Pre-COVID-19 initial claims averaged about 219,000 per week nationally and 7,400 for Michigan and continued claims (or continuation of existing unemployment insurance claims) averaged 1.73 million for the U.S. and 54,300 for Michigan. As the table below shows, current initial and continuation claims against unemployment insurance remains elevated well above normal rates. Similarly, the insured unemployment rates for both the U.S. and Michigan remain elevated. Pre-COVID-19, there were about 1.2 workers staking claims against the unemployment insurance fund to every 100 contributing to the fund nationally, and 1.3 per 100 in Michigan. As of the end of January, 2021, that ratio is 3.2 to 100 nationally and 4.8 to 100 stateside.
Investors and economic forecasters often refer to treasury yields, as these measures provide a great deal of information. What that information conveys however, is often the subject of much debate. Generally treasury yields move with the economy. That is when the economy strengthens, treasury yields tend to increase. Likewise, declining treasury yields are often associated with declining confidence in the economy.
The relationship of the yields with the length of the treasury is also an important consideration and is called the yield curve. Generally long-term treasuries, (10-year) will have higher yields than short term (3-month). This reflects the relatively higher risks associated with holding an asset over longer periods of time. However, when short-term rates climb relative to long-term rates, as we saw starting in 2018 (See graph), it is an indication that investors see signs of an economic disruption within the near future. The extreme case of an inversion where short term yields exceed long-term yields is a reliable predictor of an eminent economic decline. As evident in the current spread between long- and short-term treasury yields, investors anticipate further economic growth for the U.S. economy.
The housing market is an important indicator of the health of the economy. A strong housing market often accompanies a strong economy. There are several relevant measures of the housing market. Below, we focus on single family residential housing statistics. A increase in sales and a reduction of inventory suggests a market that favors sellers. That is, high demand and low inventory tends to push up selling prices, which benefits those selling homes. As housing markets are largely local in nature, it is hard to generalize the economic conditions based on housing data alone. However, the table below shows that sellers are listing houses longer than in prior months and less willing to lower selling price to unload their homes. In light of relatively stable selling prices, we see this as a mixed signal.