• Average new daily COVID-19 cases reached 108,582 as of May 23, almost double the number at the beginning of the month. Recurrence of COVID-19 has kept some milder restrictions in place, preventing mobility from recovering fully.
• The number of seated diners slipped back into negative territory, and as of May 20, travelers passing through airport security checkpoints were near 12% below the pre-pandemic level.
• On prices, lumber futures prices fell to a new low this Monday due to a slowdown in the market for new homes, but other commodity prices (gasoline and metal) remain extremely high. Inflation expectations remain elevated.
• The jobs market remains healthy. For the week ended May 21, initial jobless claims declined by 8,000 to 210,000, beating estimates of 215,000.

Virus and mobility

COVID-19 cases:  As of May 23, average new daily COVID-19 cases reached 108,582, almost double the number at the beginning of the month and up 14% in the last seven days. However, cases remain approximately 87% below the all-time high on Jan. 15. Average daily deaths, which lag new cases, also began rising, up by 26% over the week (see chart 1). Vaccination rates have stalled since April--66% of the total population is fully vaccinated, and 77% of the population has received at least one dose.

Mobility:  Mobility in the retail and recreation subindex nationally as of May 20 was almost 6% below the pre-pandemic baseline (see chart 3). However, it is 15 percentage points above its recent low on Jan. 7 (which was 21% below the pre-pandemic levels). Recurrence of COVID-19 has kept some milder restrictions in place, as suggested by the Oxford Stringency Index, which as of May 23 was at 58.8 (100=strictest), preventing mobility from recovering fully.

People-facing COVID-19-sensitive

OpenTable:  The number of seated diners slipped back into negative territory (after recovering) as new cases in the country started to rise. As of May 22, seated diners at restaurants were almost 5% below the 2019 baseline (see chart 4). New York and Illinois are operating around 26% below their pre-pandemic levels, while Florida and Texas are operating close to 15% above the pre-COVID-19 levels.

Air traffic:  As of May 20, travelers passing through airport security checkpoints were near 12% below the pre-pandemic level, which is roughly 2 percentage points below the start of May (see chart 5). Requirement of negative COVID-19 tests for air travelers has deterred many Americans from traveling abroad as they fear getting stranded--making recovery slower than anticipated.

Hotel occupancy:  The occupancy rate for the week ended May 21 is at 68.6% (see chart 6). It's the highest rate since mid-August 2021 and 2.0 percentage points over its 2019 average, after hovering around its average for six weeks. As the omicron wave subsided, leisure travel gained momentum, pushing the hotel occupancy rate near the precrisis average. While more constrained, business travel has also likely picked up as businesses softened travel restrictions.

Current and future activity

Weekly Economic Index (WEI):  The WEI for the week ended May 21 came in at 3.52%, down by 0.7 percentage points compared with the previous week (see chart 7), owing to decreases in retail sales, tax withholding, consumer confidence, electricity output (relative to the same time last year), and fuel sales, and a rise in initial unemployment insurance claims. The WEI has been on a downward trend since May 2021, after reaching its highest value of 11.2%. The index has been down by 7.7 percentage points over the year.

Taiwan Purchasing Managers' Index (PMI) measures:  The Taiwan manufacturing PMI is in expansion territory for the 22nd straight month but edged down by 1.5 points from March to 56.30 (see chart 8). The new orders subindex declined by 4.7 points--the first time it has contracted since July 2020--suggesting some softening in supply chain disruptions in semiconductors, the country's key export. The supplier deliveries index rose by 1.8 percentage points to 67.4, reflecting slower deliveries, mainly owing to the Russia-Ukraine conflict and lockdowns in China.

U.S. Purchasing Managers' Index (PMI) measures:  The manufacturing and services PMI both were in expansion territory (at 55.40 and 57.10, respectively) in April, but they decelerated by 1.7 and 1.2 percentage points, respectively (see chart 9). The employment subcomponent moderated almost 6 points to 50.9. Labor shortages and supply chain issues remain key factors in slowing momentum.

Rigs count:  The number of active drilling rigs in the U.S. increased for the ninth consecutive week to reach the count of 576 rigs, for the week ended May 20 (see chart 10). Drilling in the country has increased since the start of the Russia-Ukraine conflict, adding 52 rigs over the last 10 weeks.

Raw steel capacity:  Raw steel capacity utilization stayed above the 2019 average for the sixth consecutive week (see chart 11). For the week ended May 21, capacity utilization came in at 81%, which was almost 0.8 percentage points below the previous week and just above its 2019 average.

Johnson Redbook same-store index:  For the week ended May 21, the same-store sales index increased by 13.1% on a year-over-year basis (four-week moving average). This is below its holiday peak but still showing resilience in sales despite rising prices, with sales well above pre-pandemic levels (see chart 12). That said, sales have declined by almost 5 percentage points from the all-time high of 18.5% (year over year) for the week ended Jan. 1 on signs that people are trading down to less expensive options and looking for discounts.

Consumer confidence:  The weekly Ipsos-Forbes Consumer Confidence Index for the week ended May 17 declined for the third consecutive time, to 52.1, recording a decline by 3.3 points since the beginning of April (see chart 13). Sentiment weakened on higher inflation expectations against the backdrop of record-high prices. The Michigan Consumer Sentiment Index for May also declined, by 6.1 points to reach 59.1, wiping away April's recovery and a new 11-year low (see chart 14).

Home mortgage applications:  The mortgage purchase applications index for the week ended May 20, at 225.5, has declined by 28% from its recent peak the week ended Jan. 28 and is at its lowest rate in over two years (see chart 15). The fall can be attributed to the dampening effect of higher mortgage rates on home sales, with the 30-year mortgage rate, now at 5.25%, at its highest since 2009. Existing and new home sales were down 2% and 17% in April, respectively.

Prices

Lumber futures:  Lumber futures prices fell to a new low this Monday, trading at $651.9 per 1,000 board feet (see chart 16), which was 55% below the recent March peak, due to a slowdown in the market for new homes, down 30% from the December high. However, the futures prices remain 76% above the 2019 average.

CBR- BLS Metal Price Index:  The metal price index over the last seven days rose, after declining by 15% from its all-time high of $1,431 per point on April 4 (see chart 17). As of May 23, the index stands at $1,255 per point, which is still almost 59% above the pre-pandemic average.

Freightos Baltic Global Index:  The Freightos Baltic Global Index as of May 23 is at $7,861 per point, which is almost 29% below its record high of $11,137 per point in September 2021 but still above the pre-pandemic average (see chart 18). The recent decline in freight rates stems from factors such as reduced demand and an extended period of low-capacity operations of the Shanghai port due to COVID-19 lockdowns.

Gasoline prices:  Oil prices for the week ended May 23 came in at record-high levels of $4.59 per gallon (see chart 19). Despite a rise in oil prices, demand has increased, while supply remained significantly limited, pushing prices even higher.

Forward inflation expectations:  The five-year inflation expectation as of May 23 is at 2.28%, which is almost 15% down from its recent high of 2.67% on April 21. Meanwhile, the 10-year inflation expectation stood at 2.60%, a decline by 14% from its record high of 3.02% on April 21 (see chart 20). The Fed's tight monetary policies have led to a moderation in inflation expectations. Still, most indicators that we track on a monthly basis are at multidecade highs, with consumer inflation expectations over the next five years remaining near its 11-year high.

Labor market

Initial jobless claims versus Indeed job postings:  For the week ended May 21, initial jobless claims declined by 8,000 to 210,000, beating estimates of 215,000 (see chart 21). It comes after claims hit a 53-year low of 166,000 in mid-March. Indeed job postings have been steady for the past three weeks, around 56% above the Feb. 1, 2020, level, which is 8 percentage points below its all-time high of 63.5% (above the Feb. 1, 2020, levels) recorded on Dec. 31, 2021. The decline in postings since December indicates that some positions are getting filled.