“The state of the epidemic clearly has the capacity to influence economic outcomes,” said Ryan Preclaw, director of credit strategy at Barclays. “The economic damage seems to be spreading widely, no matter where the cases are concentrated. ”
This last point is important since the bulk of the outbreak occurred in four states: Arizona, California, Florida and Texas. Together, they accounted for just over half of all new cases reported on Thursday, according to the COVID Tracking Project.
Seeing daily reports of increasing cases, no matter how concentrated, has prompted states across the country to reconsider their efforts to restart their economies. In particular, the hard-hit hotel industry faces setbacks, and large gatherings continue to be limited.
High-frequency data tracked by Barclays shows that road traffic has “been slower to recover” than in other parts of the world, with Americans reluctant to resume normal operations.
After consecutive months of total payroll increases of 7.5 million, job lists have shrunk and are almost 20% below their February level.
The stabilization of activity combined with the increase in virus cases “raises the possibility that a further acceleration of the national outbreak (and future restrictions on economic activity) is on the horizon,” said Preclaw.
Indeed, Americans already seem to be cutting back on vacation activities.
Of 1,800 respondents to a recent Jefferies poll, 60% plan to stay at home this summer, compared to 52% from the last reading in May. Of the group planning to go anywhere, 75% plan to drive, up from 60% in May. Those who say they are camping now number 3%.
Overall, the survey reflects a “growing fear of shopping or entertainment, a sharp drop in planned trips and less optimism around a return to work in 2020,” said researchers from Jefferies. in a note.
Respondents indicated that 60% of workplaces had reopened, compared to 33% in May. However, 17% think they will work from home until 2021 and 24% do not think they will return to the workplace “in the foreseeable future”.
Frugality is another impact: about a third of respondents said that if they got another stimulus check, as discussed in Congress, they would save it or pay off their debt.