26/5/20: COVID19 Impact on Travel and Consumer Demand

Some dire numbers from Factset on changes in consumer preferences / sentiment through March-April 2020:

• "According to The Conference Board, consumer confidence has weakened significantly with the overall index falling from 118.8 in March to 86.9 in April, the lowest reading since June 2014." 
• "... older Americans (aged 55 and over) are much less optimistic than survey respondents under 55. This poses a problem as we look to economic recovery... [as] households in which the head of household is 65 years old or older represent 22% of total household expenditures in the U.S. In addition, this age group dominates spending at full-service restaurants and travel and lodging."

Things are getting worse in travel and transport sectors:

• "According to the International Air Transport Association, global air travel was down 52.9% in March compared to a year earlier, hitting its lowest level since the Global Financial Crisis."
• "In the U.S., jobs in air transportation fell by 27.4% in April."
• "The four major U.S. airlines—American, Delta, United, and Southwest—are prohibited from laying off or furloughing workers until after September 30 as a condition of receiving billions in payroll assistance as part of the CARES Act. But these carriers have been asking employees to take voluntary unpaid or lower-paying leaves, reduced hours, and early retirement."

On travel sector:

• "The April consumer confidence survey shows that just 31.9% of respondents intend to take a vacation within the next six months. This down from 54.9% in February and is the lowest reading ever in the 42-year history of this survey question."
• "We only have monthly personal consumption data through March... In March, consumption on accommodations was down 43.3% compared to February while air transportation had dipped by 53.5%." 

26/5/20: BRICS Growth Forecasts

BRICS and other major emerging economies: growth impact of COVID19

Note: Arrows indicate the change in Bloomberg consensus forecasts for growth and inflation from 2019 to 2020

Source: Bloomberg, Macrobond Financial, Danske Bank

25/5/20: Russia COVID Data Update

Updating Russia COVID19 charts:

Key takeaways:

1. Death rates remain very low by comparatives with other countries, but rising, albeit slowly.
2. Even with one day ahead for Russian data compared to Brazil data, Brazil has now overtaken Russia in total number of cases (363,211 in Brazil vs 353,427 in Russia, and that does not account for higher rates of testing in Russia) and deaths (22,103 in Brazil against 3,633 in Russia). Even adjusting Russian cases for alleged under-reporting, Russian deaths stand at around 5.450, well below those in Brazil. 

There have been numerous theories advanced by different sources as to the Russian deaths being so low. Some are conspiracy-based, e.g. 'Putin is forcing suppression of real numbers', some are methodological, e.g. Russia is reportedly using much higher rates of autopsies in the case of suspected COVID-linked deaths, allowing them to detect better primary causes of deaths. I do not have any information to confirm or deny any specific source, so no speculating from my end. Hence, I report both adjusted and unadjusted/reported numbers in the second chart above.

Here are the BRIICS comparatives:

And for those interested, comparatives to G7+:

For political reasons - re: lack of civilised discourse being feasible on the topic - I do not run comparatives between Russia and other ex-USSR states. 

25/5/20: U.S. vs EU27 COVID Data Update

Updating key charts comparing case counts and deaths relating to COVID19 in Europe vs U.S. Comments in the charts:

Key takeaways:

1. U.S. is leading EU27 in deaths per capita
2. U.S. new cases continue to grow faster than those in the EU27
3. U.S. new cases continue to run at above 20,000 per day for 5 days in a row through May 24th
4. Local peak of 25,434 new cases was registered on 21/05/2020 which marked the highest number of new cases since 14/05/2020.

25/5/20: World COVID Data Update

Here are the key charts - with comments in the charts - reflecting the latest world-wide data on COVID19 cases and deaths:

There are two key takeaways from the above:

1. There is no peaking of new cases arrivals in daily case counts terms. There is an ongoing shift in new cases from advanced economies to the emerging economies.
2. Earlier and more effective detection on new cases, coupled with time lags between deaths and cases recorded means that we cannot, for now, conclude that the death rate from COVID19 has peaked worldwide.

24/5/2020: Trumpassery of Coronavirus

Nero, Rome, burning, all the sort of historical stuff... so, behold the Trumpassery amidst Covid19... (click on the cart to read details):

25/5/20: Irish Employment: COVID19 Effects

Irish data on employment and labour force reported by CSO now comes in two streams: one is COVID pandemic-ignoring, and one accounting for potential effects of the pandemic. Here is the latest release snapshot, covering 1Q 2020:

Not to challenge CSO on their methodology that is based on a cautious interpretation of the COVID19-related new unemployment assistance claims as not being fully reflective of traditional unemployment. However, it is worth doing a simple exercise: taking data reported in the labour force survey for the period of January-March (1Q) 2020, and combining this with April 2020 monthly unemployment claims data. Here is what we get:

• Officially, per 1Q data, there were 2,353,500 people in employment in Ireland at the of March 2020. 
• COVID-19 adjusted, the above number was down to 2,070,371.
• In April 2020, Number of persons out of work, estimated to include COVID-19 claim was 694,683, up 312,372 on March figure.
• Adding April unemployment estimate to 1Q 2020 COVID-19 adjusted estimate of those in employment, estimated April 2020 employment levels in Ireland should be at around 1,758,000.

As illustrated in the chart:

21/5/20: How Pitchforks See the Greatest Economy in the World

Folks with pitchforks don't care for nuance of financial wizardry. Or for econophysics of data-rich markets. They like simple, somewhat stylized facts. So here is how the world of the last 12 years looks to them:

Nothing to add.

21/5/20: Weekly Unemployment Claims: Updated

In the previous post, I have updated one of the charts relating to the U.S. labor market, namely the chart on employment https://trueeconomics.blogspot.com/2020/05/21520-horror-show-of-covid19.html. The data used is a mixture of monthly employment numbers and within-month weekly unemployment claims.

For consistency, here is the chart plotting weekly unemployment claims based on half-year cumulative numbers:

21/5/20: The Horror Show of COVID19 Unemployment

New initial claims data is out for last week, and so time to update one of my scary charts:

Here is a summary table:

At 2,174,329 new claims filed in the week ending May 16th, the lowest number in weekly new claims since the start of the COVID19 pandemic, it's quite tempting to say that things are improving in the labor markets. Alas, last week's print was greater than the entire recession period combined prints of four past recessions.

Cumulative first claims filed in the last 9 weeks now stand at 35,276,270, which amounts to 23.2 percent of the entire non-farm labor force in the U.S. at December 2019. 

20/5/20: Post-Covid Workplace: More of the Old or Less of the New?

A couple of neat snapshots for the post-COVID world came out of the two recent surveys by the Irish CSO, as summarized in the following two charts:

Let me explain. We have been bombarded by 'the future will be vastly different' messages from all the consultancy firms striving to grab a piece of the post-COVID recovery action. One of the key messages in this chorus of cash hungry voices has been the idea that the future workforce will be employed in radically different ways to the pre-COVID status quo ante.

Now, what the above charts show is:

1. Businesses have indeed migrated to the remote work platforms with COVID19 shutdown measures. However, remarkably, only 30.5% of all Irish employers have moved majority of their staff to work remotely, and 23.4% of them did not alter working arrangements for the majority of their employees. The gap is just 7.1 percentage points. Significant, but not very large, given the strictness of Irish restrictions. Only 31.1% of all enterprises have adapted new methods of providing products and services (production capacity), while 52% have adapted new means of communications. In other words, there has been a sizeable, but not a dominant shift in actual business activity.
2. Employees, in contrast, have no desire to continue working remotely. only 6.6% of male employees and 6.9% of female employees would want to continue working from home. 60.9% of male and 43.9% of female employees would like to have a hybrid choice of sometimes working from home and sometimes being deployed in their place of work. 

So the future does not seem to be dominated by employees willing to accept work from home arrangements. Meanwhile, there is no evidence that non-traditional or new methods of works are taking root in businesses, especially if one controls for the severity of Irish social distancing restrictions.

May be, we are not going to the status quo ante of the pre-COVID world when it comes to workplace arrangements. Yet, may be, the new normal won't be all that radically distinct from the status quo ante either. Middle of the road future?

20/5/20: BRIICS and G7: COVID19 Stats Summary

Given the amount of politicised vitriol surrounding the U.S., European, Russian, and now also Brazil data reporting, here is a snapshot of reported cases and deaths numbers for a range of countries:

Note: for G7, the '0.3' number reported in the last cell should read 258.7 instead.