Economic Blog Posted by lplresearch
Wednesday, March 24, 2021
It has now been a little over a year since the first COVID-19 restrictions and lockdowns were implemented in the United States, with California having implemented the first stay-at-home order on March 19, 2020. LPL Research can now use high-frequency data to compare where we are now to the early days of the pandemic.
“Much of the real-time data is showing huge improvements from where we were a year ago as U.S. consumers are venturing back out to restaurants, theaters and airports,” said LPL Financial Equity Strategist Jeff Buchbinder. ”While most data is still well below pre-pandemic levels, the mostly successful vaccination rollout is boosting consumer confidence which should aid the pace of economic recovery.”
One of the most extreme examples of the impact of reopening in the high-frequency data, compared with where we were a year ago, is box office receipts at U.S. theaters. As shown in the LPL Chart of the Day, gross box office receipts are up 424,966% versus the same weekend in 2020. Despite this huge year-over-year increase, revenues are still down 88% versus pre-pandemic 2019 levels. In perhaps a microcosm of how technology has changed the business environment for many companies during the last year, the highest-grossing movie last weekend, Raya and the Last Dragon, was also simultaneously released on Disney’s streaming service.
Data on the number of people passing through U.S. airports have also shown a dramatic increase year over year; passengers are now up 80% compared to the very depressed numbers a year ago. Again, the overall levels of passengers are much lower than pre-COVID-19 levels with rolling average daily numbers currently at 1.3 million passengers compared to 2.4 million for the same period in 2019.
Restaurant bookings as measured by OpenTable, appear to also be benefiting from increased confidence from consumers and rolling back of local restrictions, in the last week restaurants registered the most bookings relative to pre-pandemic levels. The latest data shows the last week had just 28% fewer bookings than the same period in 2019 and that compared to the same period in 2020 bookings are up 26,000%.
The real-time data is indicating we have come a long way in the last year, but there is still some way to go to get back to pre-pandemic levels of activity in many areas of the economy. COVID-19 still presents a lingering near-term risk, with variants of the virus adding to the worry, but the robust recovery in the real-time data, along with vaccine distribution, fiscal and monetary stimulus, have our confidence high for an economic recovery. Sharp moves higher in interest rates pose a risk of equity valuations contracting meaningfully, though we see that as unlikely. We expect interest rates to stabilize in the near term and begin to fade as a concern for the bull market.
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