8/10/20: COVID19 Update: U.S. vs EU27

 Updating data on pandemic development through 07/10/2020 for the U.S. and EU27:

• The EU27 are now experiencing a second wave of infections, while the U.S. new infections rate has moderated off the prior peaks, although moderation is relatively weak and daily cases are highly volatile.
• As the result, in the last 10 days, EU27 new case numbers have surpassed the U.S. on 4 occasions and deaths on 2 occasions. Over the last 30 days, numbers of new cases in the EU27 exceeded those in the U.S. over 9 days, while numbers of daily deaths were higher in the EU27 on four occasions.

Daily averages for each month of the pandemic are summarized in the table below, while daily counts with 7 days average are shown in the charts:

• The U.S. has a vastly higher death rate per 1 million population than the EU27 rate: current death rate per 1 million of population in the U.S. is 642.5; and current death rate per 1 million of population in the EU27 is 335.2
• Put differently, current U.S. death rate per capita is 92 percent above that for the EU27.
• Overall counts of deaths in the U.S. remain above the EU27, since July 12. Current excess gap is at +62,928.
• Adjusted for population differences, the U.S. has 100,517 more deaths than the EU27. Adjusted for later onset of the pandemic in the U.S., America's death toll from COVID19 to-date is 114,621 higher than that of the EU27.
• The 7-day moving averages of new cases in the EU27 and the U.S. are now almost identical. The EU27 is already in the second wave of the pandemic, but the U.S. is showing signs of the second wave starting, with a significant uptick in the 7-days average since September 12 lows.
• Both, the EU27 and the U.S. deaths counts are now running above the levels at which Winter 2020 lockdowns were imposed.

Meanwhile, American leadership is switching to a new strategy in addressing COVID19, called 'Don't Panic: Get Yerself Covided! Suckers!' https://twitter.com/i/status/1313267615083761665. Which totally makes sense for more than 70 million Americans who cannot afford COVID19 treatment without filing for bankruptcy, and another 30-40 million Americans who cannot medically handle COVID19 because of existing conditions. 

7/10/20: COVID19 Update: Countries with > 100,000 cases

 

Updating tables for the countries with more than 100,000 cases of COVID19:

• There are now 40 countries with >100,000 cases and 12 countries with > 500,000 cases. 
• The U.S. continues to lead the world in the number of cases and number of deaths: the country accounts for 4.3 percent of world population, 21% of diagnosed COVID19 cases and 20% of attributed deaths.
• EU27 accounts for 5.9% of the world's population, 7% of all cases, but 14% of world's deaths.
• BRIICS+Turkey account for 46.5% of world's population, 40% of world's cases and 30% of attributed deaths.
• 8 of the EU27 countries are on the list of countries with > 100,000 cases.
• In overall performance rankings, the U.S. is ranked within the group of 'worse-than-average performers' (8th worst in the group of 40), while the EU27 ranks within-average (18th worst performer, if it were a country), the UK ranks 9th worst performer, with Peru remaining the hardest hit country of all countries with > 100,000 cases, with Bolivia second and Belgium third.

7/10/20: COVID19 Update: Worldwide Cases and Deaths

 

Updating new data for COVID19 new cases and deaths through October 7, 2020 (ECDC data timeline):

Globally, we remain in the first wave of the pandemic both in terms of new cases arrivals and death counts:

What the numbers above are telling us:

• New cases arrivals trend at 298,196 per day over the last 7 days, albeit with increasing daily volatility due to a number of countries with large case numbers switching to less regular reporting of cases in recent weeks. The daily average for the last 7 days is in excess of the 30-days average of 286,123 and well above the historical average of 130,960. In terms of new cases, therefore, we are still in the first wave of the pandemic, and now past the first period of moderation in the infections spread that took place from, roughly during August.
• Daily deaths counts are currently at 5,399 for the last 7 days, which is lower than the 30-days average of 5,642, but still well above the historical average of 3,848. Some observers have noted in recent weeks that the deaths curve is down somewhat on the local peak attained around the first week of August. The decline, however, is very shallow and is driven not only by the improved treatment and detection, but also by the changing demographic of new cases (younger and healthier patients becoming impacted). There is, most likely, a residual issue of changes in geographies of new cases, that also impacts reporting and assignment of deaths. In simple terms, core data shows no encouraging trends so far in terms of daily deaths counts: the pandemic's Wave 1 continues. 

The above analysis is reflected in the growth rates. Stripping out some daily volatility, here are 7-day rolling average changes in both deaths and new cases:

The worrying trend in both series shown above is: 

• 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.
• October (to-date) growth rates in both series are not only double-digits high, but are well above June-August averages and historical averages. They are also stronger than September averages. Tables below summarise these facts:

I will update other data sets on COVID19 pandemic evolution in subsequent posts, but the global trends clearly show that we are in a continued state of global pandemic still raging unabated.

Note: for those keen on looking at more recent changes, see my prior post on the same subject here: https://trueeconomics.blogspot.com/2020/09/25920-covid19-update-worldwide-cases.html. 

4/10/20: Technological Deepening Is Coming for Our Jobs

 

In my recent article for The Currency (link here: https://trueeconomics.blogspot.com/2020/09/my-recent-article-on-potential-long.html), I argued that COVID19 will act as an accelerator of technological capital deepening in the modern economies, with a resulting faster displacement of workers (including highly skilled ones) by technology. 

McKinsey survey of the developing trends in businesses strategic responses to the pandemic confirms my hypothesis:

Per above, across all sectors, and (peer charts below) across specific sectors, businesses are planning to prioritize deployment of technology in addressing long-term change in response to the current pandemic. 

McKinsey state that "Fifty-five percent of leaders anticipate that at least half of their organization’s workforce will be fully or partially remote postcrisis. While the expectations vary widely by industry—from 69 percent predicting this level of remote work in technology, telecommunications, and media to 43 percent in advanced industries—even in the industries where manufacturing, patient care, and sales transactions often require people at offices, stores, plants, and other company facilities, a significant portion of the workforce may be partially or fully remote." Source: https://www.mckinsey.com/business-functions/organization/our-insights/the-need-for-speed-in-the-post-covid-19-era-and-how-to-achieve-it. And "Our survey results show that executives are focused on three courses of action ... making good decisions more quickly, improving communication and collaboration, and making greater use of technology."

3/10/20: Identity & Risk: Financial Services in a Time of Transformation & Uncertainty

 

Delighted to announce that I will bee keynoting October 22 conference Identity & Risk: Financial Services in a Time of Transformation & Uncertainty.

Details here: https://www.ptools.com/draft/conference-home-page/2020-annual-global-virtual-conference.html.

3/10/20: Eurocoin Leading Growth Indicator 3Q 2020

 

Eurocoin, a leading growth indicator for the euro area published by CEPR and Banca d'Italia posted another negative (recessionary) reading in September (-0.31) after marking peak growth contraction of COVID19 pandemic period in August (-0.64). This puts Eurocoin in negative territory for the 6th consecutive month since March 2020. 

Current forecast for 3Q 2020 growth remains at -3.5 percent q/q. Deflationary pressures are also building up. Euro area's 12 months average HICP forecast for 3Q 2020 stands at around 0.6 to 0.5.

As the chart above shows, Eurozone remains deeply in a recessionary territory based on Eurocoin forecasts and inflation dynamics. Longer term growth averages are shown in the chart below:

Overall, as noted above, one must take all leading indicators and forecasts with some serious warnings attached: we are in an environment where past models for forecasting economic aggregates become severely challenged.

3/10/20: BRIC: Manufacturing PMIs Q3 2020

 

Based on July-September data, here are the main takeaways from the BRIC Manufacturing Sector PMIs for 3Q 2020:

• Brazil Manufacturing PMIs gained serious speed in 3Q 2020 compared to 2Q 2020, rising from a recessionary reading of 42.0 in April-June to signal rapid recovery at 62.6 over the last three months through September. This marks the highest quarterly reading on record for the country Manufacturing sector. Dynamically, growth accelerated in every month since the start of the sector recovery in June 2020.
• Russia Manufacturing PMI came in at a disappointing and contractionary 49.5 in 3Q 2020, marking the fifth consecutive quarter of sub-50 readings, although still an improvement on the pandemic period low of 39.0 set in 2Q 2020. Adding pressure to the already poor performance, monthly PMI reading slumped from a relatively weak recovery signalled by PMI at 51.1 in August to a recessionary reading of 48.9 in September. 
• India Manufacturing PMI rose from 52.0 in August to 56.8 in September, with 3Q 2020 reading at 51.6 - a substantial but likely incomplete recovery on the pandemic low of 35.1 set in 2Q 2020.
• China Manufacturing PMI rose from 2Q 2020 reading of 50.4 to 3Q 2020 reading of 53.0, implying almost a full recovery in the manufacturing sector on 1Q 2020 pandemic period trough of 47.2. September marked a fifth consecutive month of PMI readings above 50.0. 

Overall, BRIC weighted Manufacturing Activity Index (based on monthly PMIs) stood at 53.0 in 3Q 2020, up on 45.0 in 2Q 2020 and 49.1 in 1Q 2020. Current reading signals the fastest q/q growth in the sector since 1Q 2011. The ongoing recovery across the BRIC economies is faster than Global Manufacturing PMI recovery (at 51.6), albeit highly uneven and somewhat suspicious. The core driver for this growth is Brazil, where manufacturing data dynamics is completely out of touch with services data dynamics and looks extremely unreliable. 

2/10/20: SSIR on our Social Impact Investment project

 

An article about our long-running social impact (public health impact) investment project partnership with the Stanford University team is now available via the Stanford Social Innovation Review: https://ssir.org/articles/entry/river_helpers. 

2/10/20: A new mortgage arrears crisis on its way

 

My latest article on Irish banking sector problems with distressed mortgages is out today in The Currency: 

There’s a new mortgage arrears crisis on its way, and official Ireland is not ready for it

The Central Bank of Ireland has started publishing new data on mortgage arrears – and the news is not good. An arrears crisis is brewing. The banks, and the state, are woefully unprepared for it.

https://thecurrency.news/articles/24779/theres-a-new-mortgage-arrears-crisis-on-its-way-and-official-ireland-is-not-ready-for-it/ 

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 https://trueeconomics.blogspot.com/2020/09/26920-americas-scariest-charts-duration.html). 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:

• Continued unemployment claims: https://trueeconomics.blogspot.com/2020/09/26920-americas-scariest-charts_27.html, and
• Initial unemployment claims and employment: https://trueeconomics.blogspot.com/2020/09/26920-americas-scariest-charts_27.html

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: https://trueeconomics.blogspot.com/2020/09/26920-americas-scariest-charts_27.html) 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.