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Thursday, March 28, 2024

The Global Economy Is Rolling Over As Lockdowns Return

Courtesy of ZeroHedge View original post here.

New Covid-19 cases continue surging in the US, with daily new infections rising to a record 150,530 yesterday. The 7-day average in new cases reached 130,000, up from a trough of 34,000 in mid-September, with the week-on-week growth doubling from 20% at the start of last week to 40% now. Virus cases are increasing in 94% of US jurisdictions, with the death rate in non-metro areas currently more than double that in urban areas. Ominously, the number of Covid-19 patients in US hospitals, at 67,100, has already surpassed the peak levels registered in April. Daily new Covid-19 related hospital admissions, at 2,930, and daily reported deaths, at 1,050, have both reached three-month highs.

At the same time, European daily case counts continue to ease in response to much tighter restrictions. At 138,180, the 7-day average of new cases in the five major European countries (Germany, France, the UK, Italy and Spain) has faded for a fifth consecutive day, leaving it 6% below its Saturday high following a relentless rise from a trough of 2,000 in July. As of yesterday, Covid-related deaths have reached 189.9k in these countries. Globally, the 7- day average of new cases stood at over 567.3k, a 6% increase from a week ago. Meanwhile, the 7-day average of Covid-related fatalities across the globe was 8.5k yesterday

And as a growing number of state and local governments resume tightening restrictions to combat surging infections and in some cases restarting full-blown lockdowns, with Chicago’s mayor yesterday urging residents to stay home as much as possible, while New York’s mayor is said to consider closing the city’s schools again, the question is if and when will the broader economy be hit.

Below we present a handful of real-time indicators showing just how and where the global economy is being hit the hardest amid the second major round of economic lockdowns:

We start with mobility trackers, which show that mobility has plummeted across European nations with renewed partial lockdowns:

After holding stable for months, JPMorgan's credit and debit card spending tracker has rolled over, led by a drop in "present" transactions as remote/online continue at a stable pace.

Next, looking at Industrial activity, we can see that while September Industrial Production edged up in Japan and Brazil, but crept down in the Euro Area as the continent locked down.

Most ominously, over the past two weeks, consumer activity measures declined throughout Europe and to a lesser extent in North America (although expect this to reverse as US lockdowns accelerate). Restaurant bookings collapsed in Ireland and Germany amid restrictions and edged down throughout the rest of Europe and North America. Mobility at retail and recreation as well as at transit stations declined globally driven by European lockdowns. In contrast, mobility measures rose in Asia and the Pacific.

While retail sales in the US remain strong, there has been a notable decline in new business applications with the IRS in the past three months after the initial surge in business closures/reopenings. Additionally, the late summer burst in travel has clearly rolled over, as has hotel occupancy data while mortgage applications are also at the lowest Y/Y level since the crisis.

Separately, the latest European restrictions have pushed Google global GDP-weighted retail and recreation activities down to -21% and transit visits to -31%.

Lockdowns also adversely impacted offices, with global GDP-weighted workplace visits edging down to -23% yoy

Needless to say, travel was hit hard: European flight traffic has continued to edge down, while US flight measures picked up, but these will likely reverse soon.

At the same time, AirBnB searches declined across Europe and in the US.

One final "scarring" effect from the lingering covid pandemic: the share of temporary job losers fell in October in the US, as more become "permanent."

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