Sunday, September 27, 2020

27/9/20: U.S. Labor Force Participation and Employment-Population Ratios

 Yesterday, I posted updates to the America's Scariest Charts series on the U.S. labor markets (see Two commonly over-looked and under-reported labor markets statistics worth covering in any analysis of economic conditions in the country are:

  • The labor force participation rate, and
  • The employment to population ratio.
Both have been shockingly impacted by the COVID19 crisis, and both are experiencing only partial recovery to-date. 

As the chart above illustrates:

  • U.S. Labor Force Participation rate stood at 61.8 at the end of August 2020, a slight deterioration on July 2020 (62.0), but above the COVID19 trough of 60.0 in April 2020. Current level is below 2020 average of 61.9, which is itself the lowest decade average since the 1970s. Excluding CIOVID19 period, latest reading for the participation rate is the absolute lowest since May 1977.
  • U.S. Employment to Population ratio has fallen to its all-time lows in April 2020, and has recovered since. At the end of August is stood at 56.5 percent, up on 51.3 percent pandemic period low, and in-line with the 2020 average to-date. Before the start of the pandemic, the ratio stood at 60.9 and the previous decade average was 59.3. In historical comparatives terms, the latest reading for this indicator is the lowest (excluding the pandemic period lows) since early 1983.
In terms of both indicators, current conditions in the U.S. labor markets are worse than those encountered at the worst points of any recession since 1983, including the depths of the Global Financial Crisis. And this assessment comes after 3 months of the ongoing 'recovery'. 

26/9/20: America's Scariest Charts: Duration of Unemployment

 Adding to my prior posts covering:

Here is analysis of the latest duration of unemployment data, and a look at employment data across past recessions.

As usual with all recessions, average duration of unemployment has fallen in the early days of the pandemic, as new unemployment cases rose dramatically, compared to prior existent claims. Since then, however, average duration has been creeping up. 

As the jobs recovery continues, we will be seeing further increases in the average duration of unemployment as a sign of longer term unemployment, so keep an eye for the future updates to the graph.

At the peak of the pandemic, average duration of unemployment fell to just 6.1 weeks or 15.6 weeks below pre-pandemic average. As of the end of August 2020, average duration of unemployment was at 20.2 weeks, or just 1.54 weeks below the last post-recession period average. 

Taking a slightly different look at the labour markets, consider current employment levels relative to the 6 months pre-COVID19 average levels of employment:

The chart above helps strip out volatility in the levels of employment across the business cycle by using 6 months average levels of employment for the period prior to the onset of the recession as a benchmark and then relating recession period and subsequent recovery period employment levels to this benchmark.

Clearly, current recovery to-date has been sharp, but given the levels of employment contraction in the first months of the pandemic, even this speed of the recovery is not sufficient to bounce employment levels back to where they were during pre-COVID19 period of economic growth. The chart also shows that recovery in employment has slowed down sharply in August, compared to June and July.

26/9/20: America's Scariest Charts: Employment & Initial Unemployment Claims


Starting with initial unemployment claims (continued claims are covered in the earlier post: through the week ending September 19, 2020, based on non-seasonally adjusted data:

  • Initial unemployment claims fell to 796,015 in the week ending September 12 - marking the lowest number of new claims filed in any week since the start of the COVID19 crisis.
  • The new claims rose back to 824,542 in the week ending September 19, bringing the numbers of new claims back above 800,000.
  • The latest 4 weeks average new unemployment claims stand at 830,890 weekly claims, which is above the highest number reached since the peak of the Global Financial Crisis. 
  • Pre-COVID19 period historical high was attained in the week of September 1, 1982 at 1,073,500 new claims filed. The latest reading for September 2020 ranks as the 35th highest in the entire history and 10th highest if COVID19 period data was excluded from the set.
  • The latest 3 months cumulative new claims number stands at 13,789,312, down from the COVID19 pandemic peak of 41,865,591. 
  • Current cumulative count (3 months) is 4,607,312 above the pre-COVID historical high attained March 1, 1975.
  • Since the start of the labour markets recovery, average weekly improvement in the initial claims has been a reduction of 224,453 claims per week. This fell to just 305 claims reductions per week over the last 4 weeks. This is not encouraging.
Chart to illustrate the dynamics:

Now, employment figures, based on the seasonally-adjusted non-farm payrolls through August 2020 (the latest data we have):

As it says in the boxes in the chart: 
  • Current reading to pre-crisis high is still down 11,549,000, but we are up on crisis period low by 10,612,00.
  • Crisis low employment to pre-crisis high was down 22,160,000, and the running rate of the recovery since the lowest point of employment in COVID19 pandemic has been an addition of 2,653,000 per month on average. With this rate of recovery, it will take the economy 4.4 months to regain pre-COVID19 levels of employment.
  • However, last month's rate of jobs recovery was only 1,332,000, which implies employment levels recovery to pre-COVID19 levels of 6.7 months, at this rate of jobs growth.

26/9/20: America's Scariest Charts: Continued Unemployment Claims


Updating my charts for the continued unemployment claims:

The latest data is covering the period through September 12, 2020.

  • On a non-seasonally-adjusted basis, there were 13,355,586 Americans with continued unemployment claims in the week of September 12, 2020, an increase of 212,869 on the week prior, but 9,438,559 down on the COVID19 peak reached in the week of May 9, 2020. At the lowest point in pre-COVID expansion period, weekly continued claims stood at 1,350,834. 
  • In the last 4 weeks through September 12, 2020, average decline in continued unemployment claims was 461,476. At this rate of decline, it will take the U.S. economy 26-27 weeks to recover its pre-COVID19 lows in terms of continued unemployment.
  • Current level of continued unemployment claims implies 9.14% unemployment rate.
Per charts above - covering seasonally-adjusted data that has been subject significant methodological revisions starting with September 2020:
  • It would take thee U.S. economy 33 weeks from September 12, 2020 to complete full recovery to pre-COVID19 levels of continued unemployment claims
  • In seasonally-adjusted terms, unlike in terms of raw data discussed above, September 12, 2020 continued unemployment claims stood at 12,580,000 down 167,000 on week prior. 
I will be covering new or initial unemployment claims in the net post, so stay tuned. 

Friday, September 25, 2020

25/9/20: COVID19 Update: Nordics


Sweden is not acquiring the fabled 'herd immunity', folks. And other Nordics are now in a full-blown second wave of the pandemic:

As the figures above show, 

  • Sweden has been experiencing a reduction in new cases through the first week of September. This resulted in Swedish daily case counts finally dropping below the numbers reported in other Nordic countries. 
  • Since the start of September, Nordics ex-Sweden have entered the second wave of Covid19 pandemic, further exacerbating their relative position compared to Sweden.
  • However, Sweden itself is now experiencing the second wave of the pandemic, and Sweden's historical troughs of new cases have remained always higher than the troughs reached by the other Nordic states.
  • Both Sweden and the rest of the Nordics continue to enjoy low levels of deaths, however, in line with the numbers of new cases, Nordics ex-Sweden are showing signs of the new wave of the pandemic lifting deaths counts relative to the past troughs.

25/9/20: COVID19 Update: Russia


Russia is now experiencing the second wave of COVID19, although it is still in the early stages of this development:

Russia first started to impose lockdowns around March 2, which lasted through mid-June (an earlier partial lifting of lockdowns in Moscow took place in the first week of June). The lockdowns coincided with much lower daily cases and deaths than are being registered currently, but despite this, Russia is not currently planning to impose stricter controls on social activities in the wake of the accelerating pandemic numbers. The reason for this is the expressed hope that the recently-released vaccine against the COVID19 will be widely available to the general population by November 2020. The vaccine does not have an independent peer-validated confirmation of its effectiveness so far. 

Here is a table summarizing Russia's relative positioning compared to other BRIICS, the EU27 and the U.S.:

Note: data excludes China, for two reasons: (1) China's officially-reported case numbers are less than 100,000, and (2) I have zero credibility in China's officially reported COVID19 statistics, so while questions can and should be raised about robustness of data reported in BRIICS overall, China's data suggests an altogether novel levels of data manipulation compared to its peers.

25/9/20: COVID19 Update: Countries with 100,000 cases and higher

 Summary tables for 36 countries with 100,000 cases and above:

The U.S. continues to 'lead' the world in terms of sheer magnitude of the pandemic, followed by India, Brazil and Russia. The U.S. also continues to dominate the world tables in the numbers of people who died from the COVID19, followed by Brazil, India and Mexico. 

While the U.S. only accounts for 4.3% of the world population, it accounts for 22% of all cases of COVID19 and 21% of all deaths from the disease. 

Meanwhile, the highest per-capita rate of infections is registered in Quatar, followed by Panama and Peru. The highest per-capita deaths are in Peru, Bolivia and Brazil, while the highest mortality rate (deaths per confirmed cases) are in Italy, Mexico and the UK.

Out of all countries with 100K cases and higher, plus the EU27, as ranked based on three criteria (cases per capita, deaths per capita and deaths per case)

  • The U.S. ranks 8th worst performer,
  • The EU27 ranks 16th worst performer
  • The U.S. ranks worse than any EU27 member state in the 100K table, with exception of Spain (ranked 3rd worst).

25/9/20: COVID19 Update: U.S. vs EU27


Updating U.S. and EU27 numbers for COVID19 pandemic for the last 7 days:

Per above chart, the U.S. continues to pull away from EU27 in terms of deaths per capita of population. However, as shown in the chart net, EU27 is now in a full-blown contagion wave number 2, with new cases exceeding prior (wave 1) peaks.

The increase in new cases in Europe is now also reflected in rising death counts. Current EU27 death counts are in excess of the numbers that triggered winter shutdown of the European economies.

Key takeaways from the above:
  • EU27 is now in a full-blown second wave of the pandemic, with case numbers well in excess of anything witnessed during the first wave peak.
  • As the result, in the last 10 days, EU27 new case numbers have surpassed the U.S. on 3 occasions.
  • Despite this, overall counts of deaths in the U.S. remain above those in the EU27 (as been the case since July 12). Current excess gap at +59,010 up from +40,079 a month ago and +11,917 two months ago. The gap is still rising.
  • EU27 death rate per capita has effectively flattened-out at around 303-308 per 1 million prior to August 2, 2020, but is rising once again since then (326.5 currently). U.S. deaths per capita continue to increase (619.9 currently).
  • Put differently, current U.S. death rate per capita is 90 percent above that for the EU27 and this gap is still widening.
  • Currently, adjusted for population differences, the U.S. has 96,000 more deaths than the EU27. Adjusted for later onset of the pandemic in the U.S., America's death toll from COVID19 is to-date is 100,500 higher than that of the EU27. 
  • Adjustments for differences in demographics between the U.S. and the EU27 would increase the above numbers of excess  mortality even more, while adjusting for the state of public health in the U.S. (obesity, poor nutrition, neglect of chronic conditions etc) will reduce the number. While these factors cannot be directly accounted for in my estimates (I am sure, medical research will be able to do thus), I strongly suspect that the two factors will offset each other. Hence, excess mortality in the U.S. compared to the EU27 stands at around 95-100,000 people. All killed, to a large extent, by the inadequate public health system and policy responses in the U.S.

25/9/20: COVID19 Update: Worldwide Cases and Deaths


This week's update on worldwide numbers for the pandemic:

New cases are now trending up once again, as the world continues to experience the first wave of the pandemic. 

Meanwhile, new deaths remain relatively stable at highly elevated levels. The local trough in deaths counts that took place at the first week of June is now firmly surpassed and we are still close to the post-trough peak. 

The above conclusions are also confirmed by the growth rates which have ticked up significantly in the second half of September.

To see the trends more clearly:

Key takeaways from the above charts and tables:

  • As of 12/09/2020, we have once again surpassed past all-time peak and are currently running at historical highs in terms of new cases.
  • Local peak in daily deaths counts was attained in the first week of August. From then on, we are witnessing a mild moderation in daily deaths counts.  
  • However, we are now past the prior moderation in the rates of growth in both cases and deaths, with the start of September marking a clear uptick in daily growth rates in both series.
  • Current daily rates of growth are running in line with past peak periods averages (post-April) for new deaths, and above past peak averages for new cases.
  • There is absolutely no evidence of any moderation in the global pandemic numbers, and there are alarming trends in the numbers coming from the geographies that have experienced the most severe first wave of the pandemic prior, namely Europe (see net post on this).

Tuesday, September 22, 2020

22/9/20: COVID19 Update: German Economic Growth Forecasts 2020-2022


Germany's ifo Institute published their forecasts for 2020-2022 today. These represent an improvement on Summer forecasts, but continue to show big impact of the COVID19 pandemic lasting beyond 2021:

Private consumption is expected to be 0.82 percentage points below 2019 at the end of 2022, and barely in line (0.78 percentage points above) with 2018 levels. GDP is forecast to reach 1.34 percentage points above 2019 levels in 2022. Employment levels are projected to stay below 2019 levels through most of 2022, and unemployment numbers are expected to stay above their 2019 levels through the entire 2022. General Government deficits will remain in 2020, 2021 and 2022.

Using pre-2020 trend growth, German economy would have been 1.66 to 1.85 percentage points ahead of the GDP levels now forecast for 2022, which means that under the current forecasts, we can expect recovery to the pre-COVID19 trend GDP by the end of 2024. This assumes ca 1.7 percentage points growth over 2023-2024 horizon, which may be quite optimistic, given prior trend growth rates of 0.975% pa. 

ifo forecasts note the state of economic uncertainty: "The degree of uncertainty in our forecasts is enormous because nobody knows how the coronavirus pandemic will develop, whether there will be a hard Brexit after all, and whether the trade wars will be resolved". Which, of course, highlights the environment of VUCA that we are living in.

Friday, September 18, 2020

18/9/20: COVID19 Update: Countries with more than 100,000 cases

Some descriptive stats and relative rankings for countries with the largest number of cases:

In terms of relative and population-adjusted performance metrics:

  • The U.S. ranks 6th highest in the pandemic extent (number of positive cases per 1 million of population). The EU27 as a whole ranks 23rd highest.
  • The U.S. ranks 8th highest in terms of deaths per capita (number of deaths per 1 million of population). The EU 27 ranks 14th highest.
  • The U.S. ranks 18th highest in terms of mortality rates (deaths per case). The EU 27 ranks 7th highest. 
  • The U.S. accounts for just 4% of the world's population, but the country accounts for 24% of all global cases, and 22% of all deaths. In comparison, the EU27 accounts for 6% of the world's population, 8% of all cases, and 16% of all deaths.
  • U.S. country relative positioning across three metrics for comparison (32 sum score) is worse than that of the EU (44 sum score), Italy (35 sum score), Israel (64 sum score), Germany (70 sum score), France (37 sum score), and Canada (51 sum score).
  • U.S. country relative positioning across three metrics for comparison is better than that of Spain (23 sum score) and the UK (29 sum score).

18/9/20: COVID19 Update: U.S. vs EU27


Updating charts for the U.S. and EU27:

  • Deaths per capita: the U.S. has overtaken the EU27 since May 18, and the trend for the U.S. continues to be worse than that for the EU27.
  • EU27 death rate per capita has effectively flattened-out at around 303-308 per 1 million prior to August 2, 2020, but is rising once again since then (321.7 currently).
  • U.S. deaths per capita continue to increase (604.1 currently).
  • Overall counts of deaths in the U.S. are now above the EU27, since July 12, with current excess gap at +55,593 up from +34,553 a month ago and +6,187 two months ago.
  • Currently, adjusted for population differences, the U.S. has 92,384 more deaths than the EU27. 
  • Adjusted for later onset of the pandemic in the U.S., America's death toll from COVID19 is to-date is 98,726 higher than that of the EU27.

Big news is that, as stated in prior updates, the EU is now officially in a second wave of pandemic:

Although deaths in the EU remain below prior wave peak, these are rising and, accounting for lags in new cases, are likely to continue to climb:

Meanwhile, the U.S. numbers are starting to show some indicative signs of re-acceleration. If confirmed, the U.S. will also join the EU27 in entering a second wave of the pandemic.

For now, the EU27 continues to exhibit better cumulative case counts and deaths counts than the U.S., in absolute terms and adjusted for population differences and vintage of the pandemic onset.

On a cumulated basis to-date, the U.S. public health system is now responsible for ca 92-99,000 excess deaths compared to the EU27 - deaths that would have been preventable were the U.S. policymakers to give a damn about public health system in America. This should be criminal, but sadly, it appears to be normal. 

18/9/20: COVID19 Update: Worldwide Cases and Deaths


Global cases are now once again on the rise and hitting new historical highs:

Daily deaths are running at elevated levels and showing signs of some uptick on the recent local lows:

As the result, both new cases counts and deaths growth rates are now positive and rising:

In summary, the pandemic continues to rage across the globe, without any moderation. Significantly, there is now a full-blown second wave underway in Europe (more on this later). 

Thursday, September 17, 2020

17/9/20: Exploding errors: COVID19 and VUCA world of economic growth forecasts


Just as I covered the latest changes in Eurozone growth indicators (, it is worth noting the absolutely massive explosion in forecast errors triggered by the VUCA environment around COVID19 pandemic.

My past and current students know that I am a big fan of looking at risk analysis frameworks from the point of view of their incompleteness, as they exclude environments of deeper uncertainty, complexity and ambiguity in which we live in the real world. Well, here is a good illustration:

You can see an absolute explosion in the error term for growth forecasts vs actual outrun in the three quarters of 2020 so far. The errors are off-the-scale compared to what we witnessed in prior recessions/crises. 

This highlights the fact that during periods of elevated deeper uncertainty, any and all forecasting models run into the technical problem of risk (probabilities and impact assessments) not being representative of the true underlying environment with which we are forced to work.  

17/9/20: Eurocoin Leading Growth Indicator 3Q 2020


Eurocoin, CEPR & Banca d'Italia leading growth indicator for Euro Area economy is pointing to renewed weaknesses in the Eurozone economy in August, falling to its lowest levels in the COVID19 pandemic period:

As the chart above shows, Eurocoin fell from -0.5 in July to -0.64 in August, its lowest reading since June 2009. The forecast September indicator is at -0.30. Through August, we now have five consecutive months of sub-zero readings. Based on July-August data and September forecast, we are looking at a GDP contraction of 3.5 percentage points in 3Q 2020. This is mapped out in the chart below:

As the chart above shows, average annual growth rate in the Eurozone for 2020 is now sitting at -6,33 percent, far worse than the previous low of -0.575 in 2009. In quarterly readings, we now have two actual and one forecast quarters of 2020 all performing worse than the peak of the Global Financial Crisis / Great Recession contraction (see green entry in the chart above).

As before the COVID19 crisis, Eeurozone economy is performing woefully. On no time horizon did Euro area manage to achieve average annual growth of 2% (chart above).

17/9/20: Stonks are Getting Balmier than in the Dot.Com Heat

Via Liz Ann Sonders @LizAnnSonders of Charles Schwab & Co., Inc. a neat chart summarizing the madness of the King Market these days:

Yeah, right: PE ratio is heading for madness levels, PEG ratio (price earnings to growth ratio or growth-adjusted PE ratio) is now vastly above the era peak, and EPS is closer to the Global Financial Crisis era lows. 

What can possibly go wrong, Robinhooders, when a mafia don gifts you some chips to wager at his casino?

Monday, September 14, 2020

13/9/20: COVID19 Update: Nordics

 I have not updated the controversial comparatives between the Nordics (ex-Sweden) and Sweden in terms of COVID19 pandemic figures for some time now. For those of you who are out of the loop in this controversy, 

  • Sweden imposed weak restrictions (basically none) on mobility and work environments in the wake of the pandemic, pursuing the strategy of 'herd immunity';
  • Other Nordics imposed severe crack downs on mobility and social and work environments in response to COVID19 pandemic.
There has been a lot of controversy as to the effectiveness of the lack thereof of the Swedish strategy.

So here are the key data trends and points:

Key takeaways from the above:
  • As of September 12, Sweden has the total number of 89,377 cases. Nordics ex-Sweden, normalized to the Swedish population size had 35,277 cases, or 39.5% of the total number of Swedish cases. So to-date, Sweden has experienced significantly greater exposure to the virus than its Nordic countries counterparts.
  • As of September 12, Sweden has the total number of 5,829 deaths. Nordics ex-Sweden, normalized to the Swedish population size had 2,188 cases, or 37.5% of the total number of Swedish deaths. Sweden also experienced much higher death counts from the pandemic than its Nordic countries counterparts.
  • Notably, per first chart above, since 26-27th of August, Nordic ex-Sweden have experienced a rather substantial re-acceleration in new cases, in line with the rest of the EU27 (see more on this here: Sweden is only appearing to show signs of such re-acceleration starting with the end of the first week of September.
  • The above change in trends for new cases is yet to translate into change in trends in deaths: in the last 7 days, average daily new deaths for Nordics ex-Sweden, adjusting for population differences, was 0.83. The same number fo Sweden was 1.57. In the prior 14 days, the averages were reversed at 1.034 and 0.571, respectively.
Watch the new wave developing in days ahead... 

Sunday, September 13, 2020

13/9/20: COVID19 Update: Russia and BRIICS

 Updating my long-overdue charts for Coronavirus pandemic in Russia:

One worrying trend is the uptick in smoothed data for new cases in the last two weeks and a smaller corresponding increase in new deaths, as noted in the chart above.

Looking at the controversial mortality rates:

To highlight the above, consider the following differences between some key countries/country groups:

Note: China does not enter the comparatives, since it has, officially, less than 100,000 cases to-date.

12/9/20: COVID19 Update: Worldwide Cases and Deaths

The global COVID19 pandemic is refusing to go away. Day 247 and the dynamics of new cases and daily deaths remain as worrying as ever, just as the public and the politicians have largely settled into the strange 'ignore and forget' pattern of thinking about the threats.

Here are the daily new cases and deaths charts:

Key takeaways from the above two charts are:
  1. There is no amelioration in the pandemic dynamics in terms of new cases: we are still at the peak levels of contagion worldwide.
  2. Earlier hopes for decline in new cases worldwide has now been replaced by a re-acceleration in the new cases arrivals.
  3. Historical average daily new cases is 115,366. Last 30 days average is 263,940 new cases per day and last 7 days average is 267,832. The pandemic is getting worse, not better.
  4. Historical average daily deaths is 3,710. In the last 30 days, the average has been 5,603 and in the last seven days, 5,863. 
  5. The peak of daily deaths occurred back in mid-April owing to a number of factors, that can be considered as exceptional. These include heavy concentration of COVID19 cases, lack of medical experience in treating COVID19 cases, demographic biases in early wave of COVID19 cases, and so on. On-trend, the peak was around 7,000 daily deaths.
  6. Since the peak, daily deaths counts did not decay beyond the local trough around the end of May - a trough that was less than 50 percent lower than the peak (not an impressive moderation for a pandemic). The trough was set at around 4,050 daily deaths.
  7. Since then, however, matters worsened once again, with a new local peak reached at around 6,000 cases in the last week of July. Deaths counts have been bouncing around 5,600-5,700 daily cases since then.
These worrying numbers are confirmed by the dynamics - the rates of change in the series:

As you can see from the chart above, the data is exhibiting a risk of rapid re-acceleration in the pandemic dynamics in terms of both, new case numbers and deaths. Of course, the data is volatile, so it is hard to tell if the new re-acceleration of growth rates to 15.8 and 24.4 percent for new cases and deaths, respectively, is going to hold. Nonetheless, nominally, we are no longer witnessing the second derivative (acceleration) moderating. Which means we are at a risk of rising severity of the already horrific trend. 

Here is a handy summary table of comparative growth rates:

Please note, these are growth rates that are already smoothed by using 7 days average! 

Fir numbers geeks amongst us, here is a summary table of comparatives for 33 countries, plus the EU27, that have more than 100,000 cases reported. Last time I updated these figures on August 30, there were 30 countries in this club.

Due to deterioration in the global pandemic conditions, EU27 is now ranked as an 'average' (statistically) territory. The U.S. remains 'worse than average'. 

The same table by aggregating countries by some internationally-recognized groupings:

And a descriptive statistics table for all countries with > 100,000 cases:

In summary, the pandemic is not going away. We are months before the start of the 'normal' flu season in the Northern Hemisphere, when temperatures outside force much of the activity - work, social, personal - indoors and into closer proximity to others. More inclement weather is coming to the largest concentrations of people on Earth, not only in Europe (already living through the second wave of the pandemic) and North America (still struggling with the first wave), but also to Asia-Pacific and the likes of India (which already outpaced Brazil to the second place in terms of infections after the World Series leader, the US of A). 

The brighter news on the horizon, currently, are the news relating to the vaccines development. But these vaccines are unlikely to hit mass markets any time soon, at least not before the October-November flu season onset.