Coronavirus economic update March 22

Latest unemployment numbers: For the 29 states I have data, there is a total of 1,822,979 new unemployment claims over the past week. However, of the 29 states, some states only report claims for a few days. If I assume the average claims of the non-reported days are the same, this comes out to 2,800,000 claims for the week for the 29 states. This is about 2.5% of the total civilian labor force in these states. Applying this number to the non-reporting states, this gives a total of 4,146,920 new unemployment claims for the week.

Coronavirus economic update, March 19

The unemployment numbers are out for last week (i.e., the week ending March 14), and they are up to 281,000, up 33% from the previous week. The Washington Post has the writeup.

Note that the numbers I’ve been tracking are for this this week (i.e., the week ending March 21), and will be released next Thursday morning. The biggest number to come out recently is the one for California, 200,000 in 3 days. The chart below compares the number just for the past 3 days with the average weekly claims during the Great Recession.

Markets are calmer today, with coronavirus health news bad but central banks introducing several new policies. The ECB has a new $1 trillion bond buying program, and the Fed is now extending swap lines to many countries.

Coronavirus storyline #12: monetary policy

March 18

Although the Federal Reserve has cut interest rates to zero, in most market borrowing is becoming more difficult as liquidity dries up and interest rates rise.

Mortgage rates have increased about 30 basis points in the last week.

Due to low liquidity, yields on 10-year treasuries have also spiked in the past week, doubling to 1.1% even as risk has increased.

As liquidity has dried up, banks are raising interest rates on lending. “With short-term yields surging, U.S. Bank more than doubled the interest rate on $124 million of variable-rate bonds issued by Methodist Le Bonheur Healthcare to 5% — threatening to add almost $4 million a year to its annual debt payments.”

Interest rates on student loans are likely to decrease.

March 18, Coronavirus economic update

March 18 Updates

NEW — state unemployment claims numbers. Updating as this come in. If you have more sources please send along.

WSJ: Stocks down 5%, not surprising. What is a little surprising is yields on government bonds are rising — 10 year treasury now above 1%. Still insanely low, but shows that there are intense liquidity needs.

Oil is down to $27 a barrel. Prices at the pump have still only dropped about 25 cents, but nobody is driving anyway.

FT: The rise in bond yields is people liquidating that need cash.

WSJ: Tracking store closings.

Coronavirus storyline #11: tourism, entertainment, sports

March 17

The effect on the tourism industry seems to be cataclysmic.

FT: Mariott puts tens of thousands of employees on unpaid leave.

WSJ: “The U.S. Travel Association projected Tuesday that total spending on travel in the U.S., including transportation, lodging, retail, attractions and restaurants, would plunge by $355 billion for the year—and that 4.6 million American jobs would be lost.”

“Hotel owners in most every major urban market in the U.S. are now experiencing occupancy levels around 20% or less, a rate that will make it challenging to meet payroll, let alone pay other expenses and meet debt obligations, owners said.”

“American Airlines Group Inc., the world’s biggest carrier, will fly to only two long-haul destinations—Tokyo and London. Executives at British Airways, Korean Air and other large airlines have said they are in a battle for survival. Many smaller carriers, which form the bedrock of the 13,000 new jets ordered from Airbus SE and Boeing Co., have less access to new capital, and aren’t expected to survive.”

The coronavirus outbreak

Thinking out loud about the likely path forward of the outbreak, including discussion of disease progression.

At this point, the main points of uncertainty are:

  1. The mortality rate
  2. The reproducibility rate, R0, both in the absence of intervention, and especially given a particular intervention.
  3. The percentage of cases that are asymptomatic, and whether or not asymptomatic cases are infectious
  4. The percentage of cases that are transmitted before symptoms onset.
  5. The time between infection and symptom onset.

A running diary of academic studies and discussion of the above is included below:

  1. WHO Mission to China Report.
    1. R0 of 2 to 2.5, in the absence of interventions.
    2. Transmission is mostly within families. “In China, human-to-human transmission of the COVID-19 virus is largely occurring in families.”
    3. At least this report doesn’t seem to think that asymptomatic infection is important. “Asymptomatic infection has been reported, but the majority of the relatively rare cases who are asymptomatic on the date of identification/report went on to develop disease. The proportion of truly asymptomatic infections is unclear but appears to be relatively rare and does not appear to be a major driver of transmission.”
    1. Incubation period of 5-6 days
    2. Based on available information, the median time from symptom onset to laboratory confirmation nationally decreased from 12 days (range 8-18 days) in early January to 3 days (1-7) by early February 2020, and in Wuhan from 15 days (10-21) to 5 days (3-9), respectively.
    3. “China has a policy of meticulous case and contact identification for COVID-19. For example, in Wuhan more than 1800 teams of epidemiologists, with a minimum of 5 people/team, are tracing tens of thousands of contacts a day. Contact follow up is painstaking, with a high percentage of identified close contacts completing medical observation. Between 1% and 5% of contacts were subsequently laboratory confirmed cases of COVID-19, depending on location.”
  2. The Lancet, “Feasibility of controlling COVID-19 outbreaks by isolation of cases and contacts”
    1. With a given reproducibility rate (R0), whether or not an outbreak can be prevented depends upon if contacts can be traced and isolated.
    2. Another important factor is the percentage of cases that are transmitted before symptoms onset. This paper assumes 15%.
    3. Finally, the percentage of cases that are asymptomatic (subclinical) is important. The paper assumes there are 10% subclinical cases.
    4. With an R0 of 1.5, outbreaks can be contained as long as 50% of contacts can be traced.
    5. With an R0 of 2.5, outbreaks can be contained as long as 70% of contacts can be traced.

3. Experiment in Town of Vo — everyone was tested, twice. First time around, 50% of cases were asymptomatic!

4. Estimating the infection and case fatality ratio for COVID-19
using age-adjusted data from the outbreak on the Diamond
Princess cruise ship
. On the cruise ship, half of all cases were asymptotic.

5. Center for Mathematical Modeling of Infectious Disease. A number of interesting estimates:

  1. Percentages of pre-symptomatic transmission.

6. Mortality rate of Corona Virus — mortality rates of 1.5% ?

7. In the US, 40% of Coronavirus hospitalizations are for young people. Elderly still the majority of mortalities.

8. What is the secret to South Korea’s success? 74 cases March 18th down from 909 at the peak. Done so without taking authoritarian measures. Tested more than 270,000 people. This, along with contact tracing, and case isolation.

Still early, because a lot of their cases were within one church group.

Earlier experience with Mers showed laboratory testing is the key.

Korean Center for Disease control developed tests, cooperated with diagnostic manufacturers to develop commercial test kits.

Close contacts and those with minimal symptoms whose family members are free of chronic diseases and who can measure their own temperatures are ordered to self-quarantine for 2 weeks. A local monitoring team calls twice daily to make sure the quarantined stay put and to ask about symptoms. Quarantine violators face up to 3 million won ($2500) fines. If a recent bill becomes law, the fine will go up to 10 million won and as much as a year in jail.

Still, the numbers of new cases have dropped the past 2 weeks, aided by voluntary social distancing, both in the Daegu-Gyeongbuk region and nationwide. The government advised people to wear masks, wash their hands, avoid crowds and meetings, work remotely, and to join online religious services instead of going to churches.

The government hopes to control new clusters in the same way it confronted the one in Shincheonji. The national testing capacity has reached a staggering 15,000 tests per day. There are 43 drive-through testing stations nationwide.

9. Hopelessly ineffective CDC, FDA responsible for scale of pandemic. These broken organizations will be impediments during the current crisis.

Coronavirus storyline #10: unemployment

March 24

Latest numbers below. For a number of states we are starting to get the full picture. Total of 2,265,108 claims from 37 states. Best estimate for total claims for all 50 states is 3.8 million.

StateTotal New Claims Source
Alabama9,000 Source
Alaska4,046 Source
Arizona 29,000 Source
Arkansas10000 Source
California742,000 Source
Colorado28,000 Source
Connecticut72,000 Source
Delaware10,000 Source
DC7,000 Source
Georgia27000 Source
Hawaii4,500 Source
Illinois64,000 Source
Indiana54,000 Source
Kansas11,355 Source
Kentucky17,230 Source
Louisiana47,000 Source
Maine4,900 Source
Maryland5000 Source
Massachusetts19,884  
Michigan108,710 Source
Minnesota95,000 Source
Montana4,820 Source
New Hampshire34000 Source
New Jersey 15,000 Source
New Mexico10,879 Source
North Carolina 113,002 Source
Ohio140,000 Source
Oklahoma5,986 Source
Oregon18,000 Source
Pennsylvania353,664 Source
Rhode Island43,000 Source
South Carolina10000 Source
Tennessee6,092  
Texas61,500 Source
Virginia14,540 Source
West Virginia4000 Source
Wisconsin70,000 Source

March 23rd

Latest numbers below. For a number of states we are starting to get the full picture. Total of 2,087,000 claims from 37 states. Best estimate for total claims 3.8 million.

StateTotal New Claims Source
Alabama9,000 Source
Alaska4,046 Source
Arizona 29,000 Source
Arkansas10000 Source
California564,000 Source
Colorado28,000 Source
Connecticut72,000 Source
Delaware10,000 Source
DC7,000 Source
Georgia27000 Source
Hawaii4,500 Source
Illinois64,000 Source
Indiana54,000 Source
Kansas11,355 Source
Kentucky17,230 Source
Louisiana47,000 Source
Maine4,900 Source
Maryland5000 Source
Massachusetts19,884  
Michigan108,710 Source
Minnesota95,000 Source
Montana4,820 Source
New Hampshire34000 Source
New Jersey 15,000 Source
New Mexico10,879 Source
North Carolina 113,002 Source
Ohio140,000 Source
Oklahoma5,986 Source
Oregon18,000 Source
Pennsylvania353,664 Source
Rhode Island43,000 Source
South Carolina10000 Source
Tennessee6,092  
Texas61,500 Source
Virginia14,540 Source
West Virginia4000 Source
Wisconsin70,000 Source

March 22nd

Updated data below. For the 29 states I have data, there is a total of 1,822,979 new unemployment claims over the past week. However, of the 29 states, some states only report claims for a few days. If I assume the average claims of the non-reported days are the same, this comes out to 2,800,000 claims for the week for the 29 states. This is about 2.5% of the total civilian labor force in these states. Applying this number to the non-reporting states, this gives a total of 4,146,920 new unemployment claims for the week.

This calculation assumes that (i) for states that have reported, non-reporting days are similar to reporting days, and (ii) states that have not reported are similar to states that have reported.

StateTotal New Claims Source
Alaska4,046 Source
California564,000 Source
Colorado28,000 Source
Connecticut72,000 Source
DC7,000 Source
Hawaii4,500 Source
Illinois 64,000 Source
Indiana22,583 Source
Kansas11,355 Source
Kentucky17,230 Source
Louisiana47,000 Source
Maine4,900 Source
Maryland5000 Source
Massachusetts19,884  
Michigan55,000  Source
Minnesota 95,000 Source
Montana4,820 Source
New Jersey 15,000 Source
New Mexico10,879 Source
North Carolina83,000 Source
Ohio140,000 Source
Oklahoma5,986 Source
Oregon18,000 Source
Pennsylvania353,664 Source
Rhode Island43,000 Source
Tennessee6,092  
Texas61,500 Source
Virginia14,540 Source
Wisconsin45,000 Source

March 19

Latest figures. The total from 21 states (sum doesn’t include NY and TX which are listed below) is 883,047, but keep in mind many states have only reported a few days of claims.

  1. Colorado 3,900 on Monday, 6,800 Tuesday as of 10:00 am. Compare with 400 last Monday.
  2. Rhode Island (2nd source) 6,282 on Monday, and 17,779 in the last 8 days. Now, 30,000 in the last 9 days. Compare with 10 last week
  3. Ohio 12,000 on Sunday, 36,645 Monday, 21335 Tuesday, 33,238 Wednesday . Compare with 562 last Sunday.
  4. Connecticut (2nd source) (3rd source) Friday 2000, Sat & Sun 8000, Mon 10,000, Tuesday 10,000 , Wednesday 12,000. Now 56,000 for the week.
  5. Hawaii 1500 on Monday, 3000 on Tuesday, compared to 300 last Monday.
  6. Mass Monday, 19,884 filed, compare with 17,382 entire month of February.
  7. Tennessee 6,092 since March 8, compare to 2,031 previous week
  8. Minnesota (2nd source) 31,000 on Monday and Tuesday, more than 10 times total from last week. 50,000 on Wednesday
  9. New Jersey 15,000 on Monday.
  10. Michigan 5,400 on Monday, compared to 1,300 normal
  11. Kentucky (2nd source) 9,000 on Tuesday, compared with normal 2,000 / week. Sunday through Tuesday, 17,230
  12. Pennsylvania (2nd source) 50,000 on Monday, more than 50,000 on Tuesday, compare to 14,000 first week of March. Now, total is 121,000 online applications. Now 180,000 Tuesday, Wednesday, Thusrday. 
  13. Texas 16,000 last week, compared with 4,500 the previous week
  14. Maryland 5,000 on Monday, a five-fold increase.
  15. Louisiana (2nd source) (3rd source) 3,600 on Monday and Tuesday, compared to 1,698 for week ending March 7. New source says 11,000 on Tuesday. New source 30,000 since Sunday.
  16. Maine 4,900 Sunday, Monday and Tuesday, more than March of 2019
  17. New York Office receive 21,000 calls by noon Tuesday, compare with 2,000 calls total last week
  18. Illinois 41,000 on Tuesday and Wednesday, compared with 4,500 same two days 2019
  19. North Carolina 4,700 Monday and Tuesday, compared to normal 3,500 per week
  20. Oregon 18000 on Tuesday March 17, compare to 800 Sunday March 15
  21. California Sunday, 40,000, Monday 70,000, Tuesday 80,000, compare to normal 2,000 daily
  22. DC 7600 since Monday
  23. South Carolina Increase of 400 percent
  24. Oklahoma 846 Monday, 1,994 Tuesday, 3,146 Wednesday

March 18

Updated state unemployment numbers. If you have more please send a comment or email.

  1. Colorado 3,900 on Monday, 6,800 Tuesday as of 10:00 am. Compare with 400 last Monday.
  2. Rhode Island 6,282 on Monday, and 17,779 in the last 8 days. Compare with 10 last week
  3. Ohio 12,000 on Sunday, 36,645 Monday. Compare with 562 last Sunday.
  4. Connecticut 30,000 since Friday, compared with a typical 3,000 per week.
  5. Hawaii 1500 on Monday, compared to 300 last Monday.
  6. Mass Monday, 19,884 filed, compare with 17,382 entire month of February.
  7. Tennessee 6,092 since March 8, compare to 2,031 previous week
  8. Minnesota 31,000 on Monday and Tuesday, more than 10 times total from last week. Now 50,000 for the week.
  9. New Jersey 15,000 on Monday.
  10. Michigan 5,400 on Monday, compared to 1,300 normal
  11. Kentucky 9,000 on Tuesday, compared with normal 2,000 / week
  12. Pennsylvania 50,000 on Monday, more than 50,000 on Tuesday, compare to 14,000 first week of March. Now 120,000 for the week.
  13. Texas 16,000 last week, compared with 4,500 the previous week
  14. Maryland 5,000 on Monday, a five-fold increase.
  15. Louisiana — 3,600 on Monday and Tuesday, compared to 1,698 for week ending March 7.
  16. Maine 4,900 Sunday, Monday and Tuesday, more than March of 2019
  17. New York Office receive 21,000 calls by noon Tuesday, compare with 2,000 calls total last week
  18. Illinois 41,000 on Tuesday and Wednesday, compared with 4,500 same two days 2019
  19. North Carolina 4,700 Monday and Tuesday, compared to normal 3,500 per week
  20. Oregon 18000 on Tuesday March 17, compare to 800 Sunday March 15
  21. California Sunday, 40,000, Monday 70,000, Tuesday 80,000, compare to normal 2,000 daily

WSJ: Layoffs are beginning

March 17: Numbers are starting to trickle in and they don’t look good.

Slate: Unemployment filers are overwhelming state systems.

WSJ: State unemployment sees surge in claims.

US Survey: 18% have hours or job cut due to coronavirus.

A round up of state by state unemployment rates.

  1. Colorado 3,900 on Monday, 6,800 Tuesday as of 10:00 am. Compare with 400 last Monday.
  2. Rhode Island 6,282 on Monday, and 10,000 in less than a week. Compare with 10 last week
  3. Ohio 12,000 on Sunday, 36,645 Monday. Compare with 562 last Sunday.
  4. Connecticut 30,000 since Friday, compared with a typical 3,000 per week.
  5. Hawaii 1500 on Monday, compared to 300 last Monday.
  6. Mass Monday, 19,884 filed, compare with 17,382 entire month of February.
  7. Tennessee 6,092 since March 8, compare to 2,031 previous week
  8. Minnesota 31,000 on Monday and Tuesday, more than 10 times total from last week
  9. New Jersey 15,000 on Monday.
  10. Michigan 5,400 on Monday, compared to 1,300 normal
  11. Kentucky 9,000 on Tuesday, compared with normal 2,000 / week
  12. Pennsylvania 50,000 on Monday, more than 50,000 on Tuesday, compare to 14,000 first week of March
  13. Texas 16,000 last week, compared with 4,500 the previous week
  14. Maryland 5,000 on Monday, a five-fold increase.

Reuters: Norway unemployment jumps from 2.3% to 5.3%

Coronavirus storyline #9: manufacturing

March 17: The data is sparse of course at this point. One data point is the New York Manufacturing survey, where an overall index of activity fell by 34 points, the largest fall ever and similar to level seen during the Great Recession.

In Europe many factories are shutting down, either because of the virus or because of supply chain disruptions. France’s PSA (Peugeut, Opel, etc) is closing all European plants. Michelin is shutting factories in France, Italy, and Spain for a minimum of one week. Volkswagen is set to shut its main plant within days because of supply chain issues.

WSJ: Manufacturing continues to hum along. Companies are staggering shifts.

FT: UAW calls for two week halt in US production.

Coronavirus storyline #8: government support for companies and industries

March 17: On the table in the United States $50 billion for airlines. Many industries are coming to the table asking for handouts.

  1. Casino industry
  2. Cruise ships and hotels could be on the table as well.
  3. Tourism industry asks for $150 billion.

There can and should be resistance to the government just handing out cash to the corporations. See this nice Op-Ed by Tim Wu. For years airlines have abused their market power to saddle consumers with absurdly awful service, high feeds, and low quality, while making record profits. Instead of saving the profits for a rainy day, they have saddled the companies with debt, and used most of their cash flow for dividends and buybacks.

In France, a number of packages are being considered: €32 billion in deferred tax and social security, €8.5 billion for two month payments to workers temporarily laid off, €300 billion for bank loans for businesses.