The pattern of the increase has various aspects:
1) It seems to be now more in red states than blue states, with the trend having been toward this since the early days of the pandemic when it first started in major Dem cities in major Dem states, such as Seattle, WA, the Bay Area of CA, and the New York metro area. Of the states with the most rapid recent increase, we have only three that are predominantly Dem: CA, OR, and NV, with one purplish, NC, and the rest GOP: SC, GA, FL, AL, MS, AR, OK, TX, AZ, UT.
2) While now it is predominantly rising in GOP states where governors have not strongly encouraged social distancing or mask-wearing while rushing to fully reopen, and in some cases even banning local communities from requiring mask-wearing in public places, although some of those are now backing off that, such as Abbott in Texas, if one looks at this at the county level it remains that Dem counties are still outnumbering GOP ones, although the trend is strong toward GOP ones, and the line on this one will probably be crossed soon (these designations are based on how they voted in the presidential election in 2016). The obvious explanation for this apparent discrepancy is that in the red states cases tend to be increasing more in densely populated areas, which are more likely to be urban areas in Dem counties in those states, such as the Houston metro area in Texas.
3) There is not a clear pattern of these either being spread across states or concentrated in particular areas. Some states with increases scattered widely include the Carolinas, Florida, and Alabama. Somewhere they are more isolated/concentrated in particular locales include the two largest on this list: California and Texas.
4) Certain sectors seem to be especially hit be reclosings, notably restaurants and bars as well as some sports facilities.
5) A possible offset to all this is that certain communities are still reopening, despite this new round of new cases. An example is Washington, D.C., which just got going today with its second stage of reopening, following its suburbs in MD and VA that have already done so.
January 15, 2020
Weekly Economic Index, * 2020
The WEI is an index of real economic activity using timely and relevant high-frequency data. It represents the common component of ten different daily and weekly series covering consumer behavior, the
labor market, and production. The WEI is scaled to the four-quarter GDP growth rate; for example, if the WEI reads -2 percent and the current level of the WEI persists for an entire quarter, one would
expect, on average, GDP that quarter to be 2 percent lower than a year previously.
When you misspell your name, I have to approve it! 🙂
Analysts who have thought a V-shaped recovery most likely, at least provided the incidence of coronavirus infections was controlled, may have failed to notice the structural changes in the economy since the recession began. Spending-saving patterns have changed, work structure has changed, supply structure has changed shopping whether wholesale or retail has changed. We are a lost less secure as a people than we were.
Repeated government compensations for sectors experiencing difficulty are needed, but we do not believe in such government adjustments.
Then too, the coronavirus is rampant.
I just do not imagine a simple picking up the pieces and V-shaped recovery will occur.
June 24, 2020
IMF projects global economy to contract by 4.9 pct in 2020
The International Monetary Fund (IMF) said on Wednesday it now expects global gross domestic product to shrink 4.9 percent this year, significantly more than the three percent drop predicted in April.
The coronavirus pandemic is causing wider and deeper damage to economic activity than first thought, the IMF said on Wednesday, prompting the institution to slash its 2020 global output forecasts further.
A recovery in 2021 also will be weaker, with global growth forecast at 5.4 percent for the year compared to 5.8 percent in the April forecast. The Fund said, however, that a major new outbreak in 2021 could shrink the year’s growth to a barely perceptible 0.5 percent.
Although many economies have begun to reopen, the Fund said that the unique characteristics of lockdowns and social distancing have conspired to hit both investment and consumption.
“Thus, there is a broad-based aggregate demand shock, compounding near-term supply disruptions due to lockdowns,” the IMF said in an update * of its World Economic Outlook forecast.
China, where businesses started reopening in April and new infections have been minimal, is the only major economy now expected to show positive growth in 2020, now forecast at 1.0 percent compared to 1.2 percent in the April forecast.
Advanced economies have been particularly hard-hit, with U.S. output now expected to shrink 8.0 percent and the euro zone 10.2 percent in 2020, both more than two percentage points worse than the April forecast, the IMF said.
Latin American economies, where infections are still rising, saw some of the largest downgrades, with Brazil’s economy now expected to shrink 9.1 percent and Mexico’s 10.5 percent and Argentina’s 9.9 percent in 2020.
The IMF said that more policy actions from governments and central banks would be needed to support jobs and businesses to limit further damage and set the stage for recovery.
I sure do not see a V shaped recovery either—for all the reasons noted by Anne or Annne😊. Anecdotally I was in Wisconsin last week which has pretty much been open for 5 weeks now subject to local deviations and LaCrosse County—western Wisconsin, on the Mississippi, a college town and pretty reliably Democratic—which had like much of western Wisconsin pretty much contained COVID-19, had a bit of an outbreak tied to taverns and several had again closed down. I just do not see the hospitality industry returning to anything like “ normal” for the foreseeable future. When you add in airlines, casinos, and professional and college sports and all the people who work for them or their suppliers, we are talking about a very large drag on the economy—and I have not gotten a haircut since late February although I have been sending my barber a check each month. I never thought I would be dirty rotten hippie again.
On point 3, has there been any analysis on how this moves geographically? It seems to me that Cal and Texas have heavily concentrated urban areas (LA county, Bay Area, Dallas/ San Antonio/ Houston metros) and the South has scattered population centers, so perhaps this just tracks with the normal pop density of the states.
On a side note, combing 1 and 2 with 3 and 4 terrifies me as to how the new emergency gerrymandering will play out.
June 24, 2020
Cases ( 2,437,408)
Deaths ( 123,716)
1. I am reminded of the early 2000s recession. By 2001, some financial uncertainty began to creep in after a long expansion. Then 9/11 was a shock that cratered the economy but only briefly. It became patriotic to keep up economic activity and things perked up. Then by 2002 the underlying weakness caught back up to us and things slumped again. I expect a similar pattern here.
2. I second Terry’s observation of profound changes in consumer behavior. My wife and I both have stable jobs (for now) but we will not be going into the downtown business district for the foreseeable future. We are not alone and I don’t see the restaurants etc. that cater to the business crowd surviving or paying rent, taxes… All of our business travel is off for at least a year. At some point the dominoes will begin to fall.
You should know better.
This post followed one in which I posed that we might see at least a short-run V pattern (against my earlier predictions) based on the 1.7% surge of retail sales in May, which also coincided which followed the report that employment rose in May while nearly all official experts forecast declining output. This new one modifies that by saying we may see slower growth due to the reemergence of the pandemic in the US.
Now my earlier post was really a response to posts on Econbrowser I mentioned by Menzie Chinn, who was citing various official sources, Macroeconomic Advisers and some Fed reports, forecasting a massive decline in output for the second quarter, on the order of 37-45%. This now looks completely wacko and gonzo, and after my pointing out all kinds of evidence that the US economy appears to have been growing in both May and June, Menzie seems to have backd off a bit.
Now you point to forecasts by official sources such as the IMF forecasting negative growth for the year. That might happen, but official sources right now look totally worthless for making economic forecasts. This is a situation where the official models have completely broken down, are simply worthless. The first sign of that was the widespread massive failure to catch the turnaround on employment in May.
As it is, it is enormously hard to pin down what is going on. Not just models, but also data havw become noisy and questrionable. We should expect the unexpected, and I think it is quite possible that the reemergence of the virus in the US might not just slow down the expansion that has almost certainly been going on for some time, but to reverse it and give us a W rather than a V pattern.
No, the recession of 2001 preceded 9/11 and basically had nothing to do with it. Stock market peaked in Mach 2000, and then we had the crash of the dotcom bubble. To a large extent the succeeding recession came out of that. Nothing to do with 9/11.
You should know better.
[ I wrote no word of criticism of this post, and obviously intended none.
Paul Krugman thought this recession could be best compared to those of 1979-82, with a V-shaped recovery likely as long state and local governments were helped by Congress and as long as the incidence of new coronavirus cases could be controlled.
I did not agree with Krugman’s analysis, while now we find new coronavirus cases are increasing frighteningly. ]
Here are the recessions that Paul Krugman considered comparable. I questioned the comparison, thinking more structural damage had been done to the economy:
January 30, 2018
Real Gross Domestic Product and Real per capita Gross Domestic Product for United States, 1978-1984
Note I was not trying to suggest 9/11 was the cause of the recession. But after the initial shock of 9/11, there was an economic optimism that was unjustified. Eventually things started to sour. Looking at the dow, it varied in a band from about 10,000 – 11,000 from January 2000 to September 2001. After 9/11 it dropped to near 8,000 in a week. Then it recovered above 10,000 by December 2001. However, it dropped again to near 7,000 in 2002. I feel like the current state of the market and economy is a lot like that post 9/11 / late 2001 bubble. People think the worst is over but it is not. Just a feeling.
June 17, 2020
How Did COVID-19 and Stabilization Policies Affect Spending and Employment? A New Real-Time Economic Tracker Based on Private Sector Data
By Raj Chetty, John N. Friedman, Nathaniel Hendren, Michael Stepner and the Opportunity Insights Team
We build a publicly available platform that tracks economic activity at a granular level in real time using anonymized data from private companies. We report weekly statistics on consumer spending, business revenues, employment rates, and other key indicators disaggregated by county, industry, and income group. Using these data, we study the mechanisms through which COVID-19 affected the economy by analyzing heterogeneity in its impacts across geographic areas and income groups. We first show that high-income individuals reduced spending sharply in mid-March 2020, particularly in areas with high rates of COVID-19 infection and in sectors that require physical interaction. This reduction in spending greatly reduced the revenues of businesses that cater to high-income households in person, notably small businesses in affluent ZIP codes. These businesses laid off most of their low-income employees, leading to a surge in unemployment claims in affluent areas. Building on this diagnostic analysis, we use event study designs to estimate the causal effects of policies aimed at mitigating the adverse impacts of COVID. State-ordered reopenings of economies have little impact on local employment. Stimulus payments to low-income households increased consumer spending sharply, but had modest impacts on employment in the short run, perhaps because very little of the increased spending flowed to businesses most affected by the COVID-19 shock. Paycheck Protection Program loans have also had little impact on employment at small businesses. These results suggest that traditional macroeconomic tools – stimulating aggregate demand or providing liquidity to businesses – may have diminished capacity to restore employment when consumer spending is constrained by health concerns. During a pandemic, it may be more fruitful to mitigate economic hardship through social insurance. More broadly, this analysis illustrates how real-time economic tracking using private sector data can help rapidly identify the origins of economic crises and facilitate ongoing evaluation of policy impacts.
Excellent as always:
June 24, 2020
More Thoughts on the Recession, Stimulus, and Recovery
By Dean Baker
It is a nice summation.
June 24, 2020
Cases ( 2,462,707)
Deaths ( 124,272)
A devastating 38,500 new coronavirus cases today.
June 24, 2020
Cases ( 2,462,707)
Deaths ( 124,272)
Cases ( 306,862)
Deaths ( 43,081)
Cases ( 193,254)
Deaths ( 9,003)
Cases ( 102,242)
Deaths ( 8,484)
Cases ( 62,324)
Deaths ( 5,209)
Paul Krugman @paulkrugman
Back on May 11 I wrote about how we could really mess up the economics of the pandemic 1/
How to Create a Pandemic Depression
Opening the economy too soon could backfire, badly.
4:34 PM · Jun 24, 2020
I laid out a story about how it could all go wrong and leave us with a long period of high unemployment 2/
Over the next few weeks, many red states abandon social-distancing policies, while many individuals, taking their cues from Trump and Fox News, begin behaving irresponsibly. This leads, briefly, to some rise in employment.
But fairly soon it becomes clear that Covid-19 is spiraling out of control. People retreat back into their homes, whatever Trump and Republican governors may say.
So we’re back where we started in economic terms, and in worse shape than ever in epidemiological terms. As a result, the period of double-digit unemployment, which might have lasted only a few months, goes on and on.
It sure looks as if that’s what is happening, doesn’t it? We had employment gains in May, but states that rushed to reopen seeing a surge in infections; early indications that the public is retreating into its homes even as governors hesitate 3/
It’s looking like the nightmare scenario is coming to pass. And it wasn’t “America” that wouldn’t stay the course: the NY area has done what needed to be done. It’s Trump and his allies who refused to get real 4/
I agree that there is structural damage to the economy. It remains unclear exactly how much and what. Dean Baker’s summary, along with the Chetty et al work, is useful, even if in the end they are not completely right.
I accept that you were not out to be critical. We are all trying to figure out what the heck is going on.
I have those fine timelines leading to 2008.
June 24, 2020
Breakthrough Drug for Covid-19 May Be Risky for Mild Cases
That study about dexamethasone has arrived with a big asterisk: While it appears to help severely ill patients, it harms others.
By Roni Caryn Rabin
Scientists in Britain announced a major breakthrough in the battle against the coronavirus last week, reporting they had found the first drug to reduce deaths among critically ill Covid-19 patients.
The results were first made public in a sparsely detailed news release. Now the full study, neither peer reviewed nor published yet, has been posted online, and it holds a surprise.
The drug — a cheap, widely available steroid called dexamethasone — does seem to help patients in dire straits, the data suggest. But it also may be risky for patients with milder illness, and the timing of the treatment is critical.
The drug “may harm some patients, and we’re not entirely sure which patients those are,” said Dr. Samuel Brown, an assistant professor of pulmonary and critical care medicine at University of Utah School of Medicine in Salt Lake City, who was not involved in the research.
Following the announcement last week, officials at some American hospitals said that they would begin to treat coronavirus patients with dexamethasone, and the World Health Organization called for accelerating production to ensure an adequate supply. U.K. health officials moved to limit exports of the steroid.
The drug was tested in a clinical trial that included some 6,425 patients in Britain. One-third were randomly assigned to receive the drug, while the others received the usual care. Patients in the first group received a very low dose of the drug, given daily for up to 10 days.
Dexamethasone was beneficial for those who had been sick for more than a week, reducing deaths by one-third among patients on mechanical ventilators and by one-fifth among patients receiving supplemental oxygen by other means.
Patients given the steroid who were not receiving respiratory support, however, actually died at a slightly higher rate than similar patients who were not given the drug, although the difference was not statistically significant.
That the drug might have disparate effects at different stages of the disease makes sense, given the biology of the illness, according to Dr. Martin J. Landray, the study’s senior author and a professor of medicine and epidemiology at Oxford University.
In the most severely ill patients, the immune system flies into a harmful overdrive mode, triggering a so-called cytokine storm that damages the body, including the lungs.
“It’s almost like a disease with two phases,” Dr. Landray said in an interview. “A phase where the virus dominates, and the immunological phase, where the damage the immune system causes is dominant.”
Doctors have worried about using steroids such as dexamethasone to fight Covid-19, because steroids are anti-inflammatory drugs that dampen the body’s protective immune response. In mildly ill patients, that may do more harm than good, Dr. Landray said.
“In the early phase of the illness, the immune system is your friend,” Dr. Landray said. “It’s fighting the virus, and dampening it is not a good idea.”
“In the later phase, the immune system is no longer your friend — it’s responsible for the lungs failing, and dampening it down with steroids helps the situation and improves the chance of survival.”
Other experts agreed, saying the study showed dexamethasone cannot be used to treat mild illness, or as a preventive.
“It would likely be harmful to take dexamethasone as an outpatient treatment for Covid-19,” said Dr. Brown. Patients with mild infections “should not be trying to get people to prescribe them dexamethasone just in case.”
Many scientists want to see the trial results repeated in another study, and note that some questions aren’t fully answered in the paper, including information about long-term outcomes and neurological damage….
“Dexamethasone was beneficial for those who had been sick for more than a week, reducing deaths by one-third among patients on mechanical ventilators and by one-fifth among patients receiving supplemental oxygen by other means.” is overly optimistic. It is 1 in 25 for those oxygen and 1 in 8 on ventilators.
The results were first made public in a sparsely detailed news release. Now the full study, neither peer reviewed nor published yet, has been posted online, and it holds a surprise….
[ The online reference has not been given as yet by the New York Times. I will post the online reference when made available. ]
June 22, 2020
Effect of Dexamethasone in Hospitalized Patients with COVID-19: Preliminary Report
By Peter Horby, Wei Shen Lim, Jonathan Emberson, Marion Mafham, Jennifer Bell, Louise Linsell, Natalie Staplin, Christopher Brightling, Andrew Ustianowski, Einas Elmahi, Benjamin Prudon, Christopher Green, Timothy Felton, David Chadwick, Kanchan Rege, Christopher Fegan, Lucy C Chappell, Saul N Faust, Thomas Jaki, Katie Jeffery, Alan Montgomery, Kathryn Rowan, Edmund Juszczak, J Kenneth Baillie, Richard Haynes, Martin J Landray and RECOVERY Collaborative Group
Background: Coronavirus disease 2019 (COVID-19) is associated with diffuse lung damage. Corticosteroids may modulate immune-mediated lung injury and reducing progression to respiratory failure and death. Methods: The Randomised Evaluation of COVID-19 therapy (RECOVERY) trial is a randomized, controlled, open-label, adaptive, platform trial comparing a range of possible treatments with usual care in patients hospitalized with COVID-19. We report the preliminary results for the comparison of dexamethasone 6 mg given once daily for up to ten days vs. usual care alone. The primary outcome was 28-day mortality. Results: 2104 patients randomly allocated to receive dexamethasone were compared with 4321 patients concurrently allocated to usual care. Overall, 454 (21.6%) patients allocated dexamethasone and 1065 (24.6%) patients allocated usual care died within 28 days (age-adjusted rate ratio [RR] 0.83; 95% confidence interval [CI] 0.74 to 0.92; P<0.001). The proportional and absolute mortality rate reductions varied significantly depending on level of respiratory support at randomization (test for trend p<0.001): Dexamethasone reduced deaths by one-third in patients receiving invasive mechanical ventilation (29.0% vs. 40.7%, RR 0.65 [95% CI 0.51 to 0.82]; p<0.001), by one-fifth in patients receiving oxygen without invasive mechanical ventilation (21.5% vs. 25.0%, RR 0.80 [95% CI 0.70 to 0.92]; p=0.002), but did not reduce mortality in patients not receiving respiratory support at randomization (17.0% vs. 13.2%, RR 1.22 [95% CI 0.93 to 1.61]; p=0.14). Conclusions: In patients hospitalized with COVID-19, dexamethasone reduced 28-day mortality among those receiving invasive mechanical ventilation or oxygen at randomization, but not among patients not receiving respiratory support.