ifo Institute's latest Business Climate survey data for Germany is pointing to continued weakness in the recovery momentum:
Notably, all four sectors covered remain under water:
Current conditions are deteriorating month-on-month in two sectors, expectations have deteriorated in all four sectors.
I have been running EU vs U.S. comparatives for COVID19 pandemic dynamics for some time now, and as those reading this blog would know, some months ago I added an estimate - based on mortality figures - of the excess U.S. deaths compared to the EU27. These currently - by my estimate - stand at 114,621 (see latest estimate here: https://trueeconomics.blogspot.com/2020/10/231020-covid19-update-us-vs-eu27.html).
My estimate is crude. It is based on timings, population size and mortality rate adjustments.
A more accurate recent estimate has been provided by the Columbia University study (https://resiliencesystem.org/columbia-university-says-trump-could-have-avoided-over-130000-covid-19-deaths-more-robust-pandemic) that puts the number at 130,000-210,000 'avoidable deaths'. That is some range, of course. Per study: "If "the U.S. had followed Canadian policies and protocols, there might have only been 85,192 U.S. deaths – making more than 132,500 American deaths 'avoidable,'" the authors wrote. "If the U.S. response had mirrored that of Germany, the U.S. may have only had 38,457 deaths – leaving 179,260 avoidable deaths."
One way or the other, there are at least 100,000+ Americans dead because of the completely shambolic public health system and policy responses by the current Federal and State leaderships in the U.S.
Columbia study seems to nail some of these factors: "The country's disproportionate death toll stems from delayed federal action, an insufficient testing regimen, a lack of consistent mask-wearing guidance, and the failure of top officials, notably Trump, to model best practices". Alas, predictably (mythology of the American culture), it misses the elephant in the room: the U.S. healthcare system itself. American approach to distributing access to healthcare based on private insurance (plus Medicare and Medicaid) is leaving tens of millions of Americans outside the basic safety net. Those without insurance as well as countless more with the atrociously large deductibles and co-pays are too afraid to present themselves to the hospitals designed to bankrupt people of modest means to seek early support and help. It matters little how much the U.S. authorities test the public (and, yes, tests are highly rationed, still, despite all the bluster from the White House), if people do not seek help in fear of being destroyed financially.
In 2020, the average annual deductible for single, individual coverage is $4,364 and $8,439 for family coverage. Co-pay normally ranges 10-40% of the bill, though it is more complicated, since there are various caps and step-downs in co-payments. (https://www.ehealthinsurance.com/resources/individual-and-family/how-much-does-individual-health-insurance-cost#:~:text=Deductibles%20and%20cost%2Dsharing%20expenses,and%20%248%2C439%20for%20family%20coverage.)
The typical American household has an average of $8,863 in a bank or credit union account. There are serious variations by age and type of household, with couples 34 and younger, couples without children have an average of $4,727 in savings, while single people without children have an average of $2,729 in savings. Couples with children between the age of 35 and 44 have an average of $10,399, couples aged 45-54 with children average $15,589. (https://www.cnbc.com/2019/03/11/how-much-money-americans-have-in-their-savings-accounts-at-every-age.html)
Meanwhile, the median charge for COVID-19 inpatient care was $45,683 for people aged 51 to 60 and $34,662 for those in the 23 to 30 age bracket, according to a recent study. This was the median billed to people without insurance or those who were forced to be treated out of network. The highest average allowed amount paid to the provider under an insurance plan was $24,012 for people aged 51 to 60 and, at its lowest, $17,094 for people above age 70. (https://www.thehealthcareloop.com/hospitalized-care-for-covid-19-averages-34662-to-45683-varying-by-age/)
So a person visit for COVID19 treatment, counting lost wages, would wipe out between 1/2 and all of the savings held by average household. Contagion within the family would be a near insolvency event.
Anyone surprised American system is killing the U.S. citizens and residents?
Two previous posts covered some core labor markets data for the U.S.:
Current reading stands at 3,194,750 which is above the 2008-2011 crisis peak of 3,169,786 and only slightly below all-time pre-COVID19 high of 3,313,000 attained in January 1975.
In absolute level numbers, preliminary first-time claims for the week of October 17, 2020 stand at 756,617 which is still 3 times the rate of first-time claims filings in the last week before COVID19 pandemic onset (March 14, 2020). The good news is, preliminary estimate for the new claims for the week of October 17 suggest a decline in new claims filings of 73,125 on week prior - the fastest rate of reductions in 10 weeks. However, overall average weekly decline in first-time claims over the last 10 weeks has been rather unimpressive at 8,212. At this rate of improvement, it will take almost 62 weeks to draw current first-time claims down to the levels seen in the last pre-COVID19 week.
In the previous post, I covered data for the U.S. Labor Force Participation and Employment to Population Ratios (see https://trueeconomics.blogspot.com/2020/10/241020-us-labor-force-participation.html). Now, let's update the data for Total Nonfarm Payrolls through September:
Here is a genuinely scary table, highlighting the fact that in the COVID19 pandemic, the U.S. sustained jobs losses of the combined magnitude equivalent to those suffered in all recessions from 1980 through the Great Recession:
One of thee major casualties of the COVID19 pandemic has been the U.S. labor market. However, with an allegedly robust recovery under way, we are seeing significant improvements across some metrics of labor markets health. In some, but not all.
Take labor force participation rate:
My last update on Nordics vs Sweden comparatives was a month ago, although I did post some more recent data trends on Twitter since then. Here are the latest numbers:
New deaths counts are relatively benign, both in Sweden and (at a higher rate) in the rest of the Nordics. However, new daily counts in thee Nordics ex-Sweden are literally out of control as a new, and much larger wave of the pandemic sweeps EU27.
Sweden entered the second wave of the pandemic with a delay, compared to other European states, so its numbers are still lagging those in other Nordic states.
I commented on the often-heard argument in favour of Sweden's 'herd immunity' strategy earlier today and you can read it here, if you missed it (bottom of the post): https://trueeconomics.blogspot.com/2020/10/231020-covid19-update-countries-with.html.
It appears, based on Sweden's (amongst others') experiences, that we really have very limited options in terms of public policy response to the pandemic. My five cents, based on multiple observations of experts' advice: we need
Anything short of these will result in stop-and-go swings of the pandemic and knee-jerk policy reactions with rolling shutdowns of the entire economies.
Two weeks ago I pointed out the fact that Russian COVID19 numbers are going exponential as the pandemic clearly entered a new wave dynamic. This trend is still there and death counts are rapidly accelerating as well.
If the chart isn't clear enough, here are the numbers:
This isn't a fluke, nor a product of increased testing, though the latter factor contributes to higher detection numbers, it should be pushing down deaths (earlier interventions should be consistent with better treatment options and outcomes).
Around two weeks ago, Russia new cases went exponential. Now, there are signs of a similar dynamic in the already rising daily death counts.
Some interesting updates to the league tables for countries with > 100,000. Since the last update, five more countries joined the rather sad club, including Sweden (more on this later), and there are now 47 countries around the world with more than 100,000 cases of the disease recorded.
The tables below are organized as a heat map, with green cells reporting statistics that put a country in the 'better than average' category, while orange cells marking countries statistically worse than average:
Things are running out of control in the EU27 and remain out of control in the U.S. of A. Here are the latest daily numbers:
Overall:
The global pandemic is accelerating, not abating:
New cases numbers have set all-time records in the last two days, and daily counts ranked in top 10 in the last 10 days on eight occasions, with the balance two occasions coming in ranked 13th and 15th, respectively. Despite the rising public complacency and fatigue to the pandemic numbers, globally, we are yet to attain the first peak of the pandemic, suggesting that when this does happen, we are likely to be set for an even worse second wave of infections.
Overall, 7-days average for new infections is at a jaw-dropping 390,097, more than 3 times the historical median and up on the 30-days average of 333,024 cases per day.
In deaths counts, things are not looking great either.
Both, growth rates in new cases and in daily reported deaths are now significantly in excess of anything observed since the flattening out of the growth curve starting with mid-May. October rates of deaths and cases are substantially ahead of September rates, indicating that the pandemic is accelerating, not abating.
States, like California within the U.S., and some individual member states within the European Union tend to adopt own-level regulations on harmful emissions in an effort to 'pave the way' for other peer states. These regulations, of course, only apply to the economic agents 'captive' in the state. They do not apply to more mobile companies that can shift their emissions across borders to minimize the impact of more stringent regulations. Even Federal-level standards on pollution abatement are often subject to local applicability variations, resulting in pollution shifting across states' borders in line with the above.
A recent study by Feli Soliman, titled "Intrafirm Leakage" published by CESifo as a Working Paper No. 8619 (https://ssrn.com/abstract=3712780) provides some empirical evidence of exactly such pollution shifting. The study finds that "...multiplant firms partially regulated under the ozone regulations of the US Clean Air Act offset regulation-induced reductions among regulated plants with spillovers to unregulated plants and by moving plants out of regulated areas." Crucially, however, the offsetting decisions are more than sufficient to render overall pollution output un-impacted by the more stringent local regulations: "Taken together, these leakage effects fully offset emissions reductions at regulated plants."
Another interesting finding in the study is that thee effects of this pollution shifting "are strongest among highly productive firms and those operating in tradable industries." In other words, the companies that hold prospect for future growth (and expansion of their pollution output) and have higher likelihood of survival are the very same firms that gain from pollution arbitrage across borders.
Overall, the author concludes that "By themselves, these results imply that expanded ozone regulation under the [Clean Air Act] has not contributed to the clean-up of US manufacturing"
Russian pandemic numbers are getting seriously out of control, once again, and this outrun was pretty much predictable based on early eit from serious restrictions.
Russia managed to lower, but not crush, pandemic pressures between the first wave peak of the second week of May 2020 and the start of July. By mid-August, both new cases and daily deaths counts fell to their post-peak lows. However, starting with September, the pandemic evolved into a second wave, with exponential increase in new cases through today, and deaths following the same trend path.
Here is a summary table of the second wave dynamics:
