Economic events are moving quickly

Today’s GDPNow release from the Atlanta Fed forecasts zero GDP growth for the second quarter. That’s down from a forecast of 0.9% just a week ago.

UPDATE JUNE 27, 2022:

Yesterday’s GDPNow release ticks up to 0.3%.

UPDATE JULY 3, 2022:

Friday’s GDPNow release goes negative: the second quarter forecast is now -2.1%. We’ll get the actual number on July 28.

In honor of Tax Day

The Wall Street Journal, April 13, 1935, p. 1.

UPDATE: 5/28/22

In the “nothing new under the sun” department, President Biden has been arguing since last summer that his multi-trillion-dollar spending proposals will reduce inflation and budget deficits. See Biden Argues Massive Government Spending Will Help Fend Off Inflation, Not Exacerbate It (July 19, 2021); and Biden Emphasizes Deficit Reduction in Bid to Pass Economic Agenda (March 18, 2022).

Only yesterday—text of the coronavirus bills

It seems like only yesterday that I was posting links to the financial crisis legislation of 2008-9. Here we go again.

So far, we’ve had three bills to deal with the coronavirus epidemic and its economic consequences:

  • HR 7048, the “Coronavirus Aid, Relief, and Economic Security Act” (a/k/a the “CARES Act”), March 27, 2020. Wikipedia summary, full text PDF.
  • HR 6201, the “Families First Coronavirus Response Act,” March 18, 2020. Wikipedia summary, full text PDF.
  • HR 6074, the “Coronavirus Preparedness and Response Supplemental Appropriations Act,” March 3, 2020. Wikipedia summary, full text PDF.

Careful printing the CARES Act—it’s over 300 pages.

Update 5/17/20:

And then there were four:

  • HR 266, the “Paycheck Protection Program and Health Care Enhancement Act,” April 24, 2020, full text PDF.

update 6/8/20:

  • HR 7010, the “Paycheck Protection Program Flexibility Act,” June 5, 2020, full text PDF.

UpdaTE 3/15/21

  • HR 1319, the “American Rescue Plan Act of 2021, March 11, 2021, full text PDF.

Commercial real estate: some improvement, but turbulence ahead

Recent trends are mixed. Values and sales bottomed in 2009 (charts 1 and 3 below), but vacancies are high (chart 2) and commercial mortgage-backed securities lending, while improving, is still weak (chart 4). “Extend and pretend” is the order of the day at commercial banks, which are digesting $80 billion of losses on commercial real estate loans, and the real challenge is still ahead: $1.6 trillion of commercial real estate loans are coming due in the next eight years.

See Commercial real estate coming back, but unevenly – WSJ.com.

New-home sales: 2010 worst year on record

New-home sales in the U.S. were up 17.5% in December, but 2010 was still the worst year on record for the homebuilding industry. For the entire year, approximately 321,000 new homes were sold—the lowest number since 1963, and 14% below 2009. The December surge is attributed, in part, to a homebuyer tax credit in California.

See Home builders saw weak sales in 2010 – WSJ.com.

The social contagion of boom and bust

Economist Robert Shiller argues that a worldwide “social epidemic” of ideas is driving renewed confidence in the economy, just as it drove the crisis of confidence that seems to have bottomed in March:

Economic analysts often turn to indicators like employment, housing starts or retail sales as causes of a recovery, when in fact they are merely symptoms. For a fuller explanation, look beyond the traditional economic links and think of the world economy as driven by social epidemics, contagion of ideas and huge feedback loops that gradually change world views. These social epidemics can travel as swiftly as swine flu: both spread from person to person and can reach every corner of the world in short order.

See Economic View – An Echo Chamber of Boom and Bust – NYTimes.com