The Fed’s Industrial Production report provides another grim look at the Covid-19 wrecked economy.
Total industrial production fell 11.2 percent in April for its largest monthly drop in the 101-year history of the index, as the COVID-19 (coronavirus disease 2019) pandemic led many factories to slow or suspend operations throughout the month.
Manufacturing output dropped 13.7 percent, its largest decline on record, as all major industries posted decreases. The output of motor vehicles and parts fell more than 70 percent; production elsewhere in manufacturing dropped 10.3 percent.
The indexes for utilities and mining decreased 0.9 percent and 6.1 percent, respectively. At 92.6 percent of its 2012 average, the level of total industrial production was 15.0 percent lower in April than it was a year earlier.
Capacity utilization for the industrial sector decreased 8.3 percentage points to 64.9 percent in April, a rate that is 14.9 percentage points below its long-run (1972–2019) average and 1.8 percentage points below its all-time (since 1967) low set in 2009.
No V-Shaped Recovery
As noted earlier today Retail Sales Plunge Way More Than Expected
Despite talk from hopers, even the fed understands there will not be a V-Shaped recovery.
Instead they are promoting a helicopter drop of money. For details, please see Panic Sets In: Fed Promotes More Free Money
Mish
I gather from your list of stats that you feel that almost certainly causing a Depression was the appropriate response to this pandemic?
LOL! You have mastered many of the argumentation fallacies haven’t you!
“almost certainly causing a Depression” WAS NOT the response! And still IS NOT the response!
Whether “recession” or depression” of whatever “shape”, the economic impact will be a CONSEQUENCE of the response. And if the response had been truly “appropriate” we might very well have avoided the CONSEQUENCE of the response … or at least lessened the impact, ameliorated the CONSEQUENCE.
Short answer:
Whatever the severity of the economic impact (there was always going to be some, that was unavoidable) will not be a consequence of the appropriate response because the appropriate response of initial draconian lockdown occurred way too late and with no real preparedness with strategy or supplies. The severity of the economic impact will be due to being driven by political gamesmanship and profit motive above all else.
Long answer:
Initial response to an unknown virus, that was killing far more people than China ever admitted, had to be immediate/swift and draconian. Especially when China’s own delays of pretense and cover-up allowed millions to depart from Wuhan for other parts of China and the rest of the world.
Countries prepared with strategy and supplies and ready to move swiftly against the medical/health emergency above all else, including “slamming the doors” / going into immediate “lockdown” as soon as the first inklings of trouble leaked from China, reaped the benefit.
One of the reasons we are where we are is that initial response was neither swift nor draconian. In too many other places, US included, political gamesmanship trumped all other considerations and let the virus spread for far too long. It has not been the primary focus among TPTB in the US to address the medical/health issues swiftly and with top priority from the beginning.
There was far too much pretense of “contained in China” and other “wishing and hoping” strategies.
There was far too little preparedness, with both strategy and supplies.
There was far too much concern for the implications for the upcoming campaign and election. Political gamesmanship, including “The economic impact will hurt ME (Trump)” superseded all other considerations.
There were the foul-ups and delays with testing and producing and supplying sufficient PPE, etc.
There was abject refusal to study the use of HCQ cocktails as early as symptoms appear… whether because “Trump suggested it, so NO!” or “We can’t make money from HCQ!” from Big Pharma. There has been little or no official discussion of the role or possible effectiveness of vitamin supplements. I became even more convinced of these aspects when I saw Remdesivir fast-tracked while other very inexpensive possibilities were continually pooh-poohed.
Now that much more (still much to learn) is known, there has been a failure to move away from the one-size-fits-all lockdowns and start tailoring responses to geographical areas and business sectors as quickly as possible to ameliorate the economic impacts of what I still believe had to be the initial response to the virus.
In summary, we were not prepared (inexcusable) … we did not respond quickly enough to the real medical/health situation initially but played political games for far too long … by that time the draconian lockdown measures that should have been implemented far earlier were even more necessary … but even then, every response was tainted by political self-interest and “Never let a crisis go to waste” and “How can we profit greatly from this situation?” games.
From that standpoint, the virus was a lose-lose situation. Locking things down surely hurt the economy. Not locking them down would lead to alternate consequences that would also have been dire. Unfortunately we will only be able to compare them in retrospect, by comparing the GDP growth in 2021-22 of the various countries, to see which recovered the most strongly. How will Brazil compare, where they elected to ignore it? How will Australia and S. Korea compare, where they attempted to crush it? How will the US compare, where they took the middle ground, and attempted to flatten the curve, but allowed it keep spreading at a slow rate?
RE: “From that standpoint, the virus was a lose-lose situation.”
Did anyone expect otherwise from the pandemic spread of a new virus with unknown characteristics?
No win for people or the economy overall … maybe a few “winners” in the economy who happen to be in the right business at the right time, or those sociopaths who consider the loss of a lot of elderly people a “win” for various reasons (most reasons seem to amount to some sort of ghoulish CBA)
But all the points I mentioned turned from a lose-lose-situation into a LOSE!-LOSE! situation …
RE: “Locking things down surely hurt the economy. Not locking them down would lead to alternate consequences that would also have been dire.”
Based on some examples around the world, locking down as quickly as possible and taking all the sensible steps to CONTAIN might have resulted in lose-lose.
Instead, the US and many other nations played around with waiting and pretending and arguing and fighting and playing all sorts of political/ PR games so that locking down could only be used to try to MITIGATE … and with no preparedness, strategy, supplies, TIME they only had a one-size-fits-all approach to use >>>>> LOSE!-LOSE!
Yes, I can see that your chart places Rhinovirus at R0 = 6 … Although it now looks like your post disappeared, as did my initial post with the R0 values … maybe violated some link/site mention rule?
It also specifies particular “points” / average values for each disease which is somewhat disingenuous since R0 values are always estimates and should be represented by RANGES. But we can go with an average …
The bigger problem is it has no data point for SARS-COV-2 WHICH IS NOT SARS which is understandable since that chart was apparently produced by someone writing the article in 2014.
And BTW, my original R0 range for COVID-19 was taken from the CDC site where an article states it was calculated from early data to be ~5.7.
You might want to check out this CDC article … https : // wwwnc . cdc . gov /eid/article/25/1/17-1901_article
The current number I see is Ro=2.5. But, who knows. My only point is that with common sense precautions, the risk of contraction is small. Hell, I don’t want to get it since I’m older. But I am hardly panicked about it.
The big issue is, what will happen with an economic collapse. Then there will be food riots and chaos. At that point Maslow’s hierarchy of needs will kick in and deaths from Corona will take a backseat.
RE: “My only point is that with common sense precautions, the risk of contraction is small.”
If you have a job where you can work from home or travel in your own car and practicing common sense while in the office with plenty of open space (hand-washing, social distancing etc.) and all the activities you engage in allow the same sort of common sense precautions, I would tend to agree with you since I have a job that affords me those “luxuries” and I try to use as much common sense as possible when out in public.
My (not only) point is that many many people do not have jobs like that, so without lockdowns they would have been in situations not quite as bad as meat-packing plants or nursing homes, but almost as bad … Do you realize how many “cubicle farm” jobs and packed public transportation would have still been open with no way of practicing those common sense precautions.
RE: “The big issue is, what will happen with an economic collapse.”
Remains to be seen how that all plays out … but I happen to believe that if it comes it will only have been accelerated by the virus and response … to think that everything was just fine and dandy otherwise is sticking your head in the sand.
RE: “Then there will be food riots and chaos.”
Sounds like the same kind of panic prognostications you complain were made about the virus … might come true … might not …
Besides, one of the more interesting articles Mish posted recently showed how the vast majority of businesses and people around the country were already entering their own form of “lockdown” even before any government officials were taking the threat seriously enough to start making “lockdowns” official.
I guess we can start playing “battling sources” …
From a well known source article on R0
Values of R0 of well-known infectious diseases
Disease Transmission R0
Measles Aerosol 12–18
Chickenpox (varicella) Aerosol 10–12
Mumps Respiratory droplets 10–12
Polio Fecal–oral route 5–7
Rubella Respiratory droplets 5–7
Pertussis Respiratory droplets 5.5
COVID-19 Respiratory droplets 3.8–8.9 (a wider range than my original 5-6)
Smallpox Respiratory droplets 3.5–6
HIV/AIDS Body fluids 2–5
SARS Respiratory droplets 3.1–4.2
Common cold Respiratory droplets 2–3
Diphtheria Saliva 1.7–4.3
Influenza (1918 pandemic strain) Respiratory droplets 1.4–2.8
Ebola (2014 Ebola outbreak) Body fluids 1.5–1.9
Influenza (2009 pandemic strain) Respiratory droplets 1.4–1.6
Influenza (seasonal strains) Respiratory droplets 0.9–2.1
MERS Respiratory droplets 0.3–0.8
And I can assure you that I need no schooling in Math … but your understandably feeble attempt at pretending you could actually “school” me is somewhat appreciated.
Unfortunately the response to this virus has become politicized. The Dims see it as a way to unseat Trump. Trump is reacting the same way he did to the Russiagate farce: trying to beat the Dims at their own stupidity.
Did I mention, gee this lady’s hair smells terrific!
I sure am glad Trump hasn’t politicized this at all. When he piles on the absurd charges like no PPE because of Obama 3 years after Obama left office….you can’t call that “politicizing” I suppose.
Stan, Were did I say it was one sided? More like tit-for-tat.
Are we still to believe it’s Covid’s faulty and not the government’s reaction to Covid? I haven’t missed a day of work since this all began. With a few common sense precautions, like: watch what you touch and keep a distance from your coworkers, the chances of catching it are slim. How many cold seasons have you went through without catching a cold. Yet the common cold is more contagious than Covid.
Hmmmm BrainDamaged…..the common cold is more contagious than Covid? Where did you get that? And what’s the fatality rate for the common cold?
Common cold has an Ro =6. Covid around 2 or 3. I’m not saying the level of illness is the same. I’m just saying, the risk of contraction, if you’re careful, is not what the hysterical would have you believe.
Common sense precautions don’t work when you have to take a seriously overcrowded train or subway to work.
RE: “Yet the common cold is more contagious than Covid.”
Wrong …There is a major difference between the common cold with has virtually no asymptomatic infectiousness and a day or 2 of pre-symptomatic infectiousness at most and COVID-19 which can have up to a week of pre-symptomatic infectiousness and at least as long of asymptomatic infectiousness.
With nothing but what you call “common sense precautions” COVID-19 is estimated to have an R0 of more 2-3 TIMES that of the common cold.
And virtually nobody ends up in the hospital with high risk of infecting health care workers with the common cold.
(Not even talking about the widely differing end results of infection …)
Are you really Joe Biden? Suspicions of that were increased by your post …
Mathgame, No, you’re wrong. You are comparing it with the flu. All your other commentary is irrelevant.
Here let me school you in some math.
Ro = 2.5 < Ro =6. Voila! I have a proof Covid less contagious than common cold!
A freeze on rent / debt repayment for everyone would be better than printing more money because everyone is effected more equally.
“effected more equally”????? as a rental housing provider….I wouldn’t see that as being more equal. What would be more equal would be if the government pays for anything it wants to give away. What about letting everyone go in the grocery store and take what they want without paying for it. Would that effect “everyone’ “more equally” too?
Anything is better than printing money. Or at least anything other than nuking the population is. Between those two, it’s more of a tossup.
There’s no need for a “debt/rent freeze.”
Just stop enforcing evictions in the middle of a “stay at home” pandemic. The rest will sort itself out. Including tenants putting money aside for maintenance, as you can’t really expect landlords, unable to collect a dime, paying for that.
Then, get rid of all and every zoning and land use law ever enacted, such that all those newly unemployed guys can get busy building enough space, to ensure that once all those non payers, businesses as well as families/individuals, can finally be safely evicted, they have somewhere to move to.
Distancing guidelines are a lot easier to follow, on a construction site than in a retail, as well as hospitality, environment. And the sheer enormity of the housing and commercial space shortage in much of the country (millions upon millions of residential AND commercial units in San Francisco alone), virtually guarantees enough value will be created by a construction boom, to make employing lots and lots of the newly unemployed, affordable.
A “debt freeze” or rent cancellation would be an unconstitional confiscation of property. They can’t just rob from landlords and lenders. Now, if the government wanted to pay the rent, for everyone, and pay the interest on loans for everyone, that would work, but then you are back to printing money.
We have not been able to develop a vaccine for a single coronavirus. So the probability of a vaccine being developed for Covid-19 in the next year or two is small. Isn’t herd immunity our only option?
Without A Vaccine, Herd Immunity Won’t Save Us https://fivethirtyeight.com/features/without-a-vaccine-herd-immunity-wont-save-us/
Numike, predictions base on a simple models are no substitute for reality or experience.
Herd immunity is where hope lies. Thus, shelter in place and lock downs may just be postponing the inevitable while destroying what remain of our crony capitalist economy.
Oh where is your faith…they will develop a vaccine. As for efficacy and safety…that’s an entirely different matter that hasn’t hindered vaccine development for several decades now.
I’ll wait a couple years before getting it, if it happens. One of he major problems that they had with the SARS vaccine was over-sensitization of the immune system that killed the host on infection with SARS. Also, there may be problems with auto-immune disorders or who knows what. I’m happy to get it after some time has elapsed without problems worse than the disease itself.
Maybe they can bundle it with the SARS vaccine and a couple others…the 4 or 5 in one shot we like to give our babies…
They did develop a vacccine for SARS. It was safe and effective in Phase I and Phase II trials. They did not conduct the expensive Phase III trials because SARS was no longer a problem.
And our resident stable genius says “if we didn’t do any testing we would have very few cases”. We have zero hope of the US successfully managing this COVID outbreak with a leader who is sadly and woefully out of touch with reality.
That worked well for Tajikistan, until it didn’t. They finally relented and began testing in May.
I remember when Biden said Trump was xenophobic and racist for restricting travel from China. It was open borders that allowed the virus to enter the U.S. Democrats were opposed to closing them.
RonJ–Hmmm, again with the smelly old cheese…
….For starters, health experts say Trump was wrong to refer to the travel restrictions as a “travel ban,” as he did in a telephone interview on March 4 with Fox News’ Sean Hannity. During a town hall on March 5, Trump said he “closed down the borders to China and to other areas that are very badly affected.” That’s not accurate.
As Azar explained when he announced the travel restrictions on Jan. 31, the policy prohibits non-U.S. citizens, other than the immediate family of U.S. citizens and permanent residents, who have traveled to China within the last two weeks from entering the U.S.
At a House subcommittee hearing on the coronavirus on Feb. 5, Ron Klain, White House Ebola response coordinator under the Obama administration, took issue with the characterization of the travel restrictions as a travel “ban.”
“We don’t have a travel ban,” Klain said. “We have a travel Band-Aid right now. First, before it was imposed, 300,000 people came here from China in the previous month. So, the horse is out of the barn.”
“There’s no restriction on Americans going back and forth,” Klain said. “There are warnings. People should abide by those warnings. But today, 30 planes will land in Los Angeles that either originated in Beijing or came here on one-stops, 30 in San Francisco, 25 in New York City. Okay? So, unless we think that the color of the passport someone carries is a meaningful public health restriction, we have not placed a meaningful public health restriction.”
He’s far from out of touch…simply following the script. If you don’t like the yin you can tune into the yang (Fauci)…also on script.
Tired of them…tune into Biden’s rambling…
I’m still in some state of unbelievable stupor that we’ve descended to such depths…surely there are better more credible actors out there we can access to read the teleprompter…
I know we haven’t had a decent honorable president for over a 100 years…but surely surely we can do better than our current options…
“..surely there are better more credible actors out there we can access to read the teleprompter…”
There aren’t.
The only way to sustain an undifferentiated idiotopia, which is the only foundation upon which a progressive state can ever be built, is to systematically disempower anyone with a brain, until they are no longer in any position to pose a threat to their inferiors.
And while the US has managed to fail, spectacularly, at absolutely everything else over the past 50 years, creating and sustaining just such an idiotopia, is the one thing it has succeeded at, beyond all expectation.
The ONE country in the world with the capability of supporting freedom and disrupting the old families power and control over the world. Hence the greatest propaganda effort in the history of the world…and all out effort to obtain control over…which as you state appears to be quite successful.
Americans, in my travels and interactions, are largely ignorant of the powers in the world. Europeans (again from my perspective…however skewed) get it…but don’t have the oomph or cajoles to do anything about it having lived out their lives over numerous generations under such influences and control.
There have been some sirens (alarm tense – not female) and outcry over the years…whistleblowers who attempted to get the word out…many of whom have paid the ultimate price for their efforts. The power struggle in the beginning. The moneyed efforts to split the country in two during the Civil War…as well as attempts to bury the country in debt. The shenanigans, assassinations, and depressions (control of money) that rippled into the 2nd World War when power was truly consolidated. A quick example being the Wall Street plot led by Prescott Bush (true traitor to freedom)…who’s son and grandson went on to be US Presidents. The Politician’s (Eisenhower) rise to glory from colonel to 4 star general in couple of years during war while never commanding a combat unit into battle (glorified secretarial and back office career). The money wars – Korea, Vietnam, etc. The battle between the Bush/Walker family (which includes CIA) and the Kennedy family…winner should be obvious. And all the actors down to our current “you’re fired” fruitcake.
40 years of unanimous bipartisan support for China (including “Dr. No” Ron Paul) even shortly after the Tiananmen Square massacre in 89. Given billions of dollars, unilateral support, a pegged currency, and near complete open technology transfer…China has been built into the powerhouse that it currently is. The US has slowly been gutted, immoralized, and turned into a shadow of it’s former self. China has been staged as the model child (blended mix of communism and capitalism) while the manifesto has manifested itself in the US.
Think its by accident? Or subscribe to the laissez faire version of history? Or the conspiratorial version or Unseen Hand as Epperson called it?
Will we go down in the night crying in our spoiled hormone injected cooked milk?
162 benefits of coronavirus https://www.lesswrong.com/posts/5u5Het5Lkcb2nSWJp/162-benefits-of-coronavirus
See the Bank of America reporting. The consumer is not to be counted out apparently. Helicopter money works…
Helicopter money works briefly and causes huge problems later…
FIFY
Haha. Ofcourse.
“Instead they are promoting a helicopter drop of money.”
…
The House plan provides $$s to extend the $600 a WEEK in added federal benefits to states’ thru January 2021 (currently set to expire July 31st). Some on UE will be getting in excess of $40K to sit at home. Good luck to any business who employs low wage workers to get them back to work. Bravo.
Chop chop chop chop
It’s coming.
tis but a flesh wound
How could these results possibly have not been expected with people under orders to not travel, not go to work, stay home.
They were. Market is flat in response to them.
Industrially produced fraud and corruption is at an all-time high.
More like, government produced fraud and corruption.