Pubblicato in: Banche Centrali, Devoluzione socialismo, Sistemi Economici, Stati Uniti

Fink, Ceo di BlackRock, ‘this is going to be a pretty big shock’. – Bloomberg

Giuseppe Sandro Mela.

2021-06-15.

Crack Up Boom 03

Un sintetico ripasso di chi sia Mr Fink e cosa rappresenti BlackRock.

Blackrock. Mr Fink, il vero padrone del mondo.

BlackRock rafforza il controllo della Exxon Mobil Corp.

BlackRock anticipa l’apertura cinese alla finanza occidentale. 3.4 trilioni in tre anni.

BlackRock (7.81tn Usd) continua ad espandersi in Cina, e vi porta i denari occidentali.

I tre giganti. I nuovi discreti padroni dell’Occidente. Nomi quasi ignoti.

Cina. I capitali internazionali acquistano bond cinesi in yuan.

BlackRock, Temasek Set Up China Asset-Management Joint Venture.

Warning! BlackRock guida la rivolta degli azionisti.

Exxon Mobil Corp e la Cina. Notizia non economica bensì politica.

* * * * * * *

Mr Larry Fink è uomo taciturno e schivo, ben poco propenso a rilasciare interviste.

Data la persona ed i tempi attuai, ne proponiamo un estratto.

«BlackRock CEO Larry Fink sees potential for ‘Big Shock’ from inflation»

«Investors today not used to prolonged inflation, Fink says that Policy makers must weigh inflation against climate concerns»

«Chief Executive Officer Larry Fink said that investors may be underestimating the potential for a spike in inflation»

«Most people haven’t had a forty-plus year career, and they’ve only seen declining inflation over the last 30-plus years …. So this is going to be a pretty big shock»

«Concern about higher inflation has already seeped into U.S. markets with the cost of goods including lumber and steel rising this year»

«The U.S. Consumer Price Index touched a high of 14.8% in March 1980»

«central banks may have to reassess their policies if higher prices become a concern»

«President Joe Biden has proposed additional measures to stimulate the U.S. economy, including a $1.7 trillion infrastructure spending plan»

«That would be pretty odd, raising interest rates at the same time we do this giant fiscal stimulus»

«Prices may also rise as companies adapt to the realities of climate change»

«If our solution is entirely just to get a green world, we’re going to have much higher inflation, because we do not have the technology to do all this, yet»

«Are we going to be willing to accept more inflation if inflation is to accelerate our green footprint?»

* * * * * * *

Difficile non condividere codeste parole.

Un ‘Big Shock’ è sempre più probabile e la maggior parte della gente sarà colta impreparata, incredula.

E l’intero sistema liberal socialista occidentale potrebbe implodere, come a suo tempo fece la Unione Sovietica.

*


BlackRock CEO Larry Fink Sees Potential for ‘Big Shock’ From Inflation

Investors today not used to prolonged inflation, Fink says

Policy makers must weigh inflation against climate concerns

*

BlackRock Inc. Chief Executive Officer Larry Fink said that investors may be underestimating the potential for a spike in inflation.

“Most people haven’t had a forty-plus year career, and they’ve only seen declining inflation over the last 30-plus years,” Fink said at a virtual event hosted by Deutsche Bank AG on Wednesday. “So this is going to be a pretty big shock.”

Concern about higher inflation has already seeped into U.S. markets with the cost of goods including lumber and steel rising this year. Fink began his career at First Boston Corp. in 1976, in a period of elevated inflation. The U.S. Consumer Price Index touched a high of 14.8% in March 1980.

Fink, who now runs the world’s biggest asset manager, added that central banks may have to reassess their policies if higher prices become a concern. The Federal Reserve has committed to keep rates near zero in the near term and has indicated it will tolerate inflation above its 2% target to make up for the period where it dipped below that level.

If the Fed were to reconsider that, it could seem discordant with separate fiscal stimulus, Fink said. President Joe Biden has proposed additional measures to stimulate the U.S. economy, including a $1.7 trillion infrastructure spending plan.

“That would be pretty odd, raising interest rates at the same time we do this giant fiscal stimulus,” Fink said.

Prices may also rise as companies adapt to the realities of climate change, he said. New York-based BlackRock has advocated for companies disclosing how they plan to adapt to a net zero greenhouse gas emissions economy by 2050.

“If our solution is entirely just to get a green world, we’re going to have much higher inflation, because we do not have the technology to do all this, yet,” Fink said. “That’s going to be a big policy issue going forward too: Are we going to be willing to accept more inflation if inflation is to accelerate our green footprint?”

Pubblicato in: Sistemi Economici, Stati Uniti

New York Fed. Prevede un Pil Q3 al +14.0%.

Giuseppe Sandro Mela.

2020-10-07.

2020-10-03__ Usa GDP 001

«Oct 02, 2020: New York Fed Staff Nowcast

–    The New York Fed Staff Nowcast stands at 14.0% for 2020:Q3 and 4.8% for 2020:Q4.

–    News from this week’s data releases decreased the nowcast for 2020:Q3 by 0.1 percentage point and decreased the nowcast for 2020:Q4 by 0.2 percentage point.

–    Negative surprises from ISM manufacturing survey and wholesale inventory data accounted for most of the decrease in 2020:Q3.

–    Negative surprises from ISM manufacturing survey and ADP employment data accounted for most of the decrease in 2020:Q4.»

*


«Notes: We start reporting the nowcast for a reference quarter about one month before the quarter begins; we stop updating it about one month after the quarter closes. Colored bars reflect the impact of each broad category of data on the nowcast; the impact of specific data releases is shown in the accompanying table.

Unlike in past quarters, we opted not to re-estimate the model parameters as usual on the first day of the new quarter, July 1, due to large outliers seen over the past months. The Nowcast estimates are thus based on the same parameters used during 2020:Q2, based on data through the end of 2020:Q1

Our forecasts for GDP growth from 2002:Q1 through 2015:Q4 are historical reconstructions. The values we report for these quarters represent predictions that our nowcasting model would have made in real time, using the data that were available to the public as of the dates noted. For more information, please read our accompanying Liberty Street Economics post, Just Released: Historical Reconstruction of the New York Fed Staff Nowcast, 2002-15

* * * * * * *


Sia la Fed di Atlanta sia quella di New York elaborano una previsione del pil sulla base dei loro propri modelli. Nulla quindi da stupirsi che le previsioni differiscano tra di loro, essendo differenti i postulati sui quali i modelli sono stati costruiti.

In sintesi, il pil americano nel terzo trimestre, Q3, dovrebbe risalire vigorosamente.

Pubblicato in: Sistemi Economici, Stati Uniti

USA. Molti analisti prevedrebbero un crash. – Bloomberg.

Giuseppe Sandro Mela.

2020-07-03.

Statua della Libertà

Come più volte abbiamo avuto modo di ripetere, siamo alieni dai facili ottimismi così come dai catastrofismi, corrente di pensiero cui appartiene questo ultimo editoriale di Bloomberg.

«The world is having serious doubts about the once widely accepted presumption of American exceptionalism»

«The era of the U.S. dollar’s “exorbitant privilege” as the world’s primary reserve currency is coming to an end»

«For almost 60 years, the world complained but did nothing about it. Those days are over.»

«The balance is shifting, and a crash in the dollar could well be in the offing.»

«The seeds of this problem were sown by a profound shortfall in domestic U.S. savings that was glaringly apparent before the pandemic»

«In the first quarter of 2020, net national saving, which includes depreciation-adjusted saving of households, businesses and the government sector, fell to 1.4% of national income»

«In order to attract foreign capital, the U.S. has run a deficit in its current account — which is the broadest measure of trade because it includes investment — every year since 1982»

«Covid-19, and the economic crisis it has triggered, is stretching this tension between saving and the current-account to the breaking point. The culprit: exploding government budget deficits»

«According to the bi-partisan Congressional Budget Office, the federal budget deficit is likely to soar to a peacetime record of 17.9% of gross domestic product in 2020 before hopefully receding to 9.8% in 2021.»

«Compared with the situation during the global financial crisis, when domestic saving was a net negative for the first time on record, averaging -1.8% of national income from the third quarter of 2008 to the second quarter of 2010, a much sharper drop into negative territory is now likely, possibly plunging into the unheard of -5% to -10% zone»

«For the moment, the greenback is strong, benefiting from typical safe-haven demand long evident during periods of crisis. Against a broad cross-section of U.S. trading partners, the dollar was up almost 7% over the January to April period in inflation-adjusted, trade-weighted terms to a level that stands fully 33% above its July 2011 low»

«The coming collapse in the dollar will have three key implication»

«It will be inflationary»

«Moreover, to the extent a weaker dollar is symptomatic of an exploding current-account deficit, look for a sharp widening of America’s trade deficit»

«Finally, in the face of Washington’s poorly timed wish for financial decoupling from China, who will fund the saving deficit of a nation that has finally lost its exorbitant privilege?»

* * * * * * * * * * *

Dal nostro sommesso punto di vista concordiamo con il fatto che al momento vi siano problemi di ardua soluzione ed una crisi che ridimensionerebbe molte ambizioni, ma di lì ad un crash del dollaro ce ne corre.

*


A Crash in the Dollar Is Coming.

The world is having serious doubts about the once widely accepted presumption of American exceptionalism.

The era of the U.S. dollar’s “exorbitant privilege” as the world’s primary reserve currency is coming to an end. Then French Finance Minister Valery Giscard d’Estaing coined that phrase in the 1960s largely out of frustration, bemoaning a U.S. that drew freely on the rest of the world to support its over-extended standard of living. For almost 60 years, the world complained but did nothing about it. Those days are over.

Already stressed by the impact of the Covid-19 pandemic, U.S. living standards are about to be squeezed as never before. At the same time, the world is having serious doubts about the once widely accepted presumption of American exceptionalism. Currencies set the equilibrium between these two forces — domestic economic fundamentals and foreign perceptions of a nation’s strength or weakness. The balance is shifting, and a crash in the dollar could well be in the offing.

The seeds of this problem were sown by a profound shortfall in domestic U.S. savings that was glaringly apparent before the pandemic. In the first quarter of 2020, net national saving, which includes depreciation-adjusted saving of households, businesses and the government sector, fell to 1.4% of national income. This was the lowest reading since late 2011 and one-fifth the average of 7% from 1960 to 2005.

Lacking in domestic saving, and wanting to invest and grow, the U.S. has taken great advantage of the dollar’s role as the world’s primary reserve currency and drawn heavily on surplus savings from abroad to square the circle. But not without a price. In order to attract foreign capital, the U.S. has run a deficit in its current account — which is the broadest measure of trade because it includes investment — every year since 1982.

Covid-19, and the economic crisis it has triggered, is stretching this tension between saving and the current-account to the breaking point. The culprit: exploding government budget deficits. According to the bi-partisan Congressional Budget Office, the federal budget deficit is likely to soar to a peacetime record of 17.9% of gross domestic product in 2020 before hopefully receding to 9.8% in 2021.

A significant portion of the fiscal support has initially been saved by fear-driven, unemployed U.S. workers. That tends to ameliorate some of the immediate pressures on overall national saving. However, monthly Treasury Department data show that the crisis-related expansion of the federal deficit has far outstripped the fear-driven surge in personal saving, with the April deficit 5.7 times the shortfall in the first quarter, or fully 50% larger than the April increment of personal saving.   

In other words, intense downward pressure is now building on already sharply depressed domestic saving. Compared with the situation during the global financial crisis, when domestic saving was a net negative for the first time on record, averaging -1.8% of national income from the third quarter of 2008 to the second quarter of 2010, a much sharper drop into negative territory is now likely, possibly plunging into the unheard of -5% to -10% zone.             

And that is where the dollar will come into play. For the moment, the greenback is strong, benefiting from typical safe-haven demand long evident during periods of crisis. Against a broad cross-section of U.S. trading partners, the dollar was up almost 7% over the January to April period in inflation-adjusted, trade-weighted terms to a level that stands fully 33% above its July 2011 low, Bank for International Settlements data show. (Preliminary data hint at a fractional slippage in early June.)

But the coming collapse in saving points to a sharp widening of the current-account deficit, likely taking it well beyond the prior record of -6.3% of GDP that it reached in late 2005. Reserve currency or not, the dollar will not be spared under these circumstances. The key question is what will spark the decline?

Look no further than the Trump administration. Protectionist trade policies, withdrawal from the architectural pillars of globalization such as the Paris Agreement on Climate, Trans-Pacific Partnership, World Health Organization and traditional Atlantic alliances, gross mismanagement of Covid-19 response, together with wrenching social turmoil not seen since the late 1960s, are all painfully visible manifestations of America’s sharply diminished global leadership. 

As the economic crisis starts to stabilize, hopefully later this year or in early 2021, that realization should hit home just as domestic saving plunges. The dollar could easily test its July 2011 lows, weakening by as much as 35% in broad trade-weighted, inflation-adjusted terms.

The coming collapse in the dollar will have three key implications:  It will be inflationary — a welcome short-term buffer against deflation but, in conjunction with what is likely to be a weak post-Covid economic recovery, yet another reason to worry about an onset of stagflation — the tough combination of weak economic growth and rising inflation that wreaks havoc on financial markets.

Moreover, to the extent a weaker dollar is symptomatic of an exploding current-account deficit, look for a sharp widening of America’s trade deficit.   Protectionist pressures on the largest piece of the country’s multilateral shortfall with 102 nations – namely the Chinese bilateral imbalance — will backfire and divert trade to other, higher-cost, producers,  effectively taxing beleaguered U.S. consumers.

Finally, in the face of Washington’s poorly timed wish for financial decoupling from China, who will fund the saving deficit of a nation that has finally lost its exorbitant privilege? And what terms — namely interest rates — will that funding now require?

Like Covid-19 and racial turmoil, the fall of the almighty dollar will cast global economic leadership of a saving-short U.S. economy in a very harsh light. Exorbitant privilege needs to be earned, not taken for granted.

Pubblicato in: Devoluzione socialismo, Sistemi Economici

Merkel. Parole inusitatamente dure.

Giuseppe Sandro Mela.

2020-06-26.

Merkel 999

Frau Merkel solitamente utilizza un fraseggio cauto e morigerato, abbastanza diplomatico.

Questa volta invece si è concessa parole davvero molto dure.

«German Chancellor Angela Merkel warned her fellow leaders that the European Union is facing its deepest recession since World War II and that will lead to very, very difficult times indeed»

«She wondered whether people have understood exactly what this means and cautioned that the EU has every interest in having a recovery plan in place by the end of the summer ahead of events like the U.S. election in the fall»

* * * * * * *

Europa. Aprile. Commerci Internazionali. Intra-EA -32.2% anno su anno.

Germania. Giugno. Cupe previsioni. Indice ZEW -83.1%.

Germania. Merkel. Una personalità sdoppiata. Si scaglia contro la Cina e poi la supplica.

Germania. Aprile. Export. Verso Eurozone -36.7%, verso UK -42.1%.

Germania. Q1. Turnover del Settore Servizi. – Destatis.

Eurozona. Produzione Industriale. -28% anno su anno, -17.1% mese

Germania. Aprile. Produzione Industriale -25.3% YoY, -17.9% MoM.

Germania. Industria chiede sussidi per le auto a combustione.

* * * * * * *

I macrodati del secondo trimestre per Europa e Germania dovrebbero essere anche ben peggiori.

Ma la severità della crisi risiede nella struttura e nella componente ideologica del sistema politico europeo. Infatti gli Stati Uniti hanno iniziali segni di buona ripresa, così come la Cina. E le imprese europee stanno fuggendo in Cina.

Si concorda pienamente con Frau Merkel: ci si aspetti un periodo oltremodo difficile.

*


Merkel Tells Leaders EU Facing Very, Very Difficult Times.

German Chancellor Angela Merkel warned her fellow leaders that the European Union is facing its deepest recession since World War II and that will lead to very, very difficult times indeed, according to officials familiar with her comments.

She wondered whether people have understood exactly what this means and cautioned that the EU has every interest in having a recovery plan in place by the end of the summer ahead of events like the U.S. election in the fall, one of the officials said.

She said that the leaders need to meet in person as soon as possible.

Pubblicato in: Medicina e Biologia, Sistemi Economici, Stati Uniti

USA. Odontoiatri. Fedeli indicatori della crisi. Il 77% ha ripreso il lavoro.

Giuseppe Sandro Mela.

2020-06-21.

Dentista 013

«We’re not really recovered until all the dentists are back to work»

«Dentist offices tend to be stable businesses that stick around for decades, unlike restaurants that open and close frequently.»

«Dentists earn a healthy salary — a median of $159,000 — and offer services with no clear substitute. If you need your teeth cleaned or a cavity filled, the dentist is the only option.»

«This makes them, in the eyes of some economists, the perfect barometer for gauging the country’s recovery from the shock of the pandemic»

«The dental industry has weathered an exaggerated version of the pandemic’s economic impact, experiencing both a steeper decline and a faster recovery than other sectors»

«Half of all dental workers lost their jobs in March and April as states closed businesses to slow the virus’s spread»

«The industry accounted for a staggering 35 percent of all health care jobs lost in those months, even though its workers make up just 6 percent of the industry, according to analysis of federal data by the nonprofit Altarum Institute.»

«The dental industry halted much of its work on March 16, when the Centers for Disease Control and Prevention and the American Dental Association issued joint guidance against elective care»

«By mid-April, 45 percent of dentists had laid off their entire staffs …. Only 13 percent remained fully open, with the remaining offices keeping a skeleton staff»

«Patient visits fell to 7 percent of normal rates.»

«By early May, 33 percent of dental offices had hired their full staffs back. The number rose to 58 percent by mid-May and, most recently, hit 77 percent the first week of June.»

«The dental industry gained a quarter-million jobs in May, accounting for a full 10 percent of the net jobs added across the American economy.»

«An estimated 37 percent of dental offices received funding through the Paycheck Protection Program, meant to help small businesses keep workers on payroll»

«Even after last month’s job gains, the dental industry still has 289,000 fewer workers than it did before the pandemic»

* * * * * * *

Era talmente ricco da potersi permettere la dentiera.

Il volume di affari dei tecnici odontoiatri e dei dentisti in rapporto alla popolazione costituisce un indice indiretto ma efficace sul reale livello di ricchezza di una nazione.

Tranne casi rari, i vari servizi sanitari non coprono le spese odontoiatriche, ma la sola gestione di uno studio richiede spese non indifferenti, che alla fine si riversano sui pazienti. Né ci si può dimenticare del socio di maggioranza: per il fisco un dentista lavorerebbe trentasei ore al giorno a costi nulli e con onorari da capogiro.

La crisi da coronavirus ha associato la necessità del lockdown a quella economica: sarebbe impossibile andare dal dentista tenendo la mascherina e senza disporre del liquido necessario.

Se all’inizio della pandemia gli odontoiatri hanno subito un severissimo calo del giro lavorativo, la ripresa è stata altrettanto rapida, ed alla prima settimana di giugno il 77% degli studi odontoiatrici aveva già ripreso il lavoro.

Questa ripresa ha comportato la generazione di 250,000 posti di lavoro: ne mancano ancora 289,000 per tornare alla norma, ma la via sembrerebbe essere stata delineata, anche se non tutto gli studi hanno ripreso l’usuale giro di clientela. Sono dati che darebbero ben da sperare.

*


The New York Times. How’s the Economy Doing? Watch the Dentists.

A crucial indicator of whether Americans feel safe returning to normal activities.

If not for coronavirus, you’d expect your local dentist office to be doing just fine.

Dentist offices tend to be stable businesses that stick around for decades, unlike restaurants that open and close frequently. Dentists earn a healthy salary — a median of $159,000 — and offer services with no clear substitute. If you need your teeth cleaned or a cavity filled, the dentist is the only option.

This makes them, in the eyes of some economists, the perfect barometer for gauging the country’s recovery from the shock of the pandemic.

“If you look at your typical dentist office, nothing went wrong with their business model,” said Betsey Stevenson, an economics professor at the University of Michigan. “It’s just coronavirus that happened.”

The dental industry has weathered an exaggerated version of the pandemic’s economic impact, experiencing both a steeper decline and a faster recovery than other sectors. Half of all dental workers lost their jobs in March and April as states closed businesses to slow the virus’s spread. The industry accounted for a staggering 35 percent of all health care jobs lost in those months, even though its workers make up just 6 percent of the industry, according to analysis of federal data by the nonprofit Altarum Institute.

How long it takes those jobs to come back entirely will be a crucial indicator of whether Americans feel safe returning to normal activities, and if they have the economic means to do so.

“I’m obsessed with dentists because, if the only thing we’re doing is putting the economy on pause, and then going back to normal, all of them should be coming back,” Ms. Stevenson said. “We’re not really recovered until all the dentists are back to work.”

The dental industry halted much of its work on March 16, when the Centers for Disease Control and Prevention and the American Dental Association issued joint guidance against elective care. Some dentists say they closed even earlier as protective equipment became in short supply.

By mid-April, 45 percent of dentists had laid off their entire staffs, according to data collected by the dental association. Only 13 percent remained fully open, with the remaining offices keeping a skeleton staff. Patient visits fell to 7 percent of normal rates.

Marko Vujicic, the chief economist at the dental association, expected a slow return of workers into dentist offices. But regular surveys, sent out to 12,000 dental practices every two weeks, showed a relatively fast recovery.

“My initial predictions were we’d have an elevator ride down and an escalator ride up,” he said. “But we’re actually seeing a pretty sharp acceleration of the jobs coming back.”

By early May, 33 percent of dental offices had hired their full staffs back. The number rose to 58 percent by mid-May and, most recently, hit 77 percent the first week of June.

New federal data released last week tells a similar story. The dental industry gained a quarter-million jobs in May, accounting for a full 10 percent of the net jobs added across the American economy.

Federal stimulus programs may have played a key role in bringing dentists back to work. An estimated 37 percent of dental offices received funding through the Paycheck Protection Program, meant to help small businesses keep workers on payroll. Dentist practices that participated in the program were more likely to remain open than those that didn’t.

As dentists head back to work, it’s unclear whether patients will follow. While most states have given dentist offices the go-ahead to reopen, patient volumes remain half of what they were before the pandemic.

That suggests it isn’t just stay-at-home orders that have caused patients to cancel appointments. Some may have lost the dental insurance they used to get at work. Others may fear contracting the virus; they may feel safer putting off preventive care that has already waited months. Or they may question the value of regular cleanings altogether.

Dentists understand why coming into their offices — even with the extra protective equipment they’ve invested in — may not be an appealing proposition.

“You have to have someone right in your face,” said Jason Bastida, who practices primarily in Elmhurst, a neighborhood in Queens that was hard hit by coronavirus. “I get to wear an N95 mask, but you have to make yourself vulnerable by taking your mask off.”

He returned to work last week and has about a quarter of his regular patient volume. He graduated from dental school in 2017, and worries about how he’ll pay off his $330,000 in outstanding student debt if his caseload doesn’t pick up soon.

Even after last month’s job gains, the dental industry still has 289,000 fewer workers than it did before the pandemic. That suggests to Ms. Stevenson, the economist, that the industry — and the rest of the American economy — is far from recovered.

“The fact that dentistry employment is down 30 percent tells us that there is income loss, and there is fear,” she said. “We might not see employment in a retail store get back to the levels it had last year. But we should see dental employment get all the way back to where it was.”

Employment in the dental industry — and the rest of the economy — is likely to remain constrained by other areas of the economy that don’t reopen as quickly. This is especially true for day cares and schools, many of which will not reopen full time in the fall.

Abi Adeyeye, a 31-year-old pediatric dentist in Plano, Tex., was among those who returned to work in May. Over the past five weeks, she has been excited to see patient volume rebound to pre-coronavirus levels.

“Before coronavirus, I had a cancellation rate around 30 percent,” she said. “Now nobody cancels. It seems like people are wanting to get out of the house and need something to do.”

Even with a full patient schedule, her office is not at full employment. She used to have six dental assistants, but only four have come back to work. One was pregnant, and one couldn’t secure child care.

The work of dentistry, at the same time, has only become more challenging. Dr. Adeyeye now wears an N95 respirator mask, a surgical mask, a face shield and a surgical cap.

“The first two weeks I had these massive migraines,” she said. “Not only am I hot, I also can’t breathe.” She’s slowly adjusting to the new dentistry: “My headaches have gone down to once a week.”

Pubblicato in: Commercio, Devoluzione socialismo, Sistemi Economici

Crisi Economica. Gran quota dei disoccupati potrebbe restarlo per lungo tempo.

Giuseppe Sandro Mela.

2020-06-20.

Giulio Romano. Mantova. Palazzo Te. Caduta dei Giganti. 002 Particolare

«One third of U.S. job losses at risk of turning permanent»


Il problema è purtroppo molto semplice da enunciarsi ed altrettanto difficile da risolversi.

A livello mondiale la pandemia da coronavirus ha generato la necessità di stretti lockdown, da cui blocco delle attività e licenziamenti. Quando anche una ripresa inizi a far sentire i propri benefici effetti, molto verosimilmente potrebbe essere mutata la struttura organizzativa sia della produzione sia dei servizi, inducendo una mutazione delle tipologie di lavoro offerto. Molti degli attuali disoccupati potrebbero correre il serio rischio di non riuscire più ad integrasi nel nuovo mondo del lavoro. Problema questo che sembrerebbe prospettarsi con severità crescente al crescere dell’età del disoccupato.

* * * * * * *

«the heart of the dilemma facing the world economy as it gradually emerges from the virus-enforced lockdown and unprecedented recession»

«How many of the millions of lost jobs are gone for good?»

«The hope is the waves of stimulus doled out by governments and central banks should eventually buoy economies and spark a revival in hiring. Furloughed or redundant workers would then return to their employers»

«The risk though is that the pandemic is inflicting a “reallocation shock” in which firms and even entire sectors suffer lasting damage …. That would force workers to retrain or relocate, both of which are hard»

«There will be well into the millions of people who don’t get to go back to their old job, …. In fact, there may not be a job in that industry for them for some time. [Powell]»

«Unfortunately, new research by Bloomberg Economics reckons 30% of U.S. job losses from February to May are the result of a reallocation shock»

«the labor market will initially recover swiftly, but then level off with millions still unemployed.»

«Workers in the hospitality industry are among the most at risk, alongside retail, leisure, education and health»

«Research published in May by the Becker Friedman Institute at the University of Chicago estimated 42% of recent layoffs in the U.S. will be permanent.»

«It found that about 50% of U.S. job losses come from the combination of lockdown and weak demand, 30% from the reallocation shock, and 20% from high unemployment benefits encouraging workers to stay home»

«A major worry is that as temporary job losses become permanent, skills are lost and higher unemployment becomes entrenched — a concept economists refer to as hysteresis»

«The pandemic has exposed the fault lines that already existed for working people and the economy»

* * * * * * * * * * *

Ancora una volta purtroppo, la crisi da coronavirus ha slatentizzato le contraddizioni interne dei sistemi economici occidentali, solo che lo ha fatto in modo repentino e brutale.

In un sistema economico ‘sano’, dovrebbe esserci un equilibrio tra produzione e servizi. Questi, che per definizioni avrebbero dovuto essere da supporto e coordinamento della produzione, sono diventati un’enclave a sé stante. Ma senza una efficiente produzione i servizi diventano improvvisamente inutili, e quelli che vivevano per sé stessi sono destinati alla estinzione. In tempi di crisi i servizi voluttuari sono i primi a scomparire.

Similmente, la finanza dovrebbe essere di aiuto e sostegno alla produzione, in un delicato equilibrio. Ma negli ultimi decenni è diventata un fenomeno a sé stante, che assomiglia sempre più ad un colossale gioco del monopoli. Ma la finanza scorrelata dalla produzione alla fine finisce con una bolla.

Da ultimo, ma non certo per ultimo, si vorrebbe rimarcare una frase.

«20% from high unemployment benefits encouraging workers to stay home».

La natura degli esseri umani dovrebbe sempre essere tenuta in considerazione, così come le loro debolezze.

Se è corretto che la Collettività si faccia carico di quanti abbiano perso il lavoro, altrettanto corretto sarebbe limitare questo intervento sia nel suo ammontare sia nella sua durata. Per esempio, in molte nazioni il sussidio di disoccupazione copre il 70% circa dello stipendio prima percepito, beneficio che si perde alla seconda volta che si rifiutasse una dignitosa offerta di lavoro.

*


Bloomberg. Millions of Job Losses Are at Risk of Becoming Permanent.

– One third of U.S. job losses at risk of turning permanent

– Bloomberg Economics sees huge reallocation hit to labor market

*

Twenty-year-old William Lovely used to work at Jason’s Deli in Virginia Beach, delivering catering orders to surrounding businesses. Now, thanks to the coronavirus, he’s struggling to pay his bills.

Laid off in March, he’s gone from regular hours and pay to gigging for UberEats or Instacart, earning up to $100 on some days but often coming home with almost nothing. While the restaurant is trying to slowly reopen, Lovely reckons the best he can hope for is a part-time position, requiring him to keep his second job if he’s going to meet his expenses.

“My job stopped, but the bills don’t,” he said.

Lovely’s experience goes to the heart of the dilemma facing the world economy as it gradually emerges from the virus-enforced lockdown and unprecedented recession: How many of the millions of lost jobs are gone for good?

The hope is the waves of stimulus doled out by governments and central banks should eventually buoy economies and spark a revival in hiring. Furloughed or redundant workers would then return to their employers.

The risk though is that the pandemic is inflicting a “reallocation shock” in which firms and even entire sectors suffer lasting damage. Lost jobs don’t come back and unemployment stays elevated. That would force workers to retrain or relocate, both of which are hard, and governments to do more than just try to spend their way out of trouble.

It was a theme hit upon last week by Federal Reserve Chairman Jerome Powell as U.S. central bankers forecast leaving interest rates near zero until 2022 in part because of a surge in unemployment to the highest level since the Great Depression.

There will be “well into the millions of people who don’t get to go back to their old job,” said Powell, who will testify to Congress on the economic outlook this week. “In fact, there may not be a job in that industry for them for some time.”

Unfortunately, new research by Bloomberg Economics reckons 30% of U.S. job losses from February to May are the result of a reallocation shock. The analysis — based on the relationship between hiring, firing, openings and unemployment — suggests the labor market will initially recover swiftly, but then level off with millions still unemployed.

Workers in the hospitality industry — like Lovely’s — are among the most at risk, alongside retail, leisure, education and health. In many cases, the pandemic will increase the challenge for bricks and mortar companies facing off against e-commerce platforms such as Amazon.com. Inc, accelerating the pre-crisis trend.

Financial markets are already pricing in the risk, according to the Bloomberg economists. Equity market returns across different sectors and for companies of varying sizes suggests investors are betting on a shift in profits between firms similar to that witnessed after the global financial crisis of 2008. Lost profits spells lost jobs.

Other studies carry similar warnings. Research published in May by the Becker Friedman Institute at the University of Chicago estimated 42% of recent layoffs in the U.S. will be permanent.

“There’s a massive reallocation shock,” said Nicholas Bloom, professor of economics at Stanford University and one of the authors of the study. The recession “hits different sectors differently. Some benefit and some fall.”

The phenomenon puts governments under pressure to craft policies which help viable firms to survive and workers navigate to different jobs, but which ideally don’t prop up companies that are no longer sustainable and just drain resources.

The Peterson Institute for International Economics said in a study last week that the unique shock of the virus means governments may need to do more to preserve businesses and protect workers than they would in a normal recession.

They recommend wage subsidies to create incentives to resume production, and continued credit guarantees for new loans.

The Bloomberg Economics research highlights the challenge. It found that about 50% of U.S. job losses come from the combination of lockdown and weak demand, 30% from the reallocation shock, and 20% from high unemployment benefits encouraging workers to stay home. Different reasons for job losses call for different, and sometime conflicting, policy responses.

A major worry is that as temporary job losses become permanent, skills are lost and higher unemployment becomes entrenched — a concept economists refer to as hysteresis.

Amid that backdrop, labor market experts says measures shouldn’t stop at improving safety nets, but must also ensure people have the right skills. The Organization for Economic Cooperation and Development last week called for public investment in training for those laid off.

Part of that is about getting workers ready for the next phase of the technology revolution and any upheaval that comes with it.

That process could now accelerate as companies from manufacturers to retailers adapt to a post-virus world, cutting off even more people from secure work.

The potential for structural shifts has also given rise to ideas that might have once seemed non-starters — from job guarantees to universal income.

In the U.S., an employer-of-last-resort idea won support among some Democrats earlier in the primary election cycle. Economists who’ve worked on versions of the plan, including Darrick Hamilton at the University of Ohio, sought to revive it during the coronavirus slump, citing the example of federal employment programs during the New Deal in the 1930s.

“The pandemic has exposed the fault lines that already existed for working people and the economy,” said Sharan Burrow, General Secretary of the International Trade Union Confederation. “The ‘new normal’ requires a new social contract between governments and their citizens with the backing of the international community.”

Pubblicato in: Economia e Produzione Industriale, Sistemi Economici, Stati Uniti

USA. Richieste disoccupazione iniziale 1.508 mln, continua 20.544 mln.

Giuseppe Sandro Mela.

2020-06-18.

2020-06-18__USA 001

A maggio il numero di buste paga del settore non agricolo era aumentato di 2.509 milioni, contro una contrazione ad aprile di -20.5 milioni.

«L’indice Nonfarm Payrolls (salariati del settore non agricolo) misura la variazione nel numero di salariati nel corso dell’ultimo mese per tutte le attività non agricole. Il totale dei salariati del settore non agricolo rappresenta circa l’80% dei lavoratori che producono il Prodotto Interno Lordo negli Stati Uniti.»

Sempre a maggio, lo ISM Manufacturing Employment era salito dal pregresso valore mensile di 27.5 agli attuali 32.1.

«The Institute of Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) Report on Business is based on data compiled from monthly replies to questions asked of purchasing and supply executives in over 400 industrial companies. For each of the indicators measured (New Orders, Backlog of Orders, New Export Orders, Imports, Production, Supplier Deliveries, Inventories, Customers Inventories, Employment, and Prices), this report shows the percentage reporting each response, the net difference between the number of responses in the positive economic direction and the negative economic direction and the diffusion index. Responses are raw data and are never changed»

*

Il numero delle richieste iniziali di sussidi di disoccupazione è sceso a 1.508 milioni, contro un valore pregresso di 1.566 milioni. Il dato è in continua discesa dalla rilevazione del 2 aprile, che indicava 6.648 milioni di nuove richieste.

Il numero attuale di richieste di disoccupazione continua è 20.544 milioni, contro il picco massimo di 25.043 miliono registrato il 25 maggio.

A maggio il tasso di disoccupazione era 13.3%, contro il precedente di 14.7%, essendo il valore previsto dagli economisti 19.7%.

*

Usa. Disoccupazione.

Usa. Maggio. Vendite al Dettaglio. +14.7% mese su mese.

USA. Disoccupazione. +Pua Program 29.5 mln, continua 20.9 mln, iniziale 1.542 mln.

USA. Maggio. Occupati salgono di 2.5 milioni. Disoccupati scesi al 13.3%.

USA. Disoccupazione Continua 21.052 mln, Richieste Iniziali 2.123 mln.

Pubblicato in: Banche Centrali, Geopolitica Mondiale, Sistemi Economici

Crisi. Quella vera arriverà a settembre, con o senza Covid-19.

Giuseppe Sandro Mela.

2020-06-18.

bomba_atomica_

La situazione economica europea ed Italiana sono particolarmente gravi.

L’epidemia da coronavirus ha solo slatentizzato i problemi in essere: debiti pubblici non sostenibili e strutture politiche e sociali obsolete. La pandemia ha solo funzionato da trigger.

A fine estate ci si aspetti un franamento del sistema.

Inter alias, il gettito fiscale franerà drasticamente. Ci si pensi bene a cosa questo vuol dire. Chi mai farà credito a quanti stiano per fallire?

* * * * * * *

Governo. Gettata la maschera. ‘I fondi Ue non sono mai gratuiti’.

Eurozona. Produzione Industriale. -28% anno su anno, -17.1% mese su mese.

Mef. Primo quadrimestre. Gettito fiscale aprile -22.1%.

Italia. I dati della catastrofe economica. E siamo solo agli inizi.

* * * * * * *

«La vera e propria crisi post-coronavirus inizierà a settembre, ed esploderà anche senza una nuova ondata di contagi»

«Fino ad oggi gli analisti hanno formulato funeste previsioni sul futuro dell’Italia e del mondo, partendo dall’ipotesi di una nuova ondata di contagi»

«Si pensi soltanto all’OCSE, secondo cui il PIL tricolore crollerà del 14% nello scenario peggiore»

«il settore finanziario non ha ben compreso la portata dello shock e delle sue implicazioni di lungo termine, soprattutto sull’economia reale. Per dirla con le sue stesse parole, la crisi finanziaria sarebbe scoppiata anche senza coronavirus»

«Già prima della pandemia, l’economia mondiale si era mostrata particolarmente vulnerabile sia al debito che alla leva finanziaria speculativa»

«si continua a negare l’evidenza di un modello finanziario ed economico che funziona solo con eccesso di leva, compressione dei redditi, ampio debito speculativo e pochi investimenti nell’economia reale, un modello che non è sostenibile»

«la forza di un’economia non dipende dalla quantità del debito che riesce a produrre, ma dalla sua qualità e dal modo in cui esso viene utilizzato per favorire un miglioramento dei redditi reali»

«I mercati si sono affidati in maniera evidente alle banche centrali e si sono sentiti così sicuri da compiere “eccessi speculativi destabilizzanti”»

«La liquidità però non è la soluzione a tutto»

«Essa potrebbe essere infinita ma non è detto che chi ne dispone la indirizzerà sempre verso chi ne ha bisogno se chi ne ha bisogno non è in grado di restituirla»

«Negli ultimi due mesi (e nonostante il ruolo della Federal Reserve) negli Stati Uniti sono fallite 1.600 aziende al giorno e il credito al consumo per consumatore è crollato»

«la vostra liquidità è molto maggiore di quella della Fed e in realtà non è la liquidità della Fed che sostiene il sistema ma la vostra»

«il credito speculativo è esploso consentendo l’emissione di circa 19 mila miliardi di dollari di obbligazioni da parte di emittenti che, con i loro ricavi, non riuscivano neppure a pagare gli interessi passivi sul debito emesso neanche in una fase di espansione dell’economia»

«Se ora molte di queste emissioni faranno default, non si potrà certo attribuire la colpa a un virus, ma piuttosto a un sistema totalmente fuori controllo»

«Difendere a oltranza un modello di crescita che non produce più ricchezza (se non per pochi) ma solo debiti (per molti) sarà probabilmente l’errore fatale»

* * * * * * *

Gli stati occidentali sono oberati da debiti pubblici e privati non sostenibili: il sistema è destinato ad implodere.

Questa enorme massa di liquidità deve essere bruciata in una qualche maniera: dal default ad una inflazione a tre zeri.

Lasciamo al Lettore il rappresentarsi cosa poi potrebbe succedere con un ritorno del Covid-19.

*


La vera crisi esploderà dopo l’estate, a prescindere dal coronavirus.

La vera e propria crisi post-coronavirus inizierà a settembre, ed esploderà anche senza una nuova ondata di contagi. L’analisi.

Fino ad oggi gli analisti hanno formulato funeste previsioni sul futuro dell’Italia e del mondo, partendo dall’ipotesi di una nuova ondata di contagi.

Si pensi soltanto all’OCSE, secondo cui il PIL tricolore crollerà del 14% nello scenario peggiore.

In un articolo comparso su Milano Finanza, però, il portfolio manager di Lemanik Maurizio Novelli ha definito inutile ipotizzare le conseguenze di una seconda ondata di contagi (già in parte scontate) e ha preferito analizzare cosa potrebbe accadere in uno scenario COVID-free.

Crisi esploderà a settembre: l’analisi

Secondo l’esperto, il settore finanziario non ha ben compreso la portata dello shock e delle sue implicazioni di lungo termine, soprattutto sull’economia reale. Per dirla con le sue stesse parole, la crisi finanziaria sarebbe scoppiata anche senza coronavirus.

Già prima della pandemia, l’economia mondiale si era mostrata particolarmente vulnerabile sia al debito che alla leva finanziaria speculativa. Lo shock da COVID-19 ha soltanto messo in luce problemi già evidenti:

    “Se si continua ad insistere nell’attribuire a un virus, e cioè a un fattore esterno, il motivo della crisi che ci attende, si continua a negare l’evidenza di un modello finanziario ed economico che funziona solo con eccesso di leva, compressione dei redditi, ampio debito speculativo e pochi investimenti nell’economia reale, un modello che non è sostenibile,”

ha dichiarato Novelli, secondo cui la forza di un’economia non dipende dalla quantità del debito che riesce a produrre, ma dalla sua qualità e dal modo in cui esso viene utilizzato per favorire un miglioramento dei redditi reali.

Il vero problema, ha continuato, non è se la crisi arriverà, ma come le economie (e dunque il sistema) saranno in grado di reggere l’urto in tempi brevi. Tempistiche troppo ampie aumentano infatti rischi di implosione e instabilità di lungo termine.

Il ruolo delle banche centrali

I mercati si sono affidati in maniera evidente alle banche centrali e si sono sentiti così sicuri da compiere “eccessi speculativi destabilizzanti”. La liquidità però non è la soluzione a tutto. Essa potrebbe essere infinita ma non è detto che chi ne dispone la indirizzerà sempre verso chi ne ha bisogno se chi ne ha bisogno non è in grado di restituirla. “Chi di voi presterebbe soldi a chi è a rischio di fallire?”

Fondamentale in tal senso la propensione al rischio del sistema creditizio (banche, investitori ecc..) attualmente messa con le spalle al muro dall’emergenza. Se la liquidità generata dal Quantitative Easing della BCE non si trasformerà in credito, ha previsto l’esperto, il sistema dovrà fare i conti con un credit crunch.

    “La crisi non finisce dunque con la fine del lockdown ma inizia quando cominciano a manifestarsi gli eventi di credito (i fallimenti) e quindi comincia adesso. Gli eventi di credito infatti incidono sulla propensione al rischio di chi dovrebbe dare credito al sistema. In media le recessioni negli Stati Uniti durano circa 13 mesi, ma nel 2008 sono stati 18, e potrebbero essere 13/18 mesi lunghissimi per il potenziale squilibrio tra liquidità e solvibilità”.

Negli ultimi due mesi (e nonostante il ruolo della Federal Reserve) negli Stati Uniti sono fallite 1.600 aziende al giorno e il credito al consumo per consumatore è crollato. Per Novelli, che ha calcato sulla differenza fra liquidità e solvibilità, i default continueranno a salire nonostante i sussidi alla disoccupazione erogati, cosa che a sua volta potrebbe generare una crisi di solvibilità delle aziende.

Ma allora a cosa serve la liquidità delle banche centrali se non riesce a prevenire i fallimenti? Secondo il portfolio manager di Lemanik esisterebbe un meccanismo psicologico mirato a tenere i soldi nel sistema, facendo credere agli investitori che liquidità e solvibilità siano la stessa cosa.

    “Questo meccanismo psicologico induce a non vendere e in questo modo sono gli stessi investitori che, mantenendo la loro liquidità investita, sostengono un sistema che diversamente andrebbe in default in un colpo solo. In pratica la strategia consiste nel cercare di mantenere il più possibile tutti investiti, perché la vostra liquidità è molto maggiore di quella della Fed e in realtà non è la liquidità della Fed che sostiene il sistema ma la vostra”.

Sistema fuori controllo

Dal 2008 in poi le grandi banche centrali mondiali hanno reso i portfolio manager dei “meri cacciatori di rendimento” che hanno iniziato ad investire su asset a elevati yield, sicuri della protezioni degli istituti.

La propensione al rischio del sistema è aumentata e il credito speculativo è esploso:

    “consentendo l’emissione di circa 19 mila miliardi di dollari di obbligazioni da parte di emittenti che, con i loro ricavi, non riuscivano neppure a pagare gli interessi passivi sul debito emesso neanche in una fase di espansione dell’economia. Se ora molte di queste emissioni faranno default, non si potrà certo attribuire la colpa a un virus, ma piuttosto a un sistema totalmente fuori controllo.”

Le banche centrali hanno iniziato a comprare corporate bonds, High Yields e via dicendo per salvare il sistema, trascurando le conseguenze di lungo termine di queste azioni, ha dichiarato Novelli, che ha messo a paragone la crisi attuale con quella del 1929.

Al centro della sua analisi quello che ha definito come un modello basato sui profitti generati dall’eccesso di leva e da una finanza fuori controllo, un modello fallimentare che ha prodotto una nazionalizzazione del sistema a causa della speculazione, come nel ’29.

I mercati hanno dato per scontato un recupero facile, ma per Novelli non sarà così: la ripresa si rivelerà lenta, ma soprattutto deludente e non sarà sufficiente stampare nuova moneta per aggiustare le cose.

    “Difendere a oltranza un modello di crescita che non produce più ricchezza (se non per pochi) ma solo debiti (per molti) sarà probabilmente l’errore fatale”.

Pubblicato in: Cina, Sistemi Economici

Cina. Ripresa. Maggio. Produzione Industriale +4.4% YoY, Vendite Dettaglio -2.8%.

Giuseppe Sandro Mela.

2020-06-15.

2020-06-15__ Cina produzione Industriale 013

Il National Bureau of Statistics of China ha rilasciato i dati relativi alla

– Produzione Industriale annualizzata +4.4% e

– Vendite al Dettaglio annualizzate -2.8%.

2020-06-15__ Cina Vendite al dettaglio 014

* * * * * * *

I macrodati cinesi confermano una ripresa molto più consistente di quanto non si fosse potuto pensare.

Nonostante il lockdown, la produzione industriale ha ripreso a crescere anno su anno: ha ammortizzato le perdite subite durante il periodo di crisi pandemica. Le vendite al dettaglio sono risalite dal -20.5% di febbraio, al -15.8% di marzo, al -7.5% di aprile per arrivare al -2.8% del mese di maggio.

* * * * * * *

Cina. I grandi Atenei inglesi stanno trasferendosi in Cina.

Cina. Maggio. Export -3.3% anno su anno, Import -16.7%.

Cina mon amour. Maggio. Ford aumenta le vendite in Cina +32%.

Cina. Maxipetroliere in rada in attesa di scaricare. La ripresa corre veloce.

Cina. Maggio. Vendite automobili +11.7% anno su anno.

Cina mon amour. Maggio. Prada +10%.

Cina, ripresa della produzione con una domanda mondiale depressa.

Cina. Anche Volkswagen vi programma grandi investimenti.

Cina e Red Bull Gmbh. Un mercato impossibile da trascurare.

Commerci Mondiali. Marzo. -1.4% mese su mese. Bene Cina ed India.

China Express Air compra 100 aeromobili della Comac.

* * * * * * *

Questi dati dovrebbero indurre a ragionarci sopra.

La pandemia ed il lockdown  sono accaduti sia nei paesi occidentalizzati sia in Cina.

Ma mentre America e blocco europeo hanno macrodati da mettersi a piangere, la Cina si sta riprendendo molto velocemente.

La differenza consiste quindi nel come sia strutturata la gestione politica degli stati e l’organizzazione dei loro sistemi economici.

Constatiamo come in occidente il mondo politico e sociale si sia concentrato su problemi ideologici, vissuti con dimostrazioni di piazza di rara violenza e criminalizzazione delle forze dell’ordine chiamate a sedarle. Per non parlare poi dei vergognosi abbattimenti ed imbrattamenti di statue dei grandi del nostro passato da parte di persone insignificanti ma aggressive.

A nostro sommesso avviso, questo sembrerebbe essere un metodo non idoneo per affrontare la crisi economica.

Pubblicato in: India, Sistemi Economici

India. Consumi elettrici. Aprile -24%, maggio -14.3%.

Giuseppe Sandro Mela.

2020-06-06.

India 013

India. Aprile. Consumi elettrici -24%.

Arun. Centrale idroelettrica condivisa tra India e Nepal.

India. Modi. Una rivoluzione nella politica economica. ‘Self-reliant India’.

India. Tra cinque anni sorpasserà Germania e Regno Unito.

«Overall electricity generation fell 14.3% in May, a Reuters analysis of provisional government data showed, compared with a decline of 24% in April »

«Despite higher consumption by residential consumers, power use was lower as many industries and commercial establishments – which account for over half of India’s annual consumption – were shut or not operating at full capacity»

«Electricity generation from coal …. fell 22%, …. Coal’s contribution to overall electricity generation in May fell to 64.2%, compared with an average of over 70.7% last year»

«Thermal coal imports by India – the second-largest consumer, importer and producer of coal and third-largest greenhouse gas emitter – could fall as much as 18% in 2020 due to lower electricity demand»

* * * * * * *

L’India ha evidenziato l’epidemia da coronavirus alcuni mesi dopo la Cina e l’Europa, motivo per cui i dati macro disponibili sono ancora ragionevoli: il pil annuale è 4.2% (2020-05-29) ma la produzione industriale annualizzata di aprile era già scesa del -16.7%. A maggio le riserve valutarie erano salite a 490 miliardi Usd.

Allo stato attuale dei fatti, verosimilmente i macrodati del secondo trimestre saranno ulteriormente deteriorati.

*


UPDATE 1-India’s electricity generation falls 14.3% in May.

India’s electricity generation in May fell at a slower pace than in April, as higher temperatures lead to greater demand for residential power and the government eased some lockdown restrictions to control the spread of the coronavirus.

Overall electricity generation fell 14.3% in May, a Reuters analysis of provisional government data showed, compared with a decline of 24% in April.

Despite higher consumption by residential consumers, power use was lower as many industries and commercial establishments – which account for over half of India’s annual consumption – were shut or not operating at full capacity.

Electricity generation from coal – India’s primary source of electricity – fell 22%, an analysis of daily load despatch data from POSOCO showed. Coal’s contribution to overall electricity generation in May fell to 64.2%, compared with an average of over 70.7% last year.

India’s electricity demand is likely to fall for the first time in at least four decades this fiscal year, analysts say, adding to the woes of coal-fired utilities, which were already hurting due to a prolonged industrial slowdown.

Thermal coal imports by India – the second-largest consumer, importer and producer of coal and third-largest greenhouse gas emitter – could fall as much as 18% in 2020 due to lower electricity demand, Anurag Sehgal, an analyst at Noble Resources said, a blow to miners in Indonesia and South Africa.

Menwhile, India’s solar power supply grew 12.7% and hydro-powered electricity supply rose 3.6%, while gas-fired power output was 13.8% higher, the data showed. However, wind-powered electricity supply fell 10.8%.

The share of fossil fuels in overall electricity generation in May was 70.71%, compared with 76% the previous year, an analysis of data from POSOCO showed.