Independent Strategy

Macro Matters

The improvements made in mobility and economic activity continues based of the latest batch of google mobility data.  The series take us up to 6th March and based on that the recovery remains on the front foot, underpinned by expanding vaccine coverage and the resulting boost to confidence that has delivered as well as the overall decline in infection rates, even if that trend looks to have flatlined more immediately.

February Non-farm payrolls recorded a 379k gain, comfortably exceeding the +182k median forecast.  This leaves the 3m average at +80k.  Private sector payrolls were significantly better than the headline print at +465k, manufacturing added +21k jobs while government dropped -86k.  The surprise might have been even higher were it not for the weather events in Texas, which was behind the 939k people not at work due to the weather (Feb average is 385k).  The unemployment rate ticked down to 6.2% and participation was unchanged at 61.4% despite this.  The workweek did drop though, to 34.6, although this is from a rather elevated 34.9.

Based on Google mobility statistics we’re seeing a sustained improvement in activity now.  This is only likely to gather speed as vaccine coverage continues to expand, restrictions ease, alongside the seasonal improvements one should expect upon the arrival of spring, and, with a bit of luck, some UV.

Google mobility data continues to paint an improving picture, with mobility and economic activity nudging higher again over the past week.  And the breadth of improvement is encouraging too. There was a solid increase across Europe in particular, driven by Germany but France, Italy, Spain and the UK also moved positively.  Developed Asia also fared well.  There was a modest dip in Australia amid some short-term localised lockdowns, but the damage from pre-Covid levels is far milder here anyway.

The past week hasn’t really seen any substantial shifts in activity, even if it’s increasingly clear that we’re past the worst as Covid cases continue to decline globally and the first signs of the vaccine impact start to percolate into the data. In the overall rankings, it is the Europeans that remain the most depressed compared to pre-pandemic levels of activity, with the UK languishing at the bottom of that league.  Germany and France took a step back based on the data, while there was a further mild improvement in Spain and Italy.

Global

10th February, 2021 » Early signs of recovery

With the continued decline in new reported Covid cases globally, it is no surprise that we’ve started to see an improvement in overall activity levels.  At least based on the Google data. Indeed, all but one of the countries in our sample recorded a week on week improvement.  The worst was France and that was simply stable.  Europe remains at the bottom of the pile in terms of overall activity, but the corner has certainly been turned and we’d expect to see this pick-up to extend and accelerate over the coming weeks.

Vaccination doses administered continue to rise by more than 30% a week. But still less than 10% of the population of rich countries have received a shot and less than 2% globally. The US and UK  lead with 13% and 19% with the EU at 4% of people having had at least one shot. People who have been completely inoculated are still low — less than 2% globally — 1% in the EU, 0.75% in the UK and 2.77% in the US.

Global

3rd February, 2021 » Steady, ahead of recovery

Another week of relative stability as measures to contain the pandemic remained static in most places.  More draconian restrictions in Europe leave the region at the bottom end of the spectrum while EMs and Asia rate far better.

Covid-19 vaccinations rising at a rate of around 40% per week.  Not much difference between EU 38%, UK 30%, US 36%.  Odd given vaccine wars!  The percentage of the population vaccinated at least one time now stands at 1.2% globally, EU 2.7%, US 8.4%, UK 13%.  While this is rising fast, this is still way short of herd immunity. And the percentage of the population fully vaccinated is still very low — less than 1% of the population everywhere except the US, Israel and a few small states (UK 0.7% and EU 0.4%).

Global

27th January, 2021 » Stuck in the doldrums

Economic activity seems to be bedding down in the doldrums amid lockdowns and other varying restrictions on activity.  Europe continues to suffer the most, although weak activity remains a broad phenomenon.

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