgage Rates:
• 30 Yr FRM 3.10%
• |
• 15 Yr FRM 2.75%
• |
• Jumbo 30 Year Fixed 4.25%
MBS Prices:
• 30YR FNMA 4.5 108-01 (0-00)
• |
• 30YR FNMA 5.0 109-13 (-0-00)
• |
• 30YR FNMA 5.5 110-06 (0-01)
Recent Housing Data:
• Mortgage Apps -3.86%
• |
• Refinance Index -8.64%
• |
• Purchase Index 5.26%