1/2/21: The Unbearable Lightness of Winning?

My recent article for The Currency on some tight corners to be navigated by the Biden-Harris Administration as the Democrats grapple with controlling the two branches of the State: https://thecurrency.news/articles/33887/biden-harris-and-the-unbearable-lightness-of-winning/ 

6/1/21: BRIC: Composite Economic Indicators: 4Q 2020

• Manufacturing PMIs for BRIC economies for 4Q 2020 are discussed here: https://trueeconomics.blogspot.com/2021/01/4121-bric-manufacturing-pmis-4q-2020.html.
• Services PMIs are covered here: https://trueeconomics.blogspot.com/2021/01/6121-bric-services-pmis-4q-2020.html.

Now, Composite PMIs:

• Brazil Composite PMI rose from 51.6 in 3Q 2020 to 54.4 in 4Q 2020, marking second consecutive quarter of > 50.0 readings. Average 4 quarters PMI stands at 46.2, suggesting that Brazil's economy has not, yet, recovered fully from the Covid19 pandemic impact. Nonetheless, statistically, both 3Q and 4Q readings are signaling economic expansion and 4Q growth in Brazil's economy appears to be faster-paced than global (global composite PMI was at 53.3 in 4Q 2020).
• Russia Composite PMI is in a contraction territory, with 4Q 2020 reading of 47.7, down from 55.9 in 3Q 2020. Over the course of 2020, Russia Composite PMI averaged 46.0, the second weakest in the BRICs group. At 47.7, 4Q 2020 PMI is exactly in line with 1Q 2020 PMI.
• India Composite PMI rose from 45.9 in 3Q 2020 to 56.4 in 4Q 2020, signaling rapid bounce back in the economy, that, nonetheless continues to suffer from the pandemic-induced economic crisis. Full year 2020, Composite PMI average is at 44.3, by a distance, the lowest in the BRICs group. 
• China Composite PMI rose from 54.7 in 3Q 2020 to 56.3 in 4Q 2020, marking third consecutive quarter of economic growth, with full year PMI averaging 51.4, suggesting that the Chinese economy has now recovered fully from the Covid19 pandemic impact. 

Overall, three out of four BRIC economies posted 4Q 2020 Composite PMI above Global Composite PMI: Brazil, India and China, with Russia being the only BRIC economy posting both sub-Global and sub-50 Composite PMI reading at the end of 2020. Only one BRIC economy has, so far, signaled full recovery from the Covid19 crisis shock: China, with all other BRICs still recovering from the pandemic.

Given that both BRIC Manufacturing Sector Activity Index (54.9 in 4Q 2020) and BRIC Services Sector Activity Index (54.8 in 4Q 2020) are above Global Manufacturing (53.5) and Services (52.3) PMIs, BRIC economies as a group have supported global economic growth to the upside in 4Q 2020. In contrast, BRIC Manufacturing Activity Index outperformed Global Manufacturing PMI in 3Q 2020 (53.0 to 51.6), while BRIC Services Activity Index (51.0) underperformed Global Services PMI (51.4). 

6/1/21: BRIC: Services PMIs: 4Q 2020

 

BRIC's manufacturing PMIs for 4Q 2020 were covered here: https://trueeconomics.blogspot.com/2021/01/4121-bric-manufacturing-pmis-4q-2020.html. Now, to Services PMIs:

• Brazil Services PMI rose from 47.5 in 3Q 2020 to 51.4 in 4Q 2020, with aggregate 2020 levels of activity still significantly below 2019 levels. At 51.4, the index is barely statistically above 50.0 (95% confidence bound is 51.3). However, the latest quarterly reading is the first nominally above 50.0 after three consecutive quarters of sub-50 readings. 
• Russia Services PMI crashed in 4Q 2020 from 56.8 in 3Q to 47.7. Statistically, Russian services sector is contracting and it is contracting rapidly. In the entire 2020, there were three quarters of deeply sub-50 readings against one quarter of above 50.0 expansion. Services sector reading is basically identical to 47.6 recorded in Manufacturing sector, which means that in 4Q 2020 there was no 'comfort zone' in the Russian economy in terms of growth.
• India Services PMI rose significantly in 4Q 2020 compared to 3Q 2020, from 41.9 to 53.4.  However, this growth is unlikely to bring India's services activity anywhere near pre-Covid19 levels. 
• China Services PMI rose for the third consecutive quarter in 4Q 2020. In 2Q 2020, China's Services PMI was at 52.6, which increased to 54.3 in 3Q 2020 and to 57.0 in 4Q 2020. Nonetheless, it is still doubtful that Chinese services activities have fully recovered from the pandemic as of the end of 2020.
• Overall, BRIC Services Activity Index based on PMIs and respective GDP shares in the global economy rose for the second quarter in a row from 51.0 in 3Q 2020 to 54.8 in 4Q 2020. This marks some recovery from the Covid19 pandemic impact, although this recovery remains incomplete. BRICs have - as a group - outperformed Global Services PMI which rose from 51.4 in 3Q 2020 to 52.3 in 4Q 2020.

5/1/21: Ireland PMIs: 4Q 2020

Ireland's economic activity improved significantly in December, and the improvements were marked across all three sectors:

• Ireland's Manufacturing PMI rose 52.2 in November to 57.2 in December, marking the third consecutive month of > 50 readings, the second consecutive month of indicator being statistically above 50.0 line. The last three months average (53.23) is on 2Q 2020 average (53.30) and this is pretty encouraging, given the weakness in the indicator over 1H 2020. 
• Ireland's Services PMI also rose in December, reaching 50.1 from recessionary 45.4 in November. 4Q average is still weak at 47.9 (contractionary) after being effectively stagnant at 50.03 over 3Q 2020. Monthly increase in December, however, is a brighter spot.
• Ireland's Construction sector PMI (data through mid-December) is at 53.5, which is strong compared to month prior (48.6) and the first time the index is above 50 line since July 2020. 
• Official Composite PMI that accounts only for two sectors of activity (Manufacturing and Services) is now at 53.4, having broken above the 50.0 line for the first time since August 2020.

As you know,  I calculate my own index of economic activity based on all three sectors PMIs and using relative weights of each sector in Irish Gross Value Added, based on the latest National Accounts data. This is plotted against Markit's Composite PMI in the following chart:

Just as Composite PMI, my index of economic activity also rose in December (to 52.9) from 48.2 in November. This marks the first month of above-50 readings after 3 consecutive months of contraction. Nonetheless, 4Q 2020 index is at 50.03 - signaling zero growth q/q and this stands contrasted to 3Q 2020 reading of 51.2 (statistically zero growth, nominally, weak positive growth).

5/1/21: U.S. Labor Markets Update: America's Scariest Charts

Continued unemployment claims (based on seasonally-adjusted data) are continuing to decline, as the latest data through mid-December 2020 shows, yet, even with these news, the latest data print puts continued claims for unemployment at the levels comparable with late 2009. 

So here is the chart showing overall levels of continued unemployment claims in the U.S.:

And here is one of my "Scariest Charts", showing index of continued unemployment claims across all modern recessions:

Given current rates of continued unemployment claims declines, 

• Over the last 4 weeks, average weekly decrease in continued unemployment claims stood at 77,000
• Current levels are 3,570,000 higher than pre-Covid low.
• Which means that it would take roughly 46 weeks at the current 4-weeks average rate of decrease to eliminate surplus unemployment generated by the Covid19 pandemic. Which is pretty much the same distance to point of regaining pre-Covid19 levels of unemployment claims as well.

Meanwhile, some bad news from the most recent data on new unemployment claims:

In December 2020, new unemployment claims rose, not fallen, on 4 months cumulative basis due to a large increase in non-seasonally adjusted new claims in the first week of the month. How bad are things? Most recent data point ranks 33rd highest new unemployment claims weekly count in the entire history of the series (since July 1967). However, excluding other weeks of Covid19 pandemic, or, put differently, contextualizing current levels to pre-Covid19 history, the latest levels of new unemployment claims would have ranked as 5th highest in history.

4/1/21: BRIC: Manufacturing PMIs 4Q 2020

Latest data for BRIC Manufacturing PMIs indicates three countries outperforming global rate of recovery in manufacturing sector, against one country (Russia) remaining in contraction territory and well below global growth mark.

On a quarterly basis,

• Brazil's Manufacturing PMI stood at 64.1 in 4Q 2020, up on 62.6 in 3Q 2020, marking the second highest and the highest reading on record. The contraction in 2Q 2020 (with PMI at 42.0) was sharp, but not as sharp as in 1Q 2009. By these comparatives, GFC-related contraction of 2008-2009 resulted in 4 quarters average reading of 45.1 and saw three consecutive sub-50 readings. The Covid-19 related contraction was stretched only across one quarter, with 4 quarters average of 54.8 in 2020. It is, genuinely, hard to reconcile these numbers with reality of the Covid-19 crisis.
• Russia Manufacturing PMI slipped to 47.6 in 4Q 2020 from 49.5 in 3Q 2020, marking sixth consecutive quarter of sub-50 readings. Statistically, Russian Manufacturing posted no growth (> 50 readings) in seven consecutive quarters. Over 2020 as a whole, Russian PMIs averaged abysmal 46.0, compared to the GFC and the Great Recession average of 2008-2009 of 44.7.
• India Manufacturing PMI was at 57.2 in 4Q 2020, up on 51.6 in 3Q 2020, and averaging 49.5 for the year as a whole. During the GFC and the Great Recession period, India's PMI averaged at 51.1. Unlike Brazil, India is yet to recover to pre-Covid-19 levels of activity.
• China Manufacturing PMI finished 2020 with a reading of 53.9, averaging 51.1 over 2020 as a whole, with overall PMIs performance suggesting that Chinese industrial producers have recovered from the Covid-19 pandemic by the end of 2020. China's Covid-19 experience has been more benign than the country contraction during the GFC and the Great Recession (46.9 average).

Global Manufacturing PMI stood at 53.5 in 4Q 2020 and an average of 49.3 over 2020 as a whole, against BRIC's Manufacturing Index (weighted by relative global GDP shares of the four economies) at 54.9 in 4Q 2020 and 50.5 for 2020 as a whole. In other words, BRICs have supported global growth to the upside during the Covid-19 pandemic. 

3/1/21: Covid19 update: Sweden vs Nordics

 

As before, let's conclude the latest update of the Covid19 trends data with analysis covering comparatives between Sweden and other Nordics. 

Sweden is commonly used as a shining example of 'saving the economy' by not 'panicking' into severe mobility restrictions. This argument is commonly used by the folks who tend to believe in sinister Big State conspiracies around other countries' responses to the pandemic.

Sweden started the pandemic by openly pursuing the strategy targeting 'herd immunity'. In this, the country approach to the pandemic containment was similar to that of the Netherlands. However, unlike Sweden, the Netherlands quickly reversed this approach and switched to the more common policy response of imposing severe mobility restrictions.

When it comes to the Nordic countries, there has been both some significant heterogeneity in Covid19 policies responses and some shared experiences. To reflect some of these, I look at three Nordics groupings to compare these with Sweden:

• Nordic 1 group comprising Sweden's immediate neighbors of Norway and Finland. This is the 'closest' group to Sweden as the three countries share relatively open borders and, in normal times, have no mobility restrictions between them. All three countries are physically remote from the rest of Europe, with far less mobility across borders to third countries than, say, Belgium or the Netherlands.
• Nordic 2 group adds Iceland and Estonia to the first group. Iceland is, obviously, an island nation that is also relatively well isolated in physical terms, making its border controls more effective. Estonia is a country that is not physically isolated, but shares less physical land-based borders with the rest of the EU (ex-Finland). Both, N1 and N2 groups are, therefore, characterized as those countries which can impose more effective control of their borders for the purpose of isolating during the pandemic.
• Nordic 3 group adds two key countries that have much less capacity to isolate from the Continental EU states: Denmark and the Netherlands. 

So, here are the updated charts, in which I adjust all three groups to normalize cases and deaths numbers to Sweden's population scale:

As of the end of 2020, cumulative excess deaths in Sweden compared to other Nordics, adjusting for differences in population sizes are:

• 7,545 more deaths in Sweden than in Nordics 1 group of Finland and Norway;
• 7,359 more deaths in Sweden than in Nordics 2 group of Finland, Norway, Estonia and Iceland; and
• 3,808 more deaths in Sweden than in Nordics 3 group of Finland, Norway, Estonia, Iceland, Denmark and the Netherlands.

Put differently, between 3,800 and 7,545 more deaths took place in Sweden than in its relatively comparable European neighbors, primarily because Swedish Government prioritized economic well-being over public health.

2/1/21: Covid19 update: U.S. vs EU27

In previous posts, I covered Covid-19 updates for the last week of 2020 for:

• Worldwide trends: https://trueeconomics.blogspot.com/2021/01/2121-covid19-update-worldwide-numbers.html;
• Europe and the EU27: https://trueeconomics.blogspot.com/2021/01/2121-covid19-update-europe.html; 
• Countries with more than 250,000 cases: https://trueeconomics.blogspot.com/2021/01/2121-covid19-update-countries-with-250k.html; and
• BRIICS: https://trueeconomics.blogspot.com/2021/01/2121-covid19-update-briics.html.

In this post, let's take a look at the latest data for the U.S. compared to the EU27.

Weekly counts of new cases and deaths, illustrated above, suggest that:

• Since the start of the pandemic, the U.S. has experienced three waves, against the EU27's two of the pandemic. The EU27's 2nd wave appears to have crested in week 45, while the U.S.' current wave continued to rise through week 51 of 2020. Week 52 data is hard to interpret, as it represents poorer quality of data due to the holidays season.
• Over the last 8 weeks, US new cases exceeded those in the EU27 by 337,233.
• The EU27's 2nd wave appears to have crested in week 48 in terms of deaths, while the U.S.' current wave continued to rise through week 51. Once again, we should ignore, for now, week 52 data.
• Over the last 8 weeks, US new deaths continued to run below those in the EU27. On population-adjusted basis, US deaths cumulated over the last 8 weeks are 33,622 lower than those in the EU27. Over the entire pandemic period, US deaths currently exceed those in the EU27 by 69,416 on population-adjusted basis.

The last point is worth considering more closely:

• Since the start of Wave 2 in the EU27 (Wave 3 in the U.S.), EU27 deaths per capita have been converging with those in the U.S.
• At the start of the EU27 Wave 2, U.S. excess total deaths per capita exceeded those in the EU27 by 87%. Latest excess is 26% and it was 28% in week 51.
• Adjusting for differences in population, U.S. excess deaths relative to the EU27 fell from the Wave 1 maximum of 103,038 to 69,389 today. 
• Adjusting for differences in population, U.S. excess deaths relative to Europe fell from the Wave 1 maximum of 122,441 to 117,690 today. 
• Adjusting for age differences and population size differences, the U.S. pandemic is associated with 135,343 excess deaths compared to the EU27.

Despite the big negatives, mortality rates have declined for the later waves of the pandemic in both the EU27 and the U.S.:

Note: the above chart is not adjusted for demographics differences between the U.S. and the EU27, which means that part of the amelioration in mortality rates in the U.S. relative to the EU27 is down to these differences.

Lastly, rates of change in cases and deaths, both, suggest that the pandemic Wave 2 (in the EU27) and wave 3 (in the U.S.) are still at risk of re-accelerating as new data arrives and as we intergate more accurate figures for Week 52 of 2020:

Finally, a summary table for comparatives:

The table above clearly shows the reality of the pandemic impact differences between the EU27 and the U.S. to-date. Through week 52 of 2020, the U.S. performance is consistently worse than that of the EU27 in all metrics, but one: mortality rate per 1,000 positive cases. This only difference is most likely accounted for by the factor exogenous to the pandemic policy responses in the two countries, being down primarily to younger demographics of the U.S. population.

2/1/21: Covid19 update: BRIICS

 In previous posts, I covered Covid-19 updates for the last week of 2020 for:

• Worldwide trends: https://trueeconomics.blogspot.com/2021/01/2121-covid19-update-worldwide-numbers.html;
• Europe and the EU27: https://trueeconomics.blogspot.com/2021/01/2121-covid19-update-europe.html; and
• Countries with more than 250,000 cases: https://trueeconomics.blogspot.com/2021/01/2121-covid19-update-countries-with-250k.html.

Cumulative data for BRIICS (Brazil, Russia, India, Indonesia, China and South Africa) shows continued steady expansion of the pandemic in total cases and deaths:

• Currently, BRIICS account for 28.2% of all cases of Covid-19 in the world, and 25.3% of all deaths. This compares to these countries accounting for 45.3% of the world population.
• The pandemic has been relatively benign for this group of countries. If BRIICS were ranked as a stand-alone country within the group of 40 countries with more than 250,000 cases, BRIICS would have ranked 38th worst in terms of cases per 1 million of population, 37th worst in terms of deaths per capita, and 28th in terms of deaths per case. 
• BRIICS data, however is highly heterogeneous by country: 
• Brazil ranks 11th worst-hit country in the world in terms of infections rate, death rate per capita and mortality rate; 
• Russia ranks 28th;
• India ranks 38th;
• Indonesia 31st;
• China is unranked (officially, the country has fever than 250,000 cases, although overall robustness of the Chinese data is highly questionable); and
• South Africa ranks 22nd worst.
• No BRIICS country enters the league of 22 countries most-impacted by the pandemic (defined as countries with infection rate of 4% of population and higher).

Most current summary of key stats is below:

Now, to dynamics and trends.

BRIICS weekly case numbers are on the sustained rise, once again, since the trough achieved in week 45 which marked the end of the Wave 1 and the start of Wave 2 of the pandemic:

India and Brazil are showing robust and weakly-robust declines in weekly cases, while Russia and South Africa are showing robust increases. Other BRIICS are on a weak upward trend. Put frankly, my expectation is for a rise in India cases in weeks ahead as the new wave of the pandemic starts to take hold. Brazil being in a summer season is likely to have a longer lead time into the new wave.

Rather similar dynamics are taking place in deaths counts:

One key feature of the data is, of course, the clearly unreliable data from China that skews overall picture for the BRIICS group as a whole. If China's data was running at 0.75-0.9 of the average BRIICS rates, the country would have reported over 9.26 million cases (as opposed to the officially-reported 96,292 cases) and 183,400 deaths (compared to the officially-reported 4,771 deaths). It is worth noting here that these estimates reflect BRIICS rates that include official China statistics (downward bias to the estimates). What is quite amazing is not the actual numbers themselves, but the nearly total silence on the state of the Chinese statistics in much of the Western media, despite the order of differences between China and other BRIICS. Take a look at the comparative table here:

Russian stats: scrutinized left, right and center on every op-ed and news page of all major media outlets in the West are pretty much bank-on as expected: worse than average in infection rates, worse than average in deaths per capita, roughly (statistically) below average in terms of mortality rate. Similar for India. China's data is a complete and total outlier, and yet not a peep from the mainstream news. 

2/1/21: Covid19 update: Countries with > 250K cases

 

In previous posts, I covered worldwide trends for Covid19 pandemic evolution (https://trueeconomics.blogspot.com/2021/01/2121-covid19-update-worldwide-numbers.html) and pandemic developments in Europe and the EU27 (https://trueeconomics.blogspot.com/2021/01/2121-covid19-update-europe.html). Here, let's take a look at the set of countries with more than 250,000 confirmed cases.

As of week 52 of 2020, there were 40 countries in this group, accounting for 90 percent of the world total number of cases, 92 percent of the global deaths and 64 percent of the world's population. 

Tables below provide summary statistics for these countries:

You can click on the charts to magnify them.

The same data reported by regions and continents:

And a table of summary statistics:

Some noteworthy observations from the above:

• The U.S. is the worst performing major advanced economy when it comes to the pandemic trends: it ranks 2nd worst in the world in terms of its numbers of Covid19 cases per 1 million of population, 7th worst in the world in terms of its death rate per capita, but a reasonably-benign 25th in the world in mortality rate (deaths per positive test case). Using the three metrics mentioned, the U.S. ranks 6th worst performing country in the league of all countries with > 250,000 cases.
• The UK ranks even worse than the U.S. The country ranks 15th worst in the world in the rate of infections (Covid19 positive tests per capita), and 5th worst in deaths per capita and deaths per positive case. Across all three metrics, the UK ranks third worst in the world.
• Belgium ranks the worst major country in overall pandemic impact terms (cases per capita, deaths per capita and deaths per case), followed by Italy in the second place. The UK, as mentioned above ranks the third, Spain forth, Peru fifth, the US and Argentina tied in the sixth place, Hungary comes in 8th, Czechia 9th and France 10th. Thus, six out of the 10 worst hit countries in the world are EU27 members.
• In mortality terms (deaths per 1,000 cases), Mexico is the worst-performing country with 88.42 deaths per 1,000 positive cases; followed by Iran (45.56), Peru (37.19), Italy (35.12) and the UK (30.52). Overall, only 6 countries have mortality rates > 30 per 1,000 positive tests.
• There were 7 countries with more than 1,000 deaths per 1 million of population, and only 4 countries with infection rate of > 50,000 cases per 1 million of population.

Another summary table, showing relative contributions of each country to global cases and deaths, as well as their relative shares of total global population:

The above highlights once again the severity of the pandemic in the U.S., the UK and the EU27.

2/1/21: Covid19 update: Europe

 

Introducing new analysis for Europe and EU27 across the main metrics of the pandemic (see data note and coverage of worldwide trends here: https://trueeconomics.blogspot.com/2021/01/2121-covid19-update-worldwide-numbers.html). All data through week 52 of 2020.

Europe is continuing to experience Wave 2 of the pandemic, while EU27 is on the abating part of the pandemic curve, albeit with some volatility to the upside, especially in weeks 49-51. The above data is yet to fully reflect the beginning of the new strand of the virus (commonly referenced to the UK as the country of origin, although this appears to be a questionable reference point).

In terms of deaths, peak of the Wave 2 of the pandemic can now be timed to week 48, although in the last two weeks of 2020 there is some evidence emerging of re-amplification to the pandemic in Europe. 

Mortality rates have moderated at the peak of the Wave 2, hitting a trough at 23 per 1,000 cases, and staying at 23-24 since week 45:

Meanwhile, death rates per capita rose in the last week of the year to 797.4 per 1 million of population in EU27, up from 592.3 a month ago, and 651.5 in the Europe, up from 482.8 a month ago.

And a summary table of comparatives:

Overall, we can now call the peak of the Wave 2 of this pandemic at weeks 45 (in terms of new cases) and week 48 (in terms of deaths). That said, we can expect re-acceleration of both trends in weeks ahead as a new contagion wave develops following the last two weeks of the 2020. 

2/1/21: Covid19 update: Worldwide numbers

 

Starting the new year of data analysis for Covid19 pandemic, I have re-configured the charts and my database to reflect changes in ECDC reporting from daily to weekly aggregates, as reported through Thursday each week. The result is smoother data series, allowing for clearer analysis of the key trends. The downside, of course, is the lags in data reporting.

Please, note for the future: weekly data is subject to revisions by the ECDC.

First post, Worldwide figures and trends.

As of the last week of 2020, worldwide cases of positive tests have reached 80,177,400, with seventh consecutive week of above 4 million new cases reported on a weekly basis. The last week of the year data is subject to future revisions and reflects low accuracy of reporting due to holidays. Nonetheless, the pandemic shows no signs of de-acceleration globally in both cases and deaths.

As pointed out in the chart above, it is too early to call the peak of the Wave 3 of the pandemic, yet. Excluding the last week of the year, prior three weeks saw re-acceleration of the trend in new cases. Week 51 of 2020 saw the highest number of new cases on record at 4,534,601. 

Cumulated number of Covid19 related deaths reached 1,767,037 at the end of 2020, with week 52 marking the fifth consecutive week of > 70,000 new deaths per week. Week 51 marked the highest number of weekly deaths recorded to-date at 79,708. Again, given the nature of the data reporting during the last week of the year, it is too early to call the peak of the Wave 3 of the pandemic.

The mortality rate, measured as reported deaths per 1,000 cases continues to decline, but remains well above 20 deaths per 1,000 cases. The data is not, yet, reflective of the new (UK-originated) strand of the virus.

A summary table of the recent trends:

Based on monthly trends (4 weeks averages), the pandemic is showing no signs of abating in Africa, America (driven by the USA) and BRIICS, with signs of moderation off-the-peak in other parts of the world. In deaths, only Asia and Oceania are showing encouraging signs of the pandemic abating. 

Once again, even the tentative and weak signs of improvement in the pandemic dynamics mentioned above are subject to a lot of uncertainty, as the data covers the last week of 2020 and the Christmas period, both most likely contributing to underestimation of the pandemic severity.

Stay tuned for more analysis of the data.