Bad news and good news on coronavirus; plus, implications for Election Day
Bad news and good news on coronavirus; plus, implications for Election Day
No economic news today as we head into the Memorial Day weekend, but there are a few coronavirus and economic/political developments of note.
First, the bad news: the declining trend in new diagnosed cases of coronavirus in the US has stopped in the past week. Instead new cases have leveled off. Here’s a graph from Conor Kelly’s excellent tableau coronavirus dashboard page:
Cases in the US outside of NY actually increased slightly (2%) in the past week.
Now, the good news: as also shown in the above dashboard, testing has continued to increase dramatically, up 18% again in the past week.
The jury is still out on whether the slight increase in new cases in the past 4 or 5 days is because some States recklessly “reopened” without justification, or whether it is just an artifact of increased testing. There was a similar small increase in new cases right after testing started to ramp up around April 20, but it lasted less than a week. It will take about another week to know which explanation for the end of the decline in new cases is the better one.
Even better good news about testing: the US is no longer lagging compared to other major developed countries. The below graph shows the 7 day average in US testing per capita compared with those countries in Western Europe that also had major outbreaks, plus South Korea:
As you can see, South Koreas started large-scale testing immediately and was rewarded with “crushing the curve,” allowing the country to go back to nearly normal activity. The US did awful even compared with Europe until about April 20, when testing in the US ramped up significantly. In the past week, testing in the US finally surpassed all of the major countries in Western Europe except for Belgium (the worst hit on a per capita basis).
Of note, at their worst on a per capita basis both Belgium and Spain had worse outbreaks than the US does now:
This strongly suggests that, with proper staffing, much of the US could begin an aggressive tracing program to help tamp down new infections more.
In that regard, there is a new site called “Test and Trace” which is tracking exactly that. Here’s their map, as of May 20, of which US States are able to begin a successful test, trace, and isolate regimen:
My one criticism is that the site measured “planned hires” for tracers in each State, as opposed to *actual* hires.
I continue to think that it will be crucial for at least one medium sized or major State to “crush the curve” to show other States that the plan can be successful – particularly if new outbreaks begin in States that have recklessly relaxed restrictions.
Finally, on a related political/economic note, the April index of Leading Indicators was reported yesterday, and as expected it was another bad month, down -4.4%:
Since the LEI tells us where the economy is likely to be in the next 6 to 8 months, this tells us that conditions are still going to be poor on Election Day. And every econometric election model says that means the incumbent will be defeated.
Several thoughts. First, does the data on testing factor out the conflation of diagnostic testing—who has COVID-19–from antigen testing—who may have had Covid-19? I have heard that the Czech Republic, Austria and Hong Kong all crushed the curve by mandatory face masks and a compliant populace. I do not know if that is true but per your charts very few other states are prepared to do the contract tracing necessary to keep the virus at bay. Then there is Georgia which opened up way too soon—even the moron in chief was critical— but which has not seen any dramatic uptick. Of course, I have heard anecdotal suggestions that despite being “open” folks are still hunkered down. Florida is the same although perhaps they are not counting dead” snowbirds”. I certainly do not see much compliance with social distancing or mask wearing in Indiana but the numbers appear to be completely flat and have been for the last 6 weeks. I agree the economy is not coming back anytime soon especially hospitality and travel, but at this point I am beginning to wonder if the urban crisis in NYC, Detroit, New Orleans and Belgium, Italy and Spain caused an overreaction nationwide. That is going to be the moron in chief’s argument in the fall and for a change it may have some basis in fact.
Declining deaths is both good and bad.
Good, overall.
Bad, if among Trump voters. Cull the herd. MAGA.
If …
If the economy predicts the election because that is what most voters worry about, is it possible Covid-19 is big enough to displace the economy as a voter issue? (to the extent they can be separated)
If most people develop their opinions from their own experience, how will people who recover react? I fear that we will be inundated with RNC ads with recoveries saying “It was not so bad; being in shutdown was worse.”
Anne:
You pose an interesting question. We pretty much stay on our patch of land in Michigan and I will venture out early in the mornings for some essentials on a weekly basis. Although I am relatively healthy, I do not risk the exposure to others.
As NDd (post author) said “The jury is still out on whether the slight increase in new cases in the past 4 or 5 days is because some States recklessly “reopened” without justification, or whether it is just an artifact of increased testing.”
We shall find out in a week after this most recent holiday bash. Trump is gambling, Corona can be beat easily. It does not take a book of matches to start a fire with Corona. To answer your point, if Dems are successful in beating back the pandemic, Trump will say it was not that big a deal. If it explodes, he will deflect. Those that want to believe him will do so regardless of facts. We just have to vote for a Dem and not do the “anybody but” routine.
NDd
Excellent source of information due to the graphs, numeric, and scenarios.
I think the elections that are affected by the state of the economy are done.