AEG COVID-19 Analyses: April, 2020

AEG’s April COVID-19 Analysis


Memo to Michigan’s Governor: Covid-19 Progression and Michigan’s economy (revised 4/22)

April Releases and Other Analysis:

Current Commentary and Charts

 

Regional Update, April 27

Michigan COVID-19 Epidemic: Detroit Area, Lansing Area, Up North All on Solid Downward Trends; Grand Rapids Area Worrisome

April 27, 2020—East Lansing, Michigan—Anderson Economic Group experts released a new round of regional data analyses for metro Detroit, metro Lansing, Northwest Lower Peninsula, Hillsdale County, and the Grand Rapids MSA. These analyses continue the company’s efforts, begun in early February, to provide residents of Michigan and other states with the best available information on the public health and economic consequences of this epidemic and the government policies that are affecting the lives and livelihoods of our citizens.

In addition to analyzing Michigan as a whole, the regions we examine for this update include metro Detroit (3 counties), metro Grand Rapids (3 counties), northwest lower peninsula (7 counties), metro Lansing (3 counties), and Hillsdale County.

Summary of Michigan Analysis

  • The metro Detroit area has over 80% of the cases in the state. Strong evidence now shows the epidemic reached its peak in early April in this area, and case numbers have consistently trended down.
  • The path of the epidemic thus far has been well-predicted by a standard model, with better than 90% in-sample accuracy on total reported cases through the most recently available data.
  • In Hillsdale County and Northwestern Lower Peninsula, the case numbers rose and began to fall in early April, consistent with the path seen elsewhere in Michigan.
    Current case numbers are low to very low, and the prediction errors in our model are now down to a handful of people per county.
  • The Grand Rapids area is a hotspot where case numbers continue to grow. Furthermore, we have insufficient data to project the path forward for this region.

For all areas of Michigan—and for the United States as a whole—the path of the current wave of the epidemic seems to be strongly affected by both population density and the amount of international travel early in the year. Formal and informal social distancing policies seem to be effective in slowing the spread of the virus. However, the effect of “stay at home” orders are not yet clear.

As with prior analyses from Anderson Economic Group, these results are based on fully disclosed data sources, a written methodology, and a clear statement of known limitations in both the data and the models used.

Comments from our Experts

“I’m heartened that the downward trend in cases, which we formally noted in our April 13 memo to the Governor, has continued in Metro Detroit and the State as a whole,” said Patrick L. Anderson. “It is also good news that the seven-county area that stretches from Leelanau through Grand Traverse and north to Emmet county has very low cases, and the trend in those cases is down.”

“We are alerting residents of the Grand Rapids area, however, that the continued growth in the case numbers in that area are worrisome. We are currently not showing a projection for the three-county Grand Rapids area because of this. We hope these numbers stabilize soon.”

Modeling of the Covid-19 Pandemic

Since February, Anderson Economic Group LLC, together with the data analytics firm Supported Intelligence, has been gathering data from multiple countries and U.S. states to model the path of the COVID-19 pandemic. We identified the situation as a crisis as early as our February 10, 2020 release, and began releasing selected regional analyses in late March. We follow these practices in our work:

  1. We use a standard model for infectious disease analysis.
  • We employ a standard “S-I-R” (Susceptible-Infections-Recovered) model, which has over 50 years of widespread use and published results.
  • We compare results across multiple states and countries.
  1. We show the actual data.
  • We focus on a tangible concept: the number of people cases with the disease.
  • We show uncertainty, units, dates, and past prediction errors.
  • We use data compiled by the New York Times for most of the United States, and World-o-Meter for much of the rest of the world.
  1. We describe our methodology, data sources, and limitations.
  • See the memorandum for methods, data, limitations, and terms of use for this information.

Available Charts for Selected Areas

Data for every area continues to be updated and revised; therefore, our projections and analysis will change over time. See the chart gallery to view current charts demonstrating:

    1. The progression of the current wave of the epidemic, including total cases (reported and projected), goodness-of-fit statistics, and infection rate (new cases per day)
    2. Actual vs. predicted cases
    3. Growth rates

April 16: New Cases in Illinois, Michigan, and Ohio Trending Downward

Extensive review of data highlights welcome improvements for Detroit, Chicago

April 16, 2020—Chicago, Illinois—Anderson Economic Group has released new projections for COVID-19 cases in Michigan, Ohio, and Illinois, as well as the Detroit and Chicago metropolitan areas. The data show that infection rates in all three states are slowing and have passed their peaks in the first wave of COVID-19 infections (see updated figures).

The analysis includes data collected from each state on April 13. The methodology and data sources are fully described in a memorandum presented to Michigan’s Governor on Monday. Anderson Economic Group is making regularly updated forecasts available for several U.S. states. The analyses are intended to provide much-needed information to policymakers as they seek to balance public health and safety needs with rebuilding economies that are facing unprecedented freefall.

“The most recent data demonstrate a diminishing trend in new cases in Michigan, Ohio, and Illinois,” said Brian Peterson, director of public policy for Anderson Economic Group. “In all three states, the growth in cases is now close to or below 5% per day, compared to the 20% or higher daily rates that we saw in March.”

As the number of projected cases begins to decline, many states are now left to grapple with the economic repercussions of COVID-19 and stay-at-home orders. “The epidemic and stay-at-home orders have hit Midwestern states particularly hard,” Peterson noted. “The most recent unemployment insurance claims data show jobless rates that have not been seen for decades. Michigan now has depression-level unemployment, with over 16% of the workforce becoming unemployed in just three weeks. In Ohio, 12% of the workforce has filed for unemployment, while in Illinois 8% of the workforce has filed for unemployment. In the next few weeks, we expect these numbers to grow even larger.”

As infection rates begin to slow, the next step for policymakers will be to explore how to restart their state economies while minimizing new cases. According to Peterson, states should consider a phased approach to reopening economies, and factor local infection rates and population density into the decision-making process.


6.6 Million Unemployment Claims This Week: A “Perfect Storm” of Economic Distress

Michigan, Kentucky, Pennsylvania among states hardest hit by COVID-19

4-9-2020—East Lansing, MI—Newly released data on unemployment claims continue to show the unprecedented impact of COVID-19 and stay-at-home orders on the nation’s economy. The Department of Labor’s initial seasonally adjusted unemployment claims count for the week ending April 2 totaled 6.6 million. Anderson Economic Group estimates that, given the current economic climate and trajectory of the coronavirus, approximately 104 million Americans will lose two or more days’ worth of income this month due to the economic slowdown caused by COVID-19.

“The 6.6 million unemployment claims number for last week is staggering,” said Brian Peterson of Anderson Economic Group. “While the unemployment claims numbers provide some insight into the current state of the economy, the impact of COVID-19 extends well beyond just those who were able to file for unemployment.”

“We’re seeing unemployment application systems crash across the country due to unprecedented demand. Some workers are being furloughed, asked to take a pay cut, or are taking mandatory paid time off. Small business owners are struggling to keep their doors open as states extend stay-at-home policies. Because of this, we believe over 100 million Americans will lose a measurable amount of income in April.”

Several Midwest states, including Michigan, Kentucky, and Pennsylvania, have seen extreme increases in unemployment claims:

  • Michigan has received over 815,000 claims since March 28—a shocking 16.5% of the state’s labor force. We estimated in mid-March that 1.4 million workers in that state were likely to lose income this month.
  • Pennsylvania has received over 1 million claims in the past three weeks, constituting 16.3% of the state’s labor force. Pennsylvania and California have both reported more than 1 million claims over the past three weeks.
  • Kentucky’s 560,000 claims account for 13.4% of the state’s workforce.
  • Outside of the Midwest, claims have skyrocketed in California (2.2 million in the last three weeks), Hawaii (110,000), Nevada (244,100), Louisiana (272,800), and Rhode Island (92,000).

Dr. Matthew McMahon, an AEG consultant with Forensic Economic Services in California, states that “This week’s unemployment claims continue a very discouraging trend. They will surely have a lasting impact, not only upon California but across the entire country.”

“Over the past three weeks,” McMahon continued, “California alone has accounted for approximately 18% of those initial claims. Given recent developments in California’s employment law, the legislative response to COVID-19 pandemic, and the increasing uncertainty in Californians’ everyday lives, it is likely that the volume of claims will persist in the short run. The lasting effects of the pandemic are yet to be felt.”

Figure 1 Three-Week Initial Unemployment Claims as a Percentage of Total Workforce Size

Source: Anderson Economic Group analysis of base data from the U.S. Department of Labor, U.S. Bureau of Labor Statistics

This analysis was prepared by Anderson Economic Group economists Brian Peterson and Patrick Anderson in East Lansing, Michigan and Chicago, Illinois, along with consulting economists Matt McMahon and Roman Garagulagian in Los Angeles, California.


6 million unemployment claims this week “the tip of this iceberg of loss;” 104M workers actually losing income

Michigan, California, New York, and Florida hardest hit

4-2-2020—East Lansing, MI—The effects of the stay-at-home orders, restrictions, and shut-downs have proven as damaging as we feared when we first estimated that 104 million Americans would lose significant income this month.

“The 6 million new unemployment claims are just the tip of this iceberg of loss,” said Patrick Anderson of Anderson Economic Group. “We expect 90 percent of those losing income have not filed for unemployment, particularly those who are self-employed or in small businesses struggling to keep their doors open.”

The loss in states like Michigan and Illinois confirm the Midwest is suffering:

  • Michigan’s unemployment claims of 311,000 this week, on top of 128,000 last week, are the worst in the Midwest. The combination of the auto assembly shutdown, and the stay-at-home order, on top of the seriousness of the outbreak, are making Michigan the most seriously hurt state in the Midwest.
    We estimated in mid-March that 1.4 million workers in that state were likely to lose income this month. Unfortunately, that appears to be happening.
  • Illinois’ unemployment claims of 178,000 this week and 114,000 last week, while very large in normal times, are below those of Ohio (272,000) and Michigan.

Dr. Matthew McMahon, an AEG consultant with Forensic Economic Services in California, states that “This week’s unemployment claims were unprecedented in magnitude and will surely have a lasting impact not only in California but across the entire country.”

“Astonishingly,” continued Dr. McMahon, “California alone accounted for approximately 8% of those initial claims. Given recent developments in California’s employment law, the legislative response to COVID-19 pandemic, and the increasing uncertainty in Californians’ everyday lives, it is likely that the volume of claims will persist in the short run. The lasting effects of the pandemic are yet to be felt.”

The hardest hit states nationally are Michigan, California, Florida, and New York; along with Ohio, Pennsylvania, and New Jersey:

  • California (with 878,000 this week), Florida (with 227,000) and New York (with 366,000) join Michigan as the most heavily damaged states in the country. These states have both acute outbreaks and deep restrictions on the economic activity, with Florida the most recent to adopt a statewide order.
  • Other states, including Ohio (272,000), New Jersey (205,000) and Pennsylvania (455,000) are also seriously affected.

We note that differences in state unemployment laws and systems account for some of this variation, and our assessment of the hardest hit is based on broader economic and epidemiological factors.

This analysis was prepared by Anderson Economic Group economists Brian Peterson and Patrick Anderson in East Lansing, Michigan and Chicago, Illinois, along with consulting economists Matt McMahon and Roman Garagulagian in Los Angeles, California.

For additional information or to schedule interviews with Mr. Patrick Anderson (East Lansing), Mr. Brian Peterson (Chicago), or Dr. McMahon (Los Angeles) please contact the AEG offices at 517.333.6984 or send us a note.