Free-fallin’. Turn it up.
Friday, May 8, 2020 is setting up to be one for the history books.
That morning, at 8:30 am Eastern, the U.S. Bureau of Labor Statistics, will release its data print for the nation’s “employment situation” for April. A consensus among economists, Calculated Risk’s Bill McBride notes, projects that the BLS release that morning will reflect job losses of 21 million from last month, and an unemployment rate of 16%.
Friday, June 5, and Friday, July 2, and Friday, August 7, and Friday, September 4–due dates for subsequent BLS employment situation monthly releases–may conjure Tom Petty’s verses again and again and again.
I’m gonna free fall out into nothin’
Gonna leave this world for a while
[Chorus] Now I’m free, free fallin’
No one can say with certainty how long “a while” in the “gonna leave this world for a while” sense will last. Nor, do any of us know with certainty how many of those first Fridays of the month will feel bleaker than the prior one. Are you from “the-worst-is-over” camp many Wall Streeters are in? Or are we still free-fallin’?
No one knows either whether whether the fiscal and monetary muscle of the world’s largest central bank and all the resource streams at its–and Capitol Hill’s–command will meet the measure of damage, in depth and duration, to stop nor soften the fall.
And, perhaps, to spark a revival. Pausing a third or more of economic activity proved difficult enough. How much harder, now, will it be to get the thing to restart?
For a strong use-case on how a housing-led recovery–you remember, the kind the U.S. typically had coming out of recessions past, before the rout of the Great Recession?–may look and feel in the months ahead, you should join us Monday at 5 pm EST, by registering here for our fifth #BuildersAreEssential program, “The Big Reset: Supply, Demand, and Animal Spirits.”
We’ll have an exclusive deep-dive analysis from two of housing’s most important, brightest lights, Robert Dietz, chief economist of the National Association of Home Builders, and Ali Wolf, chief economist at Meyers Research, BUILDER’s sibling analytics and advisory firm.
Here’s what you can expect from the conversation we have during the session, based on the “wish-list” I shared this past week with Rob and Ali:
- Each–Ali and Rob–open with an opinion. Describe the moment for the economy and housing with a single one-word to four-word phrase, and why.
- Discuss ways to characterize “where we are” … i.e. have we reached the “end-of-the-beginning” of the crisis? “Beginning-of-the-end,” and why.
- Map–with visuals-key features of your thesis on what’s happened to demand, starting from accelerating strength coming into 2020 to the COVID cliff by the end of Feb. to the current state.
- Talk about timing–2nd and 3rd quarter expectations as to what happens as economic “opening up” initiatives occur.
- Talk about longer-term expectations–V, U, W, or L–characterizations to economic conditions.
- Talk about Pandemic impact on jobs versus structural pivots around employment … shed light on your views as to how much of the job-loss is permanent vs. temporary.
- Talk about impacts to consumer sentiment, and what may occur to put a floor under further deterioration of consumer confidence, and when.
- Talk about Contrasts–markets, sub-markets, consumer segments, business sectors – where you see a “bright-spot” green shoot effect of more pervasive recovery.
- Discuss mortgage and credit policy, and needs for FHFA facility to ease access to credit.
- How will supply constraints–materials, land, permit-flow, AC&D lending, access to labor, etc.–play a role in a recovery, and what can be done to use any of those levers to improve affordability in the years ahead (if anything)?
- What are the 2020, 2021, 2022 outlook projections today, and what would you identify as the key risks to those projections?
On some of issues critical to the near-, mid-, and longer-term business conditions outlook for home builders and their partners, the two share the same view, particularly as regards the impact of some of the macro forces in play. However, each comes at the data and its take-aways in a way that will add enormous value–especially for more localized, or sector-specific dynamics essential to understanding, and taking action in a measured way in the weeks and months ahead.
- Is the flight to less-densely concentrated, suburban living a blip or a trend?
- Will the tech-factor in in- and out-migration patterns intensify or decline?
- Which secular industry-related reboots will most meaningfully re-ignite new-home demand?
- What are the risks to the $500 million in new-home work-in-process backlog, given continued months ahead of macro-economic deterioration?
- Will AD&C lending continue to get tighter due to capital investment disruptions, or not?
- What are the best consumer-sector behavior patterns to begin to look for as signs a recovery has “legs” to stand on?
- What are the best questions for a business to ask, and answer, given the challenges they face in the near-term, post-lockdown, Covid uncertainty period?
Best of all, however, are Rob and Ali’s unrehearsed responses to your questions. We’ll look forward to having you with us, tomorrow, Monday, May 4, at 5 pm ET, and you can register here now.
