The Delta Variant: Macro Implications

From DB, does the UK presage the US?

Source: Yared, “The case against cases,” Deutsche Bank, June 29, 2021.

Goldman Sachs presents data on the share of cases now accounted for by Delta Variant in various countries.

Source: Nathan, et al. What’s Top of Mind in Macro Research, June 30, 2021.

While cases might rise rapidly in parts of the US that have low vaccination rates, Yared et al. conclude that given the timing (summer), and the fact that hospitalization rates haven’t risen in tandem with cases in the UK:

(1) the focus should shift from cases to hospitalisations and (2) the delta variant should not materially impact the reopening in the EZ and the US.

I hope that’s an accurate prediction.

See here for an examination of how vaccination rates vary across the geographic distribution of GDP.


41 thoughts on “The Delta Variant: Macro Implications

  1. New Deal democrat

    Menzie, unfortunately there is not good news here.

    Deaths lag cases by about 4 weeks. Cases started trending higher in the U.K. about 7 weeks ago. Deaths started trending higher about 2 1/2 weeks ago. Deaths were averaging about 8.5/100,000 per day 2 1/2 weeks ago. They are now averaging 17.5/100,000.

    In the US, average weekly cases bottomed 10 days ago.

    Stock prices peaked in late February 2020 as soon as the US had its 1st case of community spread in Washington State, as estimates of corporate profits started to get revised down. No sign of that happening yet. In the U.K., FTSE only down slightly in the past 2+ weeks.

    Since it seems a foregone conclusion that large swathes of the US will follow the UK’s trajectory (biologist Trevor Bedford estimates the delta variant will cause about 35 million new infections in the US), the question becomes will any of the economic “re-opening” in those States reverse.

    1. Menzie Chinn Post author

      New Deal democrat: The point of the DB article is that hospitalization rates did not move up in tandem w/cases, in the UK. Hence, unclear that we should think that re-imposition of social distancing measures/lockdowns would be necessary. On the other hand, risk aversion could have qualitatively similar impact.

      1. Ulenspiegel

        “The point of the DB article is that hospitalization rates did not move up in tandem w/cases, in the UK.”

        The daily deaths increase again. The 20 death per day now were caused when there were 3500 infection per day four weeks ago.
        Now we observe around 25000 daily infections. Hence 100 deaths per day in four weeks seem to be plausible.

  2. joseph

    The same thing is happening in Israel as the UK. Very low case rates are now increasing exponentially once again. This indicates that even vaccination rates of 65%, the highest in the world at this point, are not enough to stop the pandemic.

    The good news is that the hospitalization and death rates are not increasing exponentially as they did in previous waves.

    Unless we can get vaccination rates up into the 80% or better range, we are going to be dealing with this pandemic for another year. Not as many deaths but enough cases to result in continued social distancing and masking measures that will have provide at least some drag on the economy and a return to normal life. How much effect remains to be seen.

    Right now Canada seems to be taking the world lead on vaccination rates, so they could be the new bellwether.

    1. Ulenspiegel

      “This indicates that even vaccination rates of 65%, the highest in the world at this point, are not enough to stop the pandemic.”

      The R of the deltavariant is ~6, therefore, you need 85% vaccination/infection to prevent an exponential growth. The situation in UK is no surprise for experts.
      The (political) mistake was to open four weeks too early.

  3. Moses Herzog

    So Yared “and friends” are saying seasonal impacts (summer heat, sunshine) save the USA from transmitting Delta variant at the speed of UK?? Did we see that last year in the summer time?? I’m a little cynical on this, especially when it appears UK has a higher percentage of the population vaccinated:

    1. Menzie Chinn Post author

      Moses Herzog: I think they are saying that people are less inclined to be inside in poorly ventilated rooms, and given the academic schedule, students are less likely to be in close quarters in poorly ventilated classrooms.

      1. Moses Herzog

        Honest to God, I’m not trying to be argumentative here, just giving my straight take on it. Isolate that red graph line on the DB/Bloomberg graph. Just show me
        late July to end of September, what do you see?? You can tell me that’s “cherry picking”, but there’s only one summer per year. You can argue there’s a monstrous jump around, what, mid-October?? But isn’t that very logical when you’re talking about a virus (sans masks and sans vaccine) that spreads exponentially ??

    2. Moses Herzog

      This is the nearest I could find to a link to the paper that wasn’t “War and Peace” novel length.

      It’s probably like a “working paper” version, but I seriously doubt it’s that different from the final version.

      I keep hearing this about transmission rates going down in the summer. Then I see video on TV of thousands of college and high school age kids getting drunk and dancing closely on the beach, and no difference in the rates. I wanna see this graph (nonexistent??) where the Covid-19 transmission rates are going down in the summer time.

      1. valuethinker

        From what we know of the virus, that it transmits via aerosol particles but really does not like sunlight, it’s a fair bet that summer spread should be less than winter spread. And in particular the unvaccinated, ie the young, don’t get together in big groups inside before September in most countries (Scotland actually goes back to school in August; English universities start at the beginning of October).

        *However* there is the Euro-football effect. When Scotland was playing at Wembley, 2000 Scots were tracked who travelled down to London (about 500 with actual tickets to the game). Over 1600 wound up testing positive for Covid-19, so from pubs & other socialising, plus travel on air conditioned trains. We’ve just had England playing, at home, for the Finals. Is this going to be remembered for the team taking the knee, or for the superspreader event of all time? Many of the attendees would have been unvaccinated or only partially so.

        The government is determined that we shall have a summer Festival season. I understand that it will be possible to fly to, and return from, Ibiza without quarantine. etc.

        By September, things could look very grim indeed.

  4. pgl

    The headline message in the MAGA hat areas should be – get your damn vaccination TODAY!

  5. joseph

    It’s noteworthy that just two months ago the UK had squashed their cases per day to less than 2000 and deaths per day to zero. Now, two months later the cases per day is more than 25,000 and deaths per day 25. That’s more than a 10-fold increase.

    The U.S. is trailing behind the UK but there are troubling signs of the same trend. Case rates, instead of falling, are starting to climb. Just two weeks ago the daily case rate was 12,000. Today it is over 14,000. In another month we could be in the same situation as the UK or worse given the lower vaccination rate in the U.S.

    Again, death rates are not climbing as fast as cases, but it’s hard to believe that if cases in the U.S. climb to 100,000 per day it won’t have some effect on social behavior.

    1. 2slugbaits

      joseph Not to worry. A couple dozen GOP states have decided that the best way to make the pandemic go away is to simply quit reporting the numbers and to shut down health department websites. Brilliant.

      1. Moses Herzog

        In my state, which some claim to be “the reddest state in the nation”, citizens have played hell getting either current or accurate numbers (which OSDH has never once supplied throughout the entire process) from February 2020 clear up to this very moment. And what’s worse, when you harangue the members of the media to discuss “excess deaths” they act like you’re asking them to write about Quantum fusion. All the sudden these print journalists who tell everyone they’re “jack of all trades” become functionally retarded.

      2. Dr. Dysmalist

        ” … the best way to make the pandemic go away is to simply quit reporting the numbers and to shut down health department websites.”

        Deliberate, arrogant ignorance is a badge of honor now, don’t cha know. Don’t like some analysis based on real data? Use your feelings, Quke. Pull something different out of your a**, use a cherry picked factoid out of context, & you’ll be golden. Make sure you put it on line so another ignoramus can quote you, just as you should feel welcome to quote their online anal emissions.

        Don’t believe me? Witness the prior comment thread. Boy, am I sorry I missed that one in semi-real time. A reunion of the (recent) Usual Idiots (sorry PGL, time for an update) minus one, complete with their usual bag of pseudo-intellectual tricks. Climate denialism: pre-MAGA for the MAGAmorons, pre-Q for the Q-holes, anti-reality for both. And no, I don’t know why I’m differentiating between the two groups – by now, the Venn diagram of the two is pretty much a perfect circle.

        People like this will be responsible for continuing the pandemic. While they have the ability and (especially) the means to keep themselves safe, they continue to barf out more bilgewater that the tragically ignorant folks will believe justifies, or at least excuses, unsafe behavior when unvaccinated. People like this and the fools who believe them are the reason that we have not only the Delta variant but Delta-plus (thanks, Louisiana!), and likely will have several more variants before this thing is over. I can only guess that they think climate change isn’t killing enough people fast enough but a pandemic is a damn good, and convenient, way to accelerate the process.

    2. valuethinker

      Hard to know. In that I had thought that the threat of Covid would drive everyone into social isolation.

      You can get the Delta variant even if vaccinated. You can be seriously ill, even if you are less likely to die. You can have Long Covid, and that is devastating.

      “fake news”. People believe what they want to believe. America has its own alternative news network (ie Fox) whereas in other countries broadcasters are required to be more balanced by their licenses (Canada is an interesting Control Group in that experiment – same language, almost identical culture, but even the right wing Premiers are telling people to get vaccinated (Jason Kenney in Alta, Doug Ford in Ontario)).

      Based on what is happening here, in the UK, you are very likely to have a serious crisis on your hands in the USA by mid-late August. It won’t be as bad as the Second Wave (one hopes) but given your vaccination levels, it will be bad, especially in some southern and Great Plains states (lower population densities seem to correlate with lower infection rates, but South Dakota (?) has the highest death rate in the world).

      Delta is not to be trifled with. It has properties of vaccine escape (to an extent) and it is highly transmissible. One passenger infected 1/3 on a commercial flight from Delhi to Singapore. One airport limo driver in Sydney brushed by some people in a shopping mall, and western Sydney is in lockdown with over 100 cases.

      As usual, it will be the poorest, and those who work in customer facing jobs that require a physical presence, who will suffer the worst.

  6. ltr

    July 4, 2021

    Chinese mainland reports 14 new COVID-19 cases

    The Chinese mainland recorded 14 new COVID-19 cases on Saturday, all from overseas, data from the National Health Commission showed on Sunday.

    No new deaths related to COVID-19 were reported.

    A total of 18 new asymptomatic cases, all from overseas, were recorded, while 452 asymptomatic patients remain under medical observation.

    This brings the total number of confirmed COVID-19 cases on the Chinese mainland to 91,847, with the death toll unchanged at 4,636.

    Chinese mainland new imported cases

    Chinese mainland new asymptomatic cases

    1. ltr

      July 3, 2021

      Over 1.28 bln doses of COVID-19 vaccines administered in China

      BEIJING — More than 1.28 billion doses of COVID-19 vaccines had been administered in China by Friday, the National Health Commission said Saturday.

      [ Chinese vaccines are being administered domestically at a rate of 20 million doses daily.

      There has been no Chinese domestic coronavirus case detected these last 12 days. Cases detected have been overwhelmingly imported since April 2020. A small cluster of domestic cases detected in late May and early June 2021 were isolated and completely contained by contact tracing. There have been only 2 coronavirus deaths since April 2020. ]

    1. pgl

      You have already admitted you do not have cable so I presume your NBA is Laura “just shut up and dribble” Inghram which explains you total lack of understanding of the game and your fixation with insulting short black players.

      But no – I’m fine with people disagreeing with me. But you are just making up pointless lie on the order of Donald Trump. But OK I’ll find another word to call out people who watch only when they get to wear their KKK uniforms.

      BTW – I don’t subscribe to the NYTimes so whatever this is story is about I’ll have to trust you even though we are a serial liar.

      1. Moses Herzog

        This may come as a shock to you pgl, but much of the coverage, I would say about 80% of the crap you watch on ESPN, is available for FREE over the internet, maybe lagged 1 hour (at the most, some you can probably watch “live”). You can even watch near entire NBA games, minus timeouts, minus commercials, and minus Stephen “Women Bring Violence Upon Themselves” Smith. I choose to skip most of it because the quality of analysis is poor, there are many sexist and racists who contribute to ESPN coverage, along with the racist/sexist leadership of ESPN (which the article states has been true for decades and leading up to now). Not to mention the fact the “analysis” (as you label it) is designed for idiots like you with ADHD who think a 15 second animated graphic in-between 20 minutes of commercials they were dumb enough to pay to watch, will tell them where the Ark of the Covenant is.

        But the fact you think someone who doesn’t watch low substance programming on a channel which is 85% commercials to idiots like you who PAY to watch a commercial “must be watching Laura Ingraham” or if you don’t watch bad programming on ESPN that person must be “KKK” pretty much verifies the demented mental world most of us on this blog have surmised that you live inside. It almost makes me feel sad for you. not quite, but almost.

        1. pgl

          More long winded nonsense. You write some of the most dishonest and pointless crap ever. Do grow up someday. Geesh!

      2. pgl

        Actually I should apologize to Laura and even she does not go off in the disgusting way you have about a single player in the NBA. I call you a racist simply because your tirades do come off as extremely racist. That is no one’s fault except yours.

        BTW I doubt you have ever watched an NBA game given your incredibly stupid comments that you just repeat over and over again. And I know you have never played as the moment someone picked you – you’d crying to mommy that the man hurt you.

        Look – we know you are a pointlessly angry little clown. Chill as you do not have to impress us any more with your totally worthless garbage.

    2. pgl

      Old Uncle Moses when he is not making dishonest claims with respect to a certain young NBA star has been on some tirade about how ESPN is a bunch of racists. Now Google ESPN and racist and you will see a lot of stories like these accusing ESPN of launching racist attacks:

      But wait the accusers are all Trumpians aka the KKK culture war crowd suggesting ESPN hates white people. The weird company Old Uncle Moses keeps!

      1. Moses Herzog

        pgl is labeling Maria Taylor “Trumpian”?? Then defends ESPN. Interesting tact for someone who calls anyone who disagrees with himself “racist” or “sexist”. pgl can’t even go two comments without contradicting himself—as he shows just below in this thread.

        1. pgl

          Damn – your reading skills suck more than usual. Maria Taylor is the person I praised in this unfortunate situation. Then again you are the Rachel Nichols one here so I guess you had to misdirect with what turns out to be a flat out lie – as usual.

        2. pgl

          Fox and Friends is really proud of two new editions to their morning line up. First they hired Princeton Steve as their chief economist.

          And now the news is that they have added Uncle Moses as their expert sports analyst. I’m sure Moses and Steve will make a great team for the MAGA crowd.

      2. Moses Herzog

        @ pgl
        While pgl is on this blog, for the last 3 weeks avidly singing the praises of at least one of ESPN’s sexist hosts, and most of the time “defending ESPN’s honor” as a great place for anyone and everyone to source their sports coverage from, a question pops into mind:

        How many months, until commenter “pgl” figures out who ESPN executive leadership left as “the odd man out” in Nichols’ sorority girl attacks on Maria Taylor?? Since everyone here knows pgl has severe ADHD and therefor very poor reading comprehension of anything extending over 2 paragraphs, let’s give “”pgl” a clue shall we?? Some small segments lifted from the NYT story:
        “The spread of the recording throughout ESPN happened less than a week after Pitaro had pledged “accountability” and improvements throughout ESPN’s workplace culture.

        ‘We are going to speak through our actions here, and we are going to improve,’ Pitaro said in an interview then. ‘If we don’t, it is on me, I failed, because it does all start with me.’

        Still, nobody was outwardly punished besides Johnson, the producer who recently departed ESPN. She left with a handful of Black employees who had pressed Pitaro for changes.”

        It goes on at the end of the Kevin Draper authored article:
        “Taylor’s contract with ESPN expires in less than three weeks, and it looks increasingly likely that those could be her last weeks at the network.”

        How long will it take our pseudo-intellect pgl to figure out who ESPN executive leadership is making the odd man out in this situation??? Probably pgl will finally reach cognition of this reality roughly around the time the Delta variant disappears from plant Earth.

        1. pgl

          If they let Ms. Taylor go, that will be an outrage. But a win for your girl Rachel Nichols.

          BTW – I have never praised Steven A. Smith’s personal life and you know that. But you lie about what I have said routinely so who gives a damn about your serial garbage.

          I do know Mr. Smith has two daughters who he adores. He also adores him mom and four sisters.

          And he apologized for the one thing you dug up from 6 years ago. Something a hate filled little liar like you would never go.

          But do go on and on with your dishonest hate parade. It is after all – all you got.

  7. pgl

    An ungated version:

    I have watched Rachel Nichols and she is even dumber than you are when it comes to the game. She leans heavily on the other people on the show sort of Steno Sue time.

    Now Maria Taylor is on the air because she gets the game and does a great job. Something drunk Uncle Moses would never get. BTW – liar Uncle Moses does not have cable so he has to rely on his buddies at Fox News for his (lack of) NBA knowledge as in just shut up and dribble.

    But back to Ms. Nichols – she is whining like a spoiled little witch (but with a b). Some old Uncle Moses gets and does repeatedly.

    1. pgl

      “Now Maria Taylor is on the air because she gets the game and does a great job. Something drunk Uncle Moses would never get.”

      What I said from the beginning. And drunk old Uncle Moses now says I called Ms. Taylor Trumpian. Is he really his stupid? Nah – just a pointless little liar as usual.

  8. 2slugbaits

    One thing that might ameliorate the macroeconomic impact of the Delta variant is that most of the vulnerable and unvaccinated people live in states that don’t contribute a lot to national GDP. Mississippi and Arkansas could fall of the face of the earth and the rest of us would hardly notice. It would certainly raise the average education level. In fact, those states are probably an economic burden for the rest of us.

  9. rjs

    i hope i’m not off topic on this thread, but we should be aware that there are Covid reporting issues associated with holidays, which are going to make it difficult to get a handle on the rate of change for a couple weeks….new cases reported in the US during the week ending July 3rd were 7.0% higher than during the week ending June 26th , but the week over week increase was limited because of an anomalously small number of cases reported on July 3rd compared to other Saturdays, which i presume was tied to the July 4th holiday; before that drop in reported cases on July 3rd, US cases were showing an 11% week over week increase late last week…similarly, US deaths attributed to Covid during the week ending July 3rd were 22.9% lower than during the week ending June 26th, but again, deaths reported on July 3rd were half of the average of those reported on the most recent Saturdays; remove that July 3rd drop, and deaths were only down 18.2% from the prior week…since reports on July 4th and 5th are similarly well below normal, it may be a few weeks before we get a clear idea how fast new US cases are really rising…

    it’s been my experience tracking this data around other holidays that there has been some “catch up” in the week following a holiday, but it’s always seemed that some reports just go missing completely…whether they’re gradually picked up in following weeks or not, i can’t say…

  10. rjs

    following up on the above, new cases reported in the US during the week ending July 10th were 25.3% higher than those reported during the week ending July 3rd, and 40.6% higher than those reported during the week ending June 26th; however, since the data reported for July 3rd, 4th and 5th is suspect, i tried comparing later in the week figures week over week to see what we get excluding the holiday effect; new cases over the three days ending Friday (July 9th) were 32.7% higher than during the same three days of the prior week (June 30, July 1 & July 2), and 53.9% higher than the 3 day period ending June 25th…

    elsewhere, the European case data that’s a week old has not aged well either…in order of those most infected, new cases in Spain were up 103% over this past week; new cases in France were up 61%, new cases in the Netherlands were up 386%, new cases in Portugal were up 39%, and new cases in Greece were up 163%…

    it’s probably not a coincidence that most of those countries are close to England; the UK was averaging 2,009 Covid cases a day during the week ending May 8th; over the past week they’ve been at 30,144 cases a day, a 1500% increase in 9 weeks…

    1. valuethinker

      The key connection to the UK is travellers. So France by proximity, ditto Netherlands.

      But Spain, Greece, Portugal. Not sure what all the restrictions are on UK travellers right now.

      Great Britain is fast becoming “Plague Island” due to the Delta variant and the government’s relaxation of controls.

      I dread to think what our caseload is going to look like when all of the Euro football-related spreading is counted. We had neighbours booking tables in the pub for Sunday night, or asking if we wanted to pop round to watch the game with them…

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