The Google mobility indicators show a further decline in both mobility and economic activity over the past week. The dip perhaps overstates the scale of the drop with US Thanksgiving holiday (which generated a bump in activity going into the holiday, and dip during and after) combining with tougher localised restrictions there. The story in Europe was better.
The latest google mobility statistics suggest things have stabilised a little. Although the devil is in the detail. On the DM side, Europe looks fairly static from last week but this masks a further sharp drop in Italy, which offset something of a bounce in France and the generally steadier picture we’ve seen in Germany and Spain.
We’ve seen a further downturn in the European mobility, as national lockdowns continue to bite, with the UK, France and Italy all falling significantly over the past seven days. Spain and Germany have been steadier, helped by the fact that they’ve been able to bend the Covid infection curve, with new cases rolling over and doing so from lower infection levels. Looking at things globally the picture looks more balanced, European weakness offset by ongoing improvements across Asia and in the larger emerging markets.
The latest Google mobility data is starting to show the impact of lockdown 2.0. What is interesting is how both Lockdown 2.0 is being implemented compared to the draconian measures enacted back in the spring, and how these restrictions are varying in their impact country to country. The regional divergences we identified last time persist. This is again a function of the resurgence of the virus in northern hemisphere developed markets, and the measures taken to combat this.
October Non-farm payrolls number came in at +638k (mkt +600k), leaving the 3m average at +934k. But the private payrolls number comfortably bettered expectations once again at +906k vs. 690k mkt. Manufacturing payrolls grew but not as much as hoped (+38k vs. +50k est) while we saw another month of government job losses, -268k following on from -220k in Sep. Revisions overall were slightly positive though
The tale of diverging fortunes between Asia and Europe (and to a lesser extent the US) persist in the latest Google mobility numbers, as rising Covid infections in certain countries drag on mobility. The second round of national lockdowns in Europe have started to drag on overall mobility.
The resurgence of Coronavirus in the developed economies, specifically Europe and to a lesser extent (so far) the US is leading to a clear divergence in economic activity According to the latest global mobility and economic activity data (running through to 16 October), DMs continue to show a deceleration in activity.
Global mobility and economic activity data, published by Google, is pointing to some loss in the momentum of recovery. Although the mobility indices continue to register small improvements (despite the resurgence of the virus in many places), economic activity is not following through from that.
To refresh, these indices measure the level of activity as measured against the pre-pandemic level using the Google Mobility Indexes, adjusted by Independent Strategy. Activity is a smoothed average of the economic and mobility measures, which provides a guide to the current recovery trend. The data runs through to the end of September.
September non-farm payrolls number came in under expectations at +661k (mkt +850k). But the private payrolls number bettered at +877k vs. 850k mkt, while manufacturing payrolls also beat (+66k vs. +35k est) with a loss of 216k on the government side explaining the headline miss. There was a sizable upward revision to the jobs gained in August too.
ADP reporting a further strong month of job gains (or jobs recovery) with the749k increase and net 53k upward revision to August quite a bit ahead of expectations, although consensus estimates should be taken with more of a pinch of salt than usual given the variables in play. It was mid-sized firms that drove the increase, alongside small businesses. There was actually a deceleration in job creation at larger firms, although they still added workers.
These indices measure the level of activity as measured against the pre-pandemic level using the Google Mobility Indexes as adjusted by Independent Strategy. Activity is an average of the economic and mobility measures. The data are weighted and averaged over seven days to define the trend. The data runs through to 11 September. The current deviation from where things stood pre-crisis is shown in Figure 1.
August’s non-farm payrolls report came out basically in line with expectations (+1.371mn vs +1.400mn consensus). While we saw a modest downward revision to the July release, the report reinforces the overall “repairs underway” story for the labour market. Part of this was due to further strong growth in government payrolls (+344k), private payrolls (1.027mn) were rather further from the markets more confident expectations.
We’ve been honing high-frequency indicators to follow the pace of recovery in major economies from the depths of the Covid pandemic lockdowns. Our indicators, entitled mobility and economic activity indexes, measure the level of activity against the pre-pandemic level using the Google Mobility Indices and the Dallas Fed’s Mobility Engagement measure. We adjust these to obtain a smoothed and comparable index of near-time activity.
Another solid non-farm payrolls report, with 1.763mn jobs added in July, taking the 3-month gain to 9.27mn. That means the US has now recovered roughly 40% of the jobs shed during the turmoil of March and April. The report cements confidence that the labour market continues to repair, mirroring the conclusions of yesterday’s weekly jobless claims, if not the lower than expected ADP print we got on Wednesday.
The recovery of the US labour market continues. ADP reported 2.369mn jobs were added in June. This was accompanied by a sharp upward revision to May’s report (initially reported as a loss of -2.760mn job and now revised to a gain of +3.065mn. That might bring it closer to the May non-farm payrolls report (+2.509mn) but is nonetheless a rather astounding revision, which perhaps encapsulates the problem of accurately measuring the Covid shock.
The disruption from the Coronavirus continues to impact the data with the employment numbers for May showing a significant deviation from expectations and the near 2mn loss reported in the May ADP report. Indeed, based on the preliminary numbers the economy added 2.51mn jobs over the month, which compares to the 20.69mn jobs lost in April. Methodological problems are again in evidence ...
While the decline in first quarter GDP (-4.8% q/q ann.) was not unexpected, the outturn still doesn’t represent the full scale of the economic contraction. The collection periods of the sample data are focused in the early part of the survey period and the assumptions the models make for the balance of the period rely heavily on these inputs.
Bleak payrolls report. While the median survey was always going to be a short in the dark, the -701k decline in jobs was significantly more troubling than the mkts -100k guess. That’s the worst number since March 2009, a period of losses that saw five consecutive payrolls figures below the -700k mark starting from November 2008. Looking at the past fortnights jobless claims figures the April number and revisions to this release will paint an even bleaker picture of the labour market. In the household survey nearly 2.987mn jobs were recorded lost.
ADP reported fewer than expected job losses for March, with a modest -24k drop (mkt -150k), which compares to the 3.3mn jump in initial jobless claims last week. Partly this is due to the survey dates (it tallies responses up to the 12th of the month). So we will see catch up next month. Prior month was revised down to 179k from 183k.