Category Archives: recession

Dividends by the Numbers in July 2021

If dividend paying stocks are any indication, the U.S. stock market continued to experience respectable growth in July 2021. The following chart shows the market's dividend increases and decreases from January 2004 through July 2021:

Number of Public U.S. Firms Increasing or Decreasing their Dividends Each Month, January 2004 through July 2021

The dividend metadata for July 2021 is where the market's continued strength really shows its hand:

  • Standard and Poor counted 5,085 U.S. firms declaring dividends in July 2021, an increase of 2,362 over the total recorded in June 2021 and the third highest monthly total in a data series that extends back to January 2004. That figure is also an increase of 1,862 over the 3,223 recorded in July 2020.
  • Some 54 U.S. firms announced they would pay a special (or extra) dividend to their shareholders in July 2021, a decline of 5 from the 59 recorded in June 2021, but an increase of 29 over the 25 recorded in July 2020.
  • 156 U.S. firms announced dividend rises in July 2021, an increase of 75 over the number recorded in June 2021, and an increase of 86 over the 70 recorded in July 2020.
  • 12 publicly traded companies cut their dividends in July 2021, an increase of 6 over the number recorded in June 2021, but a decrease of 15 from the 27 recorded in July 2020.
  • Zero U.S. firms omitted paying their dividends in July 2021, a decline of one from June 2021's total of one. Year over year, that figure is also a decrease of 11 from the number recorded in July 2020.

Since our June 2020 report, the National Bureau of Economic Research has declared the Coronavirus Recession that began after the U.S. economy peaked in February 2020 hit bottom and ended in April 2020.

That determination provides an opportunity to see how simply counting the number of U.S. firms either cutting or suspending their dividend payments to their shareholding owners works as a near real-time economic indicator. The next chart shows the combined total of dividend cuts and omissions in each month from January 2004 through July 2021.

Number of Public U.S. Firms Cutting or Omitting Their Dividends Each Month, January 2004 through July 2021

What we find is that aside from tax law change-driven anomalies that affects the timing of when shareholders might collect dividends, this combined figure is a good indicator to identify periods when recessionary conditions are present in the U.S. economy. As with the so-called "Great Recession" of 2008, the count of dividend cuts and omissions rising above a key threshold works well in picking up when recessionary conditions are negatively impacting the economy.

However, this indicator slightly lags the official end of recessions by up to several months in the time it takes to drop below the key thresholds, which is consistent with dividend cuts and omissions being a somewhat lagging indicator.

That's because there are two types of dividend payers. The first type includes firms who pay variable dividends, often as a percentage of their earnings, which are quick to respond to both deteriorating and improving economic conditions. Firms in this category account for the real time indication of the onset of recessionary conditions. We consider firms in this category to be proverbial canaries in the coal mine with respect to detecting the onset of recessionary conditions in the economy.

The second type includes firms who set their dividend payments independently of their earnings. Because these firms follow this practice, which requires the intervention of their boards of directors, they tend to be slow to respond to the deterioration in their business outlooks when recessionary conditions arrive. Consequently, their actions to either cut or suspend their dividends as their changing business situation dictates is delayed. That lagging effect also applies after recessionary conditions come to an end, with elevated numbers of firms still acting to cut their dividends for up to several months after economic conditions have begun improving.

Together, the two types of dividend paying firms makes the count of dividend cuts and omissions a solid near real-time indicator of the relative health of the U.S. economy, with the advantage of not requiring the additional months it often takes for the NBER to get around to making its official determinations.

The indicator is also good at picking up what might be called microrecessions, which we define as the presence of recessionary conditions that lack the scale, scope or severity to constitute a full-blown national recession as might be determined by the NBER. 2016's oil industry recession falls into that latter category, which could be easily seen in the number of firms within that industry cutting their dividends that year.

All in all, the monthly count of dividend cuts and omissions in the U.S. stock market may be the simplest economic indicator available to investors to quickly assess the relative health of the U.S. economy.


Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. Accessed 2 August 2021.

Estimated Net Global GDP Lost to Coronavirus Pandemic Exceeds $15.6 Trillion

The triple dip global recession from the coronavirus pandemic continued tracking downward through the end of the second quarter of 2021.

We can see that result in the rate at which carbon dioxide is being added to the Earth's atmosphere. Here, we find the trailing year average of that rate continued to fall through June 2021, as the coronavirus pandemic's negative impact on economic activity continued to take a deep toll.

Trailing Twelve Month Average of Year-Over-Year Change in Parts per Million of Atmospheric Carbon Dioxide, January 1960 - June 2021

Since we're at a quarter end, we'll estimate the net reduction in global GDP that has resulted since December 2019 as a consequence of the pandemic and the actions of governments to cope with it. The net reduction of 0.47 parts per million of atmospheric carbon dioxide has been entered as the default value for this data in the following tool. If you're accessing this article on a site that republishes our RSS news feed, please click through to our site to access a working version of the tool.

Change in Atmospheric Carbon Dioxide
Input DataValues
Change in Carbon Dioxide in Atmosphere [Parts per Million]
World Population [billions]

Change in Amount of Carbon Dioxide Emitted into Atmosphere
Calculated ResultsValues
Carbon Dioxide Emissions [billions of Metric Tonnes]
Estimated Net Change in World GDP [trillions]

Using these default values, we estimate the net loss to global GDP some 18 months after the first stirrings of the coronavirus pandemic began impacting national economies exceeds $15.6 trillion.

From the end of March 2021 through June 2021, the coronavirus pandemic affected the large economies of India, China, and Japan, significant parts of Europe, and several nations in South America. Diminished economic activity correspondes with reduced rates of carbon dioxide being added to the Earth's air.

With other regions in the global economy experiencing strong recoveries, the negative impact being experienced in the regions coping with the pandemic has to be large enough to offset the increasing carbon dioxide emissions coinciding with their increased economic output.


National Oceanographic and Atmospheric Administration. Earth System Research Laboratory. Mauna Loa Observatory CO2 Data. [Text File]. Updated 6 July 2021. Accessed 6 July 2021.

Previously on Political Calculations

Here is our series quantifying the negative impact of the coronavirus pandemic on the Earth's economy, presented in reverse chronological order.

U.S.-China Trade Recovery Slows to Near Stall in May 2021

According to trade data published by the U.S. Census Bureau, the year-over-year growth rate of trade between the U.S. and China slowed dramatically in May 2021.

Year Over Year Growth Rate of U.S.-China Trade, January 1986 - May 2021

A large portion of that year-over-year decline was expected, because it follows the trade recovery that began after the volume of trade between the two countries bottomed in March 2020 as the first wave of the coronavirus pandemic ended. However, the just-released data on imports and exports between the two countries fell significantly below projections for May 2021. Consequently, the gap between the trailing year average of the volume of trade between the U.S. and China and a "no coronavirus pandemic" counterfactual barely changed from the previous month:

Combined Value of U.S. Exports to China and Imports from China, January 2008 - May 2021

The size of that monthly gap peaked at $10.6 billion in October 2020 and had fallen to $7.5 billion through April 2021 as the trade recovery gained steam. May 2021's gap however was $7.4 billion, changing little from the previous month as the growth in the volume of trade stalled.

The following analysis discusses several of the major factors that contributed to May 2021's figures:

China's trade growth showed slower exports but faster imports. What's behind this divergence?

Exports in May 2021 grew 27.9%YoY, which is slower than the consensus expectation of 32% growth.

The main reason for the shortfall is that all export items related to semiconductor chips have slowed.

Auto processing products and parts, the biggest export item, fell 4%YoY in terms of export value. This is most likely the result of the semiconductor chip shortage.

The analysis also points to a new wave of coronavirus infections in China, which also negatively impacted trade logistics:

Since the end of May, there have been around 10 Covid cases daily in Guangdong, where most electronics factories are located.

Shipments from the port in Shenzhen that process most of the electronic throughput have been affected by Covid. Port workers now have to have Covid tests and port operations have been disrupted.

Some factories in Guangdong were also affected by Covid, mostly caused by workers queuing up for testing.

These factors are expected to continue negatively impact the data for June 2021, which will be published early next month.


Board of Governors of the Federal Reserve System. China / U.S. Foreign Exchange Rate. G.5 Foreign Exchange Rates. Accessed 5 July 2021.

U.S. Census Bureau. Trade in Goods with China. Accessed 5 July 2021.

Coronavirus Pandemic Sends Global Economy Into Triple Dip Recession

When we last covered the state of the global economy, we found it had just begun rebounding after having entered a double-dip recession. Deeply impacted regions like North America and the Eurozone were showing signs of recovery, boosted by the arrival of COVID vaccines.

Two months ago, that recovery could be measured by the increasing rate at which carbon dioxide was being added to the Earth's atmosphere. Two months later we find that sign of improvement has reversed, indicating the global economy is experiencing a triple dip recession.

Trailing Twelve Month Average of Year-Over-Year Change in Parts per Million of Atmospheric Carbon Dioxide, January 1960 - May 2021

What happened to reverse the global economic recovery?

From the end of March 2021 through May 2021, the coronavirus pandemic reared its ugly head in India and several nations in South America, including Brazil, Argentina, and Colombia.

Daily Confirmed New Cases (7-Day Moving Average) - Outbreak evlotuion for the current most affected countries, 1 January 2020 - 18 June 2021

Of these countries, India suffered the most extreme spread of SARS-CoV-2 coronavirus infections in the period from March through May 2021, the severity of which hammered its economy. And by extension, the global economy because India has become the fifth largest national economy in the world.

Data for the changing concentration of carbon dioxide in the Earth's atmosphere indicates that negative impact on India's economy was very large. It more than fully offset the rate at which CO2 is being added to the Earth's air resulting by the other regions of the world whose economic recoveries are well underway.


Johns Hopkins Coronavirus Resource Center. Daily Confirmed New Cases (7-Day Moving Average) Outbreak Evolution for the Current Most Affected Countries. [Online Database]. Accessed 19 June 2021.

National Oceanographic and Atmospheric Administration. Earth System Research Laboratory. Mauna Loa Observatory CO2 Data. [Text File]. Updated 6 April 2020. Accessed 19 June 2021.

Previously on Political Calculations

Here is our series quantifying the negative impact of the coronavirus pandemic on the Earth's economy, presented in reverse chronological order.

Teens, Young Adults on Different Pandemic Job Recovery Tracks

U.S. teens are leading the coronavirus pandemic recession job recovery. But why?

Conor Sen runs through a number of contributing factors that have led to this remarkable outcome:

What makes teenage employment useful to study right now is that teenagers are less affected by the factors holding back labor supply than any other demographic. If they lived at home with their parents, they weren’t eligible for economic impact payments. If they were full-time students, they’d be ineligible for unemployment insurance, making enhanced benefits a nonfactor. They’re unlikely to be parents squeezed out of the labor force by closed schools or a lack of child care. They’re obviously not older workers who may have accelerated retirement plans during the pandemic. And teens were less likely to get seriously ill from Covid-19, and so perhaps less likely to avoid working for health-related reasons.

Barry Ritholtz offers a competing theory:

In 2007, before the great financial crisis, the national minimum wage level was a paltry $5.15. This was not all that long ago. For a teenager with even the most modest withholding / FICA, their take-home is so small it’s not worth it to work. You can see that in the trends over the preceding decades. By most measures — productivity, profitability, inflation, exec comp — the minimum wage has lagged badly. Teens did the math, and said WTF, why bother?

But the minimum wage began to rise during the financial crisis despite skyrocketing unemployment. It was raised in 2008, and then in 2009, and again in 2010. Post GFC, it’s been $7.25 an hour.

Not coincidentally, at exactly that time, the labor participation rate of teenagers began trending upwards. Today, it’s even higher than it was before the pandemic began. Maybe it’s boredom, perhaps some teens just want out of the house where they’ve been stuck with mom and dad and their siblings during the past year.

Or just maybe, local employers are raising wages sufficiently to make summer jobs attractive to teens.

That is an interesting hypothesis and one we can easily investigate. Starting with the Bureau of Labor Statistics' 2020 report on the characteristics of minimum wage workers, which reports that 1,112,000 Americans earned the federal minimum wage or less in 2020. Of these, 222,000 were teens from Ages 16 through 19. Teens therefore accounted for nearly one in five minimum wage workers, the second largest group by age in the U.S.

The largest age group for minimum wage workers is young adults, Age 20 through 24. In 2020, they accounted for 307,000 minimum wage workers, or nearly 28% of the total. Together, teens and young adults represent just under 48% of all those earning the U.S. federal minimum wage or less.

If the hypothesis that local employers offering higher-than-federal minimum wage is what is drawing teens into the U.S. labor force holds, it stands to reason that young adults would be likewise motivated to enter or re-enter the job market for the exact same reason, since they make up a larger share of minimum wage workers. That would be especially true during the last several months when employers have responded to a shortage of labor by boosting wages.

The following chart reveals what happened during that time for both teens (Age 16-19) and young adults (Age 20-24). For good measure, we're showing the data from January 2007 through May 2021 to capture Barry's period of interest, which confirms the data for both groups generally follow the same patterns, but we'll be focusing on more recent months in our analysis.

Percentage of U.S. Population Employed, Age 16-19 and Age 20-24, January 2007 - May 2021

The employment-to-population ratio of teens and young adults peaked in February 2020, just ahead of the arrival of the coronavirus recession in the United States. The percentage of employed for both groups plunged before bottoming in April 2020, after which both saw a steady recovery through October 2020. The onset of the second wave of coronavirus infections through the end of 2020 saw that recovery stall, with overall employment-to-population ratios holding relatively steady during this period.

The data for both groups begins to diverge after January 2020, with the employed share of young adults holding steady while the employed share of teens has risen. Since this period coincides with increased demand for labor and rising wages, the absence of an increase in the share of young adults becoming employed in this period means we can reject the hypothesis that teens only sought jobs when entry level wages rose higher than the federal minimum wage.

As for what has led to this situation, we're afraid that employment data is subject to an abundance of confounding factors, which makes determining which factors are significant difficult to untangle. We think Conor Sen's analysis pointing to teens' ineligiblity for pandemic unemployment benefits deserves greater consideration, especially since teens and young adults aren't very different from one another with respect to the other factors he mentions.

We would also suggest investigating to what extent employers desperate to fill jobs may have lowered their standards for new hires. If we're talking about standards that favored previous experience, training, or education in hiring, then we may have a good candidate for explaining why teens and not young adults are leading the job recovery in 2021.


U.S. Bureau of Labor Statistics. Labor Force Statistics from the Current Population Survey. Employed persons and employment-population ratios by age. [Online Database]. Accessed 14 June 2021.