The "Lost April" and Economic Cheerleading


The Cass Freight Index report discusses the Lost April. But what's next?

Is May the Shipping Bottom? 

The Cass Freight Report suggests April is the bottom while blaming what has happened as a self-inflicted wound.

The Cass Freight Index showed the expected big dip in activity last month, after all the March consumer panic buying subsided, leaving us with just the negative impact of shut-in orders and rising unemployment levels. For April, the overall index for both shipments and expenditures fell sharply y/y to recessionary levels. This is concerning but would be more concerning if it weren’t a self-inflicted wound. Businesses and mobility were severely limited by unprecedented governmental restrictions in April, and those are loosening here in May and should further loosen on their way back to “normal” in June. 

Cass April Shipping Level 

Cass April Shipping Level 2020-05

Cass Freight Index

Cass Freight Index 2020-05

There are many addition charts and the report is well worth a look, but here is another snip that caught my eye.

Shipment volumes dropped 22.7% vs April 2019 levels, and we believe this will mark the bottom. May should be better, as the U.S. economy slowly begins to re-open and some manufacturing plants turn back on (many automotive OEMs are targeting plant re-openings in the next week or two). 


Covid was not self-imposed. 

US Covid-19 Deaths 

Covid-19 Deaths 2020-05-13

March, April, May

  • March 13, 2020: 40
  • April 13, 2020: 22,108
  • May 13, 2020: 82,387

The above data points are from Our World.

In precisely two months, the number of US Covid-19 deaths went from 40 to 22,108 to 82,387.

And those deaths are way underestimated by any rational measure although numerous poorly-written articles and theories claim otherwise.

Cass Freight Index Showed Economic Weakness Way Before the Pandemic

I commented on that aspect last month in Cass Freight Index Showed Economic Weakness Way Before the Pandemic

Ever since Cass outsourced production of this report to Stifel, the Cass report been one of rampant overoptimism.

The original writers (named Cass) were sounding recession signals whereas Stifel writer David G. Ross, spoke of signs of a freight bottom for the last few months.

We can never prove which view is correct, but seeing signs of a bottom in a recovery that was already the longest in history seems more than a bit questionable.

Not Self-Inflicted

This was not self-inflicted although we do not know and never will how many deaths would have occurred had the US done nothing.

Key Rebuttal Points

  • Even had the US done nothing, with the rest of the world shut down and supply chains totally wrecked, precisely how was US manufacturing supposed to stay intact?
  • With deaths soaring to 82,387 from 40, it is irrational to presume bar and restaurant traffic would have done anything other than collapse.

Bottom In?

Perhaps Ross is correct. But that is not the issue. 

The speed and shape of the recovery are the issues.

Fed's Three-Point Assessment

Fed Chair Jerome Powell gave this assessment today: 

  1. "The path ahead is both highly uncertain and subject to significant downside risks."
  2. "The loss of thousands of small- and medium-sized businesses across the country would destroy the life's work and family legacy of many business and community leaders and limit the strength of the recovery when it comes."
  3. "The result could be an extended period of low productivity growth and stagnant incomes."

Negative Rates Not an Option

For discussion of those points and also the Fed's assessment of negative interest rates, please see Negative Rates Are Not an Option

Realistically, we should now toss ideas of a bottom in April (as the Cass report suggested last month) or even May, as the latter is essentially irrelevant.

Unfortunately, the Covid-19 Recession Will Be Deeper Than the Great Financial Crisis.

Don't expect a V-shaped recovery. 

That thought applies to restaurants, manufacturing and shipping as a direct consequence.


Comments (39)
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Slightly off topic but I'm going to throw in a link for europe personal savings, and after that a chart on Spanish serology tests. Often you talk how little anyone has saved in the US, the below link looks at europe. 12 % of europe cannot afford food if earned income is taken away for two months. Take away pensions and public transfers and a quarter of europe does not have cash or deposits to last two months


92 percent of Cook County COVID-19 victims had pre-existing conditions

A Wirepoints analysis of COVID-19 deaths from the Cook County Medical Examiner’s office reveals that 92 percent of victims from the virus had pre-existing medical conditions.*

The medical examiner’s database showed COVID-19 as the primary cause of death for 2,303 people. Of those, 2,112 were shown to have at least one underlying condition as a secondary cause of death. Those conditions, also known as comorbidities, included hypertension, diabetes, obesity and heart disease. There were no secondary causes reported for 191 deaths.

This finding is important because Gov. J.B. Pritzker has refused to release any statewide comorbidity data as part of his official Illinois Department of Health releases. Wirepoints asked for data directly from the governor’s office on April 21st, but we were told it was not available. We’ve since released a piece asking Gov. J.B. Pritzker why that’s so: Who’s most at risk for COVID-19 and why isn’t Illinois publishing that data?

Understanding who is most at risk – and who is not – is central to a public understanding of the virus. It’s also central to helping decide when and how to open up our economy and schools. What Cook County’s and other comorbidity data across the country implies is that the risk of death for healthy Illinoisans is far lower than Gov. J.B. Pritzker might lead people to believe based on his protracted lockdown and drawn out reopening plan.

Cook County reports that of the 2,303 victims where COVID-19 was listed as the primary cause of death, 92 percent had one or more comorbidities.

973 victims, or 42 percent of the total. Pulmonary disease was part of 397 deaths, or 17 percent. And 215 of those deaths, about 9 percent, were accompanied by obesity or morbid obesity.

Yet others had conditions including cancer and cardiovascular and kidney diseases. The numbers above add up to more than 100 percent because many victims had more than one pre-existing condition.

The Cook County data lines up with city of Chicago data on comorbidities for city deaths. Though the city does not provide any broader detail, it does report that 1,090 of Chicago’s 1,160 COVID-19 deaths had underlying conditions. That’s 94 percent.

What’s stark about the Cook comorbidity data is just how few young adults die from COVID-19 in the absence of some pre-existing condition. Just 3 of the 15 deaths in the 20-29 age bracket had no comorbidities. Same goes for the 30-39 and 40-49 age brackets, where just 26 of the 132 deaths were accompanied with no underlying causes.

The above data is key to mapping out a reopening strategy for schools, universities and workplaces. Younger, healthier adults face far less risk from COVID-19 than originally feared.

On the flip side, it shows who is at risk: anyone with pre-existing conditions, including the elderly. As of May 8, the average age of all COVID-19 deaths in Illinois was 74, a clear sign of where the true risk lies.

Even more, almost 50 percent of all Illinois deaths have been tied to long-term care facilities, the subject of an upcoming Wirepoints piece. That means nearly 1,600 deaths occurred outside the general public.

For months, Illinois residents have lived in fear, a fear that has been exacerbated by a lack of transparency and open reporting from the state. The state didn’t release hospitalization data until outside pressure forced it to. Antibody testing results are still being held back, which we wrote about in With New FDA Action, Gov. Pritzker and Dr. Ezike Have No Excuse for Further Stonewalling Antibody Testing.

And Wirepoints shouldn’t be forced to seek out and compile partial comorbidity data based on tips from others. The state should be open and transparent with all of its COVID-19 statistics.

Regardless, the data continues to be revealed, even with the state’s stonewalling. The information we now know paints a compelling case for a far different reopening plan than Gov. Pritzker has introduced.

*Hat tip to CWB Chicago for making us aware of the examiner’s online database. The link to the examiner’s office is here.

Click here for the full list of Cook County COVID-19 victims

Tony Bennett
Tony Bennett

Cluelessness reigns:

"snowstorm". Seriously?

cnbc in March

Ben Bernanke, the former Federal Reserve chairman who served before and after the 2008 financial crisis, told CNBC on Wednesday the coronavirus economic halt is more like a “major snowstorm” than an economic depression.

“This is a very different animal than the Great Depression,” Bernanke stressed. “The Great Depression, for one thing, lasted for 12 years, and it came from human problems: monetary and financial shocks that hit the system.”

“This has some of the same feel of panic, some of the feel of volatility,” he said in a “Squawk Box” interview. “It’s really much closer to a major snowstorm or a natural disaster than it is to a classic 1930s-style depression.”

Bernanke said he does expect a “very sharp” U.S. recession, but also a “fairly quick” recovery.


I live in an area that was not hard hit by the coronavirus (four cases in the entire county). Our state still had mandatory quarantine, but with many caveats (I could still go fishing, etc.), but all the restaurants, bars, and other dine-in spots closed. The area where I live is dependent on tourism and rich, upper-middle-class retirees to buy or build their dream house here. Lots of low-wage jobs inherent in such a model. Restaurants open next week; I am hopeful for a local V-shaped recovery, just to get people back to work. But the bigger picture, nationally and regionally? Yikes. Sad.

Louis Winthorpe III
Louis Winthorpe III

"With deaths soaring to 82,387 from 40, it is irrational to presume bar and restaurant traffic would have done anything other than collapse."

Thank you, Mish. This is what people who complain about the lockdowns miss. Even if there were no government mandated lockdowns, fear would set in after the death rate exploded. Fear would keep people home anyway, so you would still get an economic hit after taking an even higher mortality hit.

The government didn't mandate that people panic buy and horde a 5 year supply of toilet paper. Fear did that.

The lockdowns and distancing were effective, now people are getting complacent and saying they were never needed. If we're not careful we're going to get ourselves right back on the exponential growth curve.


Mish, are you saying the response that we took to shut down most businesses was the best and optimal strategy? Why don't we do this for the flu? Are there no other strategies that would have worked as well (or even better) without doing as much damage to the economy?

Seems to me, there is a lack of imagination here. But then, this is to be expected from government.


Mish, you nailed it perfectly. Your assessment is spot on. We have difficult times going forward, and the people need a clear understanding of just what is happening and why. Thank you for your good work.


Everyone talking about the "shape" of the recovery is assuming there will be a recovery. Seems likely the US economy after the pandemic will be fundamentally different -- flattened -- compared to before. How can there be a genuinely productive system of finance and commerce with endless NIRP and $50+ (just wait) trillions of gov debt?


"3. he result could be an extended period of low productivity growth and stagnant incomes."

Oh, so more of the same then. Seriously, doesn't that describe the past 10 years for non-asset holding Americans?


"The speed and shape of the recovery are the issues."

A news report this morning from some analyst said that 40% of the job losses were "permanent."


good article Mish.

In western nova scotia we have had 54 cases for the last 3 weeks no new cases in three weeks. the province as a whole has had some additional cases mostly in nursing homes they have been in the single digits. When I Rarely go to town about 1/2 the people wear masks no one gets close people are social distancing ins stores. . I think Mc Neil has had a consistent message from the start. “Stay the Blazes Home” . New Brunswick has not had a new case in a long while. So many people barking about freedom but in reality your freedom ends at the tip of my nose and the virus means at least 6 feet away. If everyone would have listened from the start it would be all over now. Instead the freedumb fighters have managed to make it a two or three year crisis. good job.

Tony Bennett
Tony Bennett

Just the facts.

Today's initial unemployment claims.

Consensus ... 2.5 million
range of "experts" ... 2.45 million to 2.6 million

actual ... 2.981 million

Houston, we have a ...


I hate to say this but the really painful part of this economic correction is still to come.
The underlying issue of our economic problems is that we have inflated assets to unsustainable levels to support ever increasing borrowing.
Assets are going to be revalued going forward, and that is going to be a real reckoning.
Many people who think they have a good amount of wealth in home equity and retirement accounts are going to find out that they are actually broke when assets begin to deflate.

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