Welcome to a regular snapshot-review of U.S. and international economic news that aims to 1) provide a window into the challenges and decisions facing businesses today, 2) determine the direction of economic policy — such as the speed at which central banks decide to raise interest rates, and 3) assess what the impact will be for consumers.
Another Up and Down Week In The Pandemic Battle
Pharmaceutical company Johnson and Johnson joined AstraZeneca in having an uneven news week, with the bulk of attention on its announcement that a mistake at a factory might have ruined up 15 million doses of its single-shot vaccine.
According to the company, a quality control process flagged one batch of drug substance that did not meet quality standards at Emergent Biosolutions, a Baltimore, Maryland-based contractor. “This batch was never advanced to the filling and finishing stages of our manufacturing process,” the statement said.
Johnson and Johnson said it is providing additional experts to be on-site at Emergent to supervise, direct and support all manufacturing of its COVID-19 vaccine, and assured that “these steps will enable us to safely deliver an additional 24 million single-shot vaccine doses through April.”
Earlier this week, J&J had announced an agreement to supply the African Union’s 55 members with up to 220 million doses of its vaccine beginning in Q3 of this year.
The AU could also order an additional 180 million doses, for a combined total of up to 400 million doses through 2022. The availability of the vaccine candidate will depend on its successful approval or authorization by the national regulatory authorities of AU member countries.
Meanwhile, the vaccine developed by British-Swedish pharmaceutical company AstraZeneca continues to combat concerns about possible side effects.
The German government this week said it will reduce the use of AstraZeneca’s vaccine to only its citizens over the age of 60 based on a recommendation by the German Standing Committee on Vaccination (STIKO).
“The recommendations published by STIKO are based on findings compiled by experts in recent weeks regarding very rare but very serious cases of clots in the vessels draining blood from the brain (CVST) in individuals who had been inoculated with the AstraZeneca vaccine,” the government said.
The European Medicines Agency’s safety committee held a meeting this week to as part of its “ongoing review of very rare cases of unusual blood clots associated with low numbers of platelets” in people vaccinated with the AstraZeneca vaccine.
The EMA also said it convened a gathering of external experts this week as part of its assessment of the vaccine, to discuss the blood clotting instances reported so far and the potential risk. The agency said that it has not yet identified a reason for the cases of blood clotting, and that “a causal link with the vaccine is not proven, but is possible and further analysis is continuing.”
The vaccine was developed in collaboration with Oxford University, and the UK Medicines and Healthcare products Regulatory Agency this week — as part of its review of blood clots cases — said “up to and including 24 March, we have received 22 reports of cerebral venous sinus thrombosis (CVST) and 8 reports of other thrombosis events with low platelets, out of a total of 18.1 million doses of COVID-19 Vaccine AstraZeneca given by that date.”
“On the basis of this ongoing review, the benefits of the vaccines against COVID-19 continue to outweigh any risks and you should continue to get your vaccine when invited to do so,” the MHRA said.
Meanwhile the tug-of-war between the EU and UK over who is first in line for delivery of AstraZeneca’s vaccines continues. In an interview with the Financial Times, EU Internal Market Commissioner Thierry Breton warned that “zero” vaccines would be shipped to the UK if the company does not first fulfill its contract obligations to the bloc.
“If [AstraZeneca] does more, we don’t have any issue, but as long as it doesn’t deliver its commitment to us, the doses stay in Europe — except for Covax,” he said. Covax is the program to deliver vaccine doses to low-income countries. “There is no negotiation,” Breton added.
Finally, Pfizer and BioNTech announcedthis week the results of a phase 3 trial focused on children aged 12–15, saying that its COVID-19 vaccine demonstrated a 100% efficacy and robust antibody responses, even better than results for vaccinated participants aged 16 to 25 years old.
The companies said they plan to “submit these data to FDA as a proposed amendment to our Emergency Use Authorization in the coming weeks and to other regulators around the world, with the hope of starting to vaccinate this age group before the start of the next school year.”
In the United States, President Joe Biden in remarks this week said the government will push to administer more shots in April than in March. “Because we’re in the life and death race for the virus that is spreading quickly with cases rising again,” he said, noting that “new variants are spreading.”
Biden said to make it easier for more Americans to get vaccinated, he is directing his COVID team to ensure there is a vaccine site within 5 miles of 90 percent of all Americans by April 19th. For its own part, the federal government in the next three weeks will add 12 more mass vaccination sites.
The Center for Disease Control reported that as of April 1, 200,496,635 total doses of the COVID-19 vaccine have been distributed — compared to 173,525,335 at the same point last week. Of this week’s overall number, 153,631,404 have been administered — 99,565,311 Americans have received one or more doses (30% of the entire population), 56,089,614 have been fully vaccinated (16.9%).
Worldwide, there have now been 595,923,114 vaccine doses administered, compared to 489,031,670at the same point last week.
Globally, there have now been 129,711,196 confirmed cases of COVID-19, with 53,365,928 active cases and 2,829,516 fatalities. The U.S. now has 30,731,414 confirmed cases, and there have been 558,213 fatalities.
The CDC reportedthat the number of cases linked to the UK COVID-19 mutation has grown to 12,505 as of April 1, compared to 8,337 as of March 25, and is present in all 51 states. There are now 323 cases of the South African variant (up from 266 cases last week) in 31 states, and 224 cases of the Brazil mutation (compared to 79 cases last week) in 22 states.
The head of the CDC, Rochelle Walensky, warned during a press briefing this week of an alarming rise in COVID-19 cases, with an accompanying jump in hospitalizations and deaths. Citing a “recurring feeling I have of impending doom,” Walensky said that “we are just almost there but not quite yet,” comparing the trajectory of the pandemic in the U.S. to the situation in many European countries like Germany, Italy, and France a few weeks ago. “And since that time, those countries have experienced a consistent and worrying spike in cases,” she added.
Back to the pandemic rankings. Brazil remains in second place with 12,842,717 cases at time of writing — 1,278,059 active and 325,559 deaths.
India’s number of confirmed cases is now at 12,221,665. Of that number, 584,055 are active and there have been 162,927 fatalities. The significant surge in cases has spurred the Indian government to aggressively ramp up its vaccination drive, which could have knock-on effects on the global COVID-19 vaccine supply.
The ongoing surge in France has pushed it up to fourth place with 4,695,082 cases — 4,333,067 of that number are active, and there have been 95,976 fatalities. The French government this week imposed its third national lockdown and closed schools for three weeks in an effort to combat the psike in COVID-19 infections that threatens to overwhelm hospitals.
Russia is now in fifth place with 4,563,056 confirmed cases — 277,172 active and 99,633 deaths.
The United Kingdom is sixth with 4,350,266 cases, and has had 126,764 fatalities. The country is now in its next phase of gradually easing lockdown restrictions, with outdoor sports facilities allowed to open. The government also announced a deal with GlaxoSmithKline to bottle 60 million doses of its Novavax vaccine at a facility in Northern England beginning in early May.
Italy remains in seventh with 3,607,083 cases — 563,479 active and 109,847 deaths. The government this week extended its partial lockdown restrictions until the end of April.
In eighth place is Turkey with 3,357,988 cases, with 291,232 active and 31,713 deaths. Spain is ninth with 3,291,394 confirmed cases, and 75,541 deaths.
Germany remains in tenth with 2,854,148 confirmed cases, 242,114 active and 77,244 fatalities.
US Economy Adds Over 900k Jobs, But Still A Long Way To Full Recovery
The U.S. economy added 916,000 jobs last month, and the unemployment rate dipped down to 6%, the Bureau of Labor Statistics reported this week. However, non-farm payroll employment is still down by 8.4 million, or 5.5%, from its pre-pandemic peak in February 2020.
The change in total nonfarm payroll employment for January was revised up by 67,000, from +166,000 to +233,000, and the change for February was revised up by 89,000, from +379,000 to +468,000. With these revisions, employment in January and February combined was 156,000 higher than previously reported.
“Job growth in March was widespread, with the largest gains occurring in leisure and hospitality, public and private education, and construction,” the BLS said.
The number of unemployed persons, at 9.7 million, is 4 million higher than in February 2020. The number of long-term unemployed (those jobless for 27 weeks or more), at 4.2 million, is up by 3.1 million since February 2020. The BLS said the long-term unemployed accounted for 43.4% of the total unemployed.
The number of persons employed part time for economic reasons, at 5.8 million, is 1.4 million higher than in February 2020. The number of persons not in the labor force who currently want a job was about unchanged at 6.9 million in March but is up by 1.8 million since February 2020.
In March, employment in leisure and hospitality increased by 280,000, as pandemic-related restrictions eased in many parts of the country. Nearly two-thirds of the increase was in food services and drinking places (+176,000). On the other hand, employment in leisure and hospitality is down by 3.1 million, or 18.5%, since February 2020.
Construction added 110,000 jobs in March, following job losses in the previous month (-56,000) that were likely weather-related. The manufacturing sector added 53,000 in March, with job gains occurring in both durable goods (+30,000) and nondurable goods (+23,000). Employment in manufacturing is down by 515,000 since February 2020.
US Data Roundup: Surging Consumer Confidence, Home Prices, Manufacturing Activity
The Conference Board’s Consumer Confidence Index in March surged to its highest reading in a year to 109.7, up from 90.4 in February. The increase was driven by improvements in comsumers’ assessment of current economic conditions, as well as their short-term outlook for income, business, and labor market conditions.
This is “an indication that economic growth is likely to strengthen further in the coming months,” the Conference Board said, noting the rebound in sentiment boosted consumers’ purchasing intentions for homes, autos and several big-ticket items. “However, concerns of inflation in the short-term rose, most likely due to rising prices at the pump, and may temper spending intentions in the months ahead,” it cautioned.
The Federal Housing Finance Agency reported this week that House prices rose nationwide in January, up 1% from the previous month, according to the latest FHFA House Price Index. House prices rose 12% from January 2020 to January 2021. The previously reported 1.1% price change for December 2020 was revised upward to 1.2%.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported an 11.2% annual gain in January, up from 10.4% in the previous month. The 10-City Composite annual increase came in at 10.9%, up from 9.9% in the previous month. The 20-City Composite posted an 11.1% year-over-year gain, up from 10.2% in the previous month.
Phoenix, Seattle, and San Diego continued to report the highest year-over-year gains among the 20 cities in January. Phoenix led the way with a 15.8% year-over-year price increase, followed by Seattle with a 14.3% increase and San Diego with a 14.2% increase. All 20 cities reported higher price increases in the year ending January 2021 versus the year ending December 2020.
Meanwhile the demand for goods continued to drive U.S. manufacturing activity last month. The Institute for Supply Management’s March Manufacturing Index registered 64.7, an increase of 3.9 percentage points from the February reading of 60.8. This figure indicates expansion in the overall economy for the 10th month in a row after contraction in April.
There were surges in new orders, production, employment, and imports. On the flipside, the spike has led to an orders backlog as well as longer supplier delivery times. The ongoing logjam at many major ports around the country also contributed to a decline in orders for export.