Weekly Economic Index (WEI)

April 30, 2020

 

Daniel Lewis, New York Fed

Karel Mertens, Dallas Fed

James Stock, Harvard University

The WEI is an index of 10 weekly indicators of real economic activity, scaled to have the units of four-quarter percent change of real GDP.

 

• The WEI is currently -11.58 percent, scaled to four-quarter GDP growth, for the week ending April 25 and -10.86 percent for April 18; for reference, the WEI stood at 1.58 for the week ending February 29.
• The WEI for the week of April 25 was essentially unchanged today as a sizeable decline in tax withholdings and small decrease in electricity usage (after adjusting for 2019 levels) were offset by a fall in initial UI claims relative to recent weeks, a substantial rise in fuel sales, and a modest increase in rail traffic. The WEI for the week of April 18 was revised upwards as this morning’s continuing UI claims release was better than expected.
• As alternative scales, the current WEI implies a 38.83 percent decrease in IP (YoY) and a 1570k employee decrease in nonfarm payroll.
• Data dashboard and .release (.pdf)
• Historical data including recent release (.xlsx)

Weekly Economic Index (WEI)

April 23, 2020

 

Daniel Lewis, New York Fed

Karel Mertens, Dallas Fed

James Stock, Harvard University

The WEI is an index of 10 weekly indicators of real economic activity, scaled to have the units of four-quarter percent change of real GDP.

• The WEI is currently -11.70 percent, scaled to 4-quarter GDP growth, for the week ending April 18 and -10.40 percent for April 11; for reference, the WEI stood at 1.58 for the week ending February 29.
• Today’s decline in the WEI was driven by a fifth successive week of initial UI claims in the millions (4.27 million NSA), a considerable fall in federal tax withholdings (now negative year-on-year), and a further modest decrease in rail traffic. These factors offset a small increase in fuel sales. The slight upward revision of the 4/11 number resulted from the continuing UI claims release providing a slightly less negative signal than before.
• As alternative scales, the current WEI implies a 39.19 percent decrease in IP (YoY) and a 1585k employee decrease in nonfarm payroll. 
• Data dashboard and .release (.pdf)
• Historical data including recent release (.xlsx)

Weekly Economic Index (WEI)

April 21, 2020

 

Daniel Lewis, New York Fed

Karel Mertens, Dallas Fed

James Stock, Harvard University

The WEI is an index of 10 weekly indicators of real economic activity, scaled to have the units of four-quarter percent change of real GDP.

• The WEI is currently -10.95 percent, scaled to 4-quarter GDP growth, for the week ending April 18 and -10.56 percent for April 11; for reference, the WEI stood at 1.58 for the week ending February 29.
• Today’s small upward revision of the WEI for the week of 04/11 is a result of today’s staffing index release, while lower than the prior week, being less negative than previous data releases. The fall in the WEI for 04/18 relative to this revised number is driven by tumbling retail sales, offsetting an increase in steel production and a slight improvement in consumer confidence. This estimate may be revised downwards on Thursday, when more data is available, including fuel sales.
• As alternative scales, the current WEI implies a 36.95 percent decrease in IP (YoY) and a 1490k employee decrease in nonfarm payroll. 
• Data dashboard and .release (.pdf)
• Historical data including recent release (.xlsx)

Two Charts Worth Noting

April 16, 2020

Here are two eye-poppers, which are in the WEI release for this week but deserve highlighting.

The first is end sales of gasoline, diesel, and jet fuel, computed using Energy Information Administration on refined product production. Gasoline supplied is down by 46%, and jet fuel supplied is down by 52% since March 6. Some of that has been put into inventories (those tanks you see at wholesale distribution outlets, a.k.a. terminals or "truck racks"). Once you adjust for inventories, end sales are down roughly 50% yoy (52-week percent change).

Fuel Sales to End Users and Retailers, 52-week percent change, through week ending April 11.

These are sales end users and retailers (gas stations, truck stops, and large end users who purchase wholesale like jet fuel suppliers at airports and fleets like UPS and the Post Office). There is an additional layer of inventories you don't see in these data - fuel stored in the tanks at airports, gas stations, etc. - so this series isn't quite equal to final fuel consumption, but it is close. My (evidence-free) guess is that most end user tanks are by now pretty full because of the unexpected decline in consumption combined with topping off because of very low wholesale prices In any event, the decline (plotted along with the WEI) is stunning, and far exceeds anything in the financial crisis.

The second chart is raw steel production (from the American Iron and Steel Institute), which is down 34% yoy. This decline isn't (yet) as large as in the financial crisis, but is an enormous drop for such a short period of time. Capacity utilization was at 56.1% for the week ending April 11, compared to 81.3% for the same week last year. 

Raw Steel Production, 52-week percent change, through week ending April 11.

Weekly Economic Index (WEI)

April 16, 2020

 

Daniel Lewis, New York Fed

Karel Mertens, Dallas Fed

James Stock, Harvard University

The WEI is an index of 10 weekly indicators of real economic activity, scaled to have the units of four-quarter percent change of real GDP.

• The WEI is currently -11.04 percent, scaled to 4-quarter GDP growth, for the week ending April 11 and -8.42 percent for April 04; for reference, the WEI stood at 1.58 percent for the week ending February 29.
• Today’s decline in the WEI is driven by the continued fall of fuel sales, to about half the level seen in 2008, due to stay-at-home orders and similar restrictions, considerably lower federal tax withholdings, a fourth successive week of initial UI claims in the millions (4.97 million NSA), and further decreases in rail traffic and electric utility output.
• As alternative scales, the current WEI implies a 37.22 percent decrease in IP (YoY) and a 1502k employee decrease in nonfarm payroll.
• Data dashboard and .release (.pdf)
• Historical data including recent release (.xlsx)

Weekly Economic Index (WEI)

April 14, 2020

 

Daniel Lewis, New York Fed

Karel Mertens, Dallas Fed

James Stock, Harvard University

The WEI is an index of 10 weekly indicators of real economic activity, scaled to have the units of four-quarter percent change of real GDP.

• The WEI is currently -9.44 percent, scaled to 4-quarter GDP growth, for the week ending April 11 and -8.57 for April 04; for reference, the WEI stood at 1.58 for the week ending February 29.
•  Today’s decline in the WEI is driven by a continued sharp fall in steel production, to its lowest level since 2009, and retail sales growth turning negative, continuing its fall from early-pandemic heights. Consumer confidence, which had appeared to stabilize, also decreased. The staffing index for the week of 04/04 fell below 2008 levels, reinforcing the signal from UI claims. We anticipate the WEI may fall further on Thursday when data on UI claims becomes available.
• As alternative scales, the current WEI implies a 33.32 percent decrease in IP (YoY) and a 1300k employee decrease in nonfarm payroll.
• Data dashboard and .release (.pdf)
• Historical data including recent release (.xlsx)

Weekly Economic Index (WEI)

April 14, 2020

 

Daniel Lewis, New York Fed

Karel Mertens, Dallas Fed

James Stock, Harvard University

The WEI is an index of 10 weekly indicators of real economic activity, scaled to have the units of four-quarter percent change of real GDP.

•  The WEI is currently -8.89 percent, scaled to 4-quarter GDP growth, for the week ending April 04 and -6.75 for the week ending March 28; for reference, the WEI stood at 1.58 for the week ending February 29.
• Today’s decline is driven by the sustained surge in UI claims, at 6.6 million (SA), and continued collapse in fuel sales, down a further 2.5 million barrels/day. It is exacerbated by more modest decreases in rail traffic, electric output, and tax withholding. The downward revision of the WEI for the week of 3/28 is the result of today’s continuing claims data, showing 7.5 million (SA) unemployed.
• As alternative scales, the current WEI implies a 31.60 percent decrease in IP (YoY) and a 1197k employee decrease in nonfarm payroll employment.
• Data dashboard and .release (.pdf)
• Historical data including recent release (.xlsx)

Weekly Economic Index (WEI)

April 7, 2020

 

Daniel Lewis, New York Fed

Karel Mertens, Dallas Fed

James Stock, Harvard University

The WEI is an index of 10 weekly indicators of real economic activity, scaled to have the units of four-quarter percent change of real GDP.

• The WEI is currently -6.56 percent, scaled to 4-quarter GDP growth, for the week ending April 04; for reference, the WEI stood at 1.58 for the week ending February 29.
• Today’s decline is driven by a continued sharp decrease in raw steel production and a further fall in retail sales from the peak of early “stocking up” behavior; consumer sentiment also fell slightly lower last week. A further decline is likely on Thursday with the initial UI claims release. The WEI for March 28th was also revised downwards following a sharp decline in the index of temporary and contract employment for that week.
• As an alternative scale, the current WEI implies a 24.58 percent decrease in IP (YoY).
• Data dashboard and .release (.pdf)
• Historical data including recent release (.xlsx)

Weekly Economic Index (WEI)

April 2, 2020

 

Daniel Lewis, New York Fed

Karel Mertens, Dallas Fed

James Stock, Harvard University

The WEI is an index of 10 weekly indicators of real economic activity, scaled to have the units of four-quarter percent change of real GDP.

•  The WEI is currently -6.19 percent, scaled to 4-quarter GDP growth, for the week ending March 28, and -3.22 for the week ending March 21; for reference, the WEI stood at 1.58 for the week ending February 29.
• Today’s sizeable decline is driven by a sharp increase in unemployment insurance initial claims, which came in at 6,648,000 (seasonally adjusted), far surpassing last week’s record-setting release and doubling consensus forecasts from earlier in the week. This release was reinforced by a major decline in fuel sales, which now appear to be strongly responding to stay-at-home orders and other restrictions, as well as modest decreases in electricity output and rail traffic.  The WEI for March 21st was also revised downwards following a sharp increase in continuing claims for that week.
• As an alternative scale, the current WEI implies a 23.47 percent decrease in IP for March (YoY).
•  Data dashboard and .release (.pdf)
• Historical data including recent release (.xlsx)