Head of U.S. Economics
BofA Global Research
The virus situation continues to improve with cases and hospitalizations falling by double digits. Daily COVID cases are down 56.7% from the recent peak on September 1 and new hospitalizations also declined by 12.1% over the week.1 Meanwhile, close to 70% of the adult population has been fully vaccinated and total pediatric patients hospitalized with COVID continue to fall sharply, particularly in the South.2 This should help mitigate the economic risks posed by the virus.
Turning to consumer activity, the latest mobility data show a slight increase in visits to retail and recreation locations, workplaces and transit stations; however visits still remain below pre-pandemic levels.3 Compared to 2019, air travel is now down 20.2% for the week ending October 25, which is a 1.2% increase from the prior week.4 Moreover, the recent removal on international travel bans should help boost demand further. The recovery in dining out has been more modest. After recovering from its brief Delta driven decline, dining out has only edged up modestly and is little changed from the summer.5
In the labor market, job openings on Indeed were up 47.4% as of October 15 from February 1, 2020, signaling labor demand is increasing.6 Meanwhile, initial jobless claims remained below 300k for the second consecutive week. While more data is needed to provide a clear picture of October hiring activity, strong services spending, continued growth in the Staffing index, and relatively better Homebase and UKG data suggest hiring activity picked up in October.
The trends that we have seen over the last several weeks in the virus and high frequency economic data have continued. The virus situation continues to show significant improvement, which appears to be lessening consumers’ concerns. Consumer spending is picking up and we expect this trend to continue assuming COVID concerns ease further.
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- CDC, HHS
- Google COVID-19 Community Mobility Reports, Data through Oct 23, 2021
- TSA Data through Oct 25, 2021
- OpenTable, Haver Analytics, Data through Oct 25, 2021
- Indeed, Data through Oct 15, 2021