September 18, 2020

Trend Watch and New This Week

First, on the Data Tracker Matrix (slide 2), we have replaced Business Formations with the Staffing Index from the American Staffing Association. The Staffing Index has steadily increased since late April (slide 5).

In the US, the number of confirmed COVID-19 cases has continued to decelerate recently, as have the number of hospitalizations and death rate (slide 3). These trends, along with faster, better and cheaper virus testing, contributed to the Big Ten conference announcing the return of football in October. Other organizations and activities are likely to follow, accelerating their reopening schedules.

However, infection case numbers are climbing again globally, particularly in India and Brazil, as well as several European countries and the United Kingdom (slide 6). In fact, the UK reintroduced nationwide restrictions, limiting public gatherings to no more than six people.

Air passenger throughput, which surged around the Labor Day holiday, has slumped in the past week (slide 7). US gasoline and diesel use has largely recovered, but jet fuel usage remains roughly 45% below the three-year average (slide 8).

Bottom Line

US activity-based data, which has reaccelerated in August and early September, reflects more areas gradually reopening. As we have repeatedly stated, increased and speedier virus testing can mimic a vaccine in practical terms by quickly identifying outbreaks and isolating and containing infections. This would allow additional activities to restart sooner even without a vaccine.

Yet increasing infections globally, particularly in Europe and the UK, are an undeniable setback. It most certainly pushes a restart of international travel even farther into the future.

Overall, we maintain our general optimism about the US recovery path. Though in the early innings, the US economic recovery remains ahead of most of the rest of the world, with the exception of China and a few Asian countries. Still, within the US, the recovery will continue to be uneven—both by industry and region.