Posted by lplresearch
Economic Blog
We check in again today on some of the real-time economic data that LPL Research is monitoring to provide timely and valuable insights into the state of the US economy. Traditional economic data is often reported too slowly to pick up the changes that are occurring in response to the COVID-19 pandemic.
The latest data on US COVID-19 cases has shown steady progress since peaking at the end of July. COVID-19 hospitalizations are at the lowest levels since the end of June and are close to the lows of mid-June. The number of positive COVID cases rose over the last week, and while the number of tests performed increased, the positive test rate also increased to near 6% (source: COVID Tracking Project). Further, Labor Day get-togethers may have created the recent bump in transmission, a trend we saw following other holidays over the summer.
“Even as much of the real-time data shows a slowing recovery as Americans adjust to the new normal, it’s encouraging that new COVID-19 cases and hospitalization rates have improved greatly since mid-summer,” explained LPL Financial Chief Market Strategist Ryan Detrick. “Progress on a COVID-19 vaccine and fiscal stimulus could help the economy and markets in the fourth quarter, but as investors struggle with election uncertainty and US-China tensions remain elevated, it’s likely to be a bumpy ride.”
Out of all the indicators we monitor, US retail sales had been showing one of the most robust recoveries toward the end of the summer as it exceeded 2019 levels on a year-over-year basis, but the most recent weekly readings from retailers on same-store sales recently slipped back lower than last year (source: Bloomberg, Johnson Redbook). It’s not surprising that consumer confidence levels, as measured by the Bloomberg Weekly Consumer Comfort Index, also dipped on their last reading.
Driving map routing requests by the Apple maps app exceeded pre-pandemic levels but have since leveled off and is now declining slightly. This real-time indicator steadily recovered from March and April lows as people returned to work or other economic activity, and it’s been continuing at a higher than normal rate as Americans travel by car when they previously may have used public transit or air travel. Public transit usage, as measured by Moovit, is still at only 50% of its baseline level, as working from home has a huge effect on usage numbers in major metropolitan areas.
Electricity demand is also showing a bumpy recovery. It had recovered, dipped, and then recovered, only to dip again since the start of September. Demand for electricity dropping again potentially indicates a slowdown in the rate at which businesses are reopening or softening demand for their goods and services.
During the midst of the March lockdowns, the number of diners in US restaurants hit extreme lows of -100% compared to the same time last year. The last reading on this indicator was -45%, coming off a recent peak of -30% on September 7 (source: Opentable). Restaurant bookings could be under pressure as cooler weather makes outdoor dining less comfortable in parts of the country.
As the seasons change from summer to fall, consumer behavior often changes, too, and the potential for heightened rates of viral transmission grows. We will continue to monitor key high-frequency data and provide updates for clues about the path of the economic recovery as we continue to battle the outbreak of COVID-19 across the globe.
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This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
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