7.1.20 Real-Time Data Plateaus As COVID-19 Cases Jump
We check in again today on some of the real-time economic data that LPL Research is monitoring to provide valuable insights into the current state of the US economy, even as traditional economic data is too slow to pick up the changes that are occurring in response to the COVID-19 pandemic.
Much of the high-frequency data is now showing a pause in the steady improvement we had seen since the end of March amid increasing public concern over the recent spike in COVID-19 cases in the US. In the last two weeks, the number of daily new US COVID-19 cases has doubled to over 40,000, largely due to surges in many southern and western states. While this is certainly a concerning development, the sharp increase in confirmed cases has come amid record testing levels (the seven-day average number of tests performed is up 26% in the last two weeks to 590,000). And while Tuesday’s more than 1600 increase in hospitalizations was concerning, thankfully the recent uptrend in the number of people hospitalized has been more gradual than the growth in new cases.
The recovery in many of the real-time indicators appears to have plateaued in the past week, potentially reflecting that the increase in COVID-19 cases has the US consumer reconsidering dining out, shopping in stores, or traveling, where social distancing can be more challenging. Coming off extreme lows of -100% compared to the same time last year, the improvement in the number of diners in US restaurants has leveled off in the past week and is now sitting at about 50% down year on year.
Another piece of high-frequency data showing a potential stall in the recovery is electricity demand, which had recovered toward the end of May as many states re-opened. In the past week, however, demand flattened out potentially indicating a slowdown in the rate at which businesses are reopening or softening demand for their goods/services.
One real-time indicator that has now exceeded pre-pandemic levels is map routing requests by the Apple maps app, meaning more driving is occurring. This data steadily recovered from March/April lows as people returned to work or other economic activity, and now the continued increase is possibly reflecting a substitution effect as people shun public transportation and air travel.
“The fits and starts in the real-time data show that this recovery is probably going to take longer than most of us want to see,” explained LPL Financial Senior Market Strategist Ryan Detrick. “We are on the road to recovery, but it is a road that is going to be pretty bumpy.”
We wish you a happy and safe Fourth of July.
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