November 13, 2020

Trend Watch and New This Week

The recent increase in US COVID-19 infections throughout the US, averaging more than 110,000 per day, is troubling. This week we highlight rural counties, which have been the recent hotspots for new cases on a per capita basis (slide 5).

Hospitalizations, which lag new cases by roughly 10-14 days, have also turned higher. With over 60,000 patients currently, hospitalizations are now above both the initial spring breakout and the mid-summer wave in July (see slide 3, bottom left). Yet, death rates appear relatively stable, which is likely the result of quicker identification (testing) along with better treatment and therapeutics.

Freight volumes at the top five US ports remain unusually strong beyond the traditional August or September peak, when firms stock up ahead of holiday sales (see slide 6). In fact, inbound ships and backed up port traffic indicate that volumes will remain strong through November, which bodes well for overall economic activity.

Lastly, we updated the public transit chart, which remains greatly impacted (slide 7). However, ridership spiked during October in Dallas during the Major League Baseball playoffs and World Series. This suggests that public transit may remain impacted due to work-from-home and the a lack of large-scale events, such as sporting events and concerts, which typically drive ridership. That said, Dallas appears to have recovered somewhat in early November following the sharp decline in late October.

Bottom Line

We remain concerned about the surge in infections both in the US and abroad. However, death rates in several European countries and the United Kingdom have spurred reinstated lockdowns. While we do not expect similar widespread lockdowns in the US based on current trends, the backtracking of virus trends will likely push back further reopenings.

Additionally, Hurricane Zeta continues to cycle through some of the weekly activity-based data, particularly in the Gulf Coast and southeastern US. While this is temporary, it obscures an already cloudy view for decision makers.

We maintain our general optimism about the US recovery path. The US economic recovery remains in the early innings. Still, within the US, the recovery will continue to be uneven—both by industry and region.