Category Archives: COVID2019

4/2/21: U.S. Labor Markets: America’s Scariest Charts, Part 4

 The first three posts on the state of the U.S. labor markets have covered:

  1. Continued Unemployment Claims (https://trueeconomics.blogspot.com/2021/02/4221-us-labor-markets-americas-scariest.html);
  2. Labor force participation rate and Employment-to-Population ratio (https://trueeconomics.blogspot.com/2021/02/4221-us-labor-markets-americas-scariest_4.html); and
  3. Non-farms payrolls (https://trueeconomics.blogspot.com/2021/02/4221-us-labor-markets-americas-scariest_16.html)
In this post, let's take a look at new unemployment claims data through the week of January 30, 2021:


The data confirms the worrying trends cited in reference to continued unemployment claims. In the last week of January 2021, based on preliminary estimates published today, initial unemployment claims stood at 816,247 - a decline of just 23,525 on prior week reading. The 4-weeks cumulative initial unemployment claims are at 3,744,581, which only 103.433 down on prior 4 weeks period. Net, over the last 5 weeks, the reduction in initial unemployment claims stands at a miserly 19,725. 

Despite little media coverage, the U.S. labor markets remain stricken by the pandemic effects on economic activity. If we strip out data for the pandemic period-to-date, the latest weekly reading for initial unemployment claim ranks as the 10th highest in the history of the series. 



4/2/21: U.S. Labor Markets: America’s Scariest Charts, Part 3

 In two prior posts, I covered two of America's Scariest Charts:

  1. Continued Unemployment Claims (https://trueeconomics.blogspot.com/2021/02/4221-us-labor-markets-americas-scariest.html) and 
  2. Labor force participation rate and Employment-to-Population ratio (https://trueeconomics.blogspot.com/2021/02/4221-us-labor-markets-americas-scariest_4.html)
Here, let's take a look at non-farm payrolls that measure employment levels in the economy.


In December 202, employment growth stalled. In fact, non-farm payrolls fell 328,000 in the last month of 2020 to 143,777,000, or 9,400,000 below pre-pandemic peak. December was the first month of declines in employment since April 2020, but employment growth was relatively slow already in November when the U.S. economy added 603,000 jobs, the slowest pace of recovery after July for the entire period of recovery of May-November 2020.

This evidence further reinforces the argument that labor markets conditions in the U.S. remain abysmal, prompting American workers to slip out of the labor force. 

4/2/21: U.S. Labor Markets: America’s Scariest Charts, Part 2

In the previous post, I covered the first set of data - Continued Unemployment Claims (https://trueeconomics.blogspot.com/2021/02/4221-us-labor-markets-americas-scariest.html) - that highlights the plight of American economy in the current crisis. Now, let's take a look at Labor Force Participation rate and Employment to Population ratio:



The chart and the table above highlight continued serious problems in the structure of the U.S. labor markets. While official continued unemployment claims are inching back toward some sort of a 'norm', much of so-called improvement in unemployment dynamics is actually accounted for by the dire state of labor force participation which is still trending below anything one might consider reasonable. Current labor force participation rate is 61.5 which is well below anything seen before the onset of the pandemic in March 2020. By a mile below. And in terms of historical perspectives, we have no modern recession (from 1980 onwards) that matches these lows of labor force participation. Structurally, this means that instead of gaining jobs, the unemployed simply roll off the cliff of unemployment assistance and drop out of the labor force, discouraged by the lack of meaningful decent jobs in the market. 

Employment to population ratio is a little better, but it is still stuck below pre-pandemic levels and is low compared to prior recessions' troughs. 

The conditions in the U.S. labor markets might be improving somewhat off the pandemic lows, but the situation overall remains dire. 


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.

4/12/20: COVID19 Update: U.S. vs EU27

EU27 vs U.S. comparatives for COVID19 pandemic to-date:

  • The U.S. retains higher death rate per 1 million population (844.6), than the EU27 (624.4). 
  • Current U.S. death rate per capita is 35% above the EU27, though this gap is still closing (it was 42% a week ago).
  • Gross counts of deaths in the U.S. >> the EU27 over 12/07 - 1/12.  This was reversed on 2/12, with total EU27 deaths currently at 278,914 vs the U.S. 276,316. 
  • Adjusting deaths to account for a 1 week lag in the onset of pandemic in the U.S., relative to the EU27, current U.S. deaths are 21,435 above those in the EU27
  • Adjusted for population and pandemic timing differences, the U.S. deaths are 77,048 above those in the EU27.
  • While the EU27 led the U.S. in new deaths and case counts through 20/11, since then, the U.S. has retaken the lead in new cases counts. 
  • Daily deaths counts in the U.S. are now expected to start exceeding those in the EU27 once again.

Starting with 20/11/2020, the U.S. once again overtaken the EU27 in the number of daily reported cases, based on 7-days moving average:


The data above is yet to reflect massive potential contagion event of Thanksgiving travel in the U.S. and the related movements of students from and back to the colleges and universities that allowed in-person teaching in the Fall 2020 semester.

Shorter lags between contagion and diagnosis of COVID19 cases imply longer lags between new cases arrivals and hospitalisations, which in turn further elongates the lags between new cases detection and associated deaths counts. This is clearly evident from comparing the following figure dynamics with prior figure dynamics:

Put differently, current better performance by the U.S. compared to the EU27 in the second wave of the pandemic in terms of daily deaths counts is unlikely to remain for much longer. EU27 daily deaths trend appears to have peaked about a week ago, while the U.S. deaths trend remains upward-running. 

Little comfort for the wicked... right? 


As the chart above shows, even with more favourable deaths dynamics during the current wave of the pandemic, the U.S. deaths per capita remain horrifically above those in the EU27. Worse, over the last four days, we are seeing some tentative signs that the EU27 daily deaths counts might be moderating. Meanwhile, the opposite is taking place in the U.S.