July 17, 2020

Covid-19 : Tracking the Recovery – July 17, 2020

Across the globe and here in the U.S. Covid-19 cases continued to move steadily higher, increasing by over 4 million worldwide, to just under 14 million, with nearly 600 thousand deaths. Here in the U.S. reported cases are just shy of 3.7 million, with some of the highest daily totals being recorded over the past week. While cases have ticked sharply higher, mortality rates have thankfully moved only slightly higher thus far. This may be attributable to the lower average age of those infected, better treatment options for clinicians thanks to the medical community and learning from the experiences of previous hot spots across the globe and Northeast U.S. There may also be a lag between infections and mortality that is at play, which may unfold in the coming weeks.

With 32 states experiencing higher rates of infection than in the spring, more than half of the states have either paused, backtracked their reopening or instituted other travel related restrictions. Florida, Texas, Arizona, Louisiana and California continue to announce large daily increases in cases. Additionally, Alabama, Georgia, Tennessee, and the Carolinas are all experiencing a notable surge. While testing has indeed increased across the country, the percentage of positive tests has also increased, suggesting incremental testing is not the sole reason for the spike. Several of the hardest hit states continue to report strains in their healthcare systems, including Texas, Arizona, Florida and California. In many cases, hospitals are north of 90% capacity and looking at redeploying resources, including a ban on non-elective procedures.

As the country began to emerge, several of the hardest hit economic sectors have experienced an improvement in consumer activity. Air traffic during the 4th of July weekend registered approximately 725k passengers per day. While this is still roughly 63% below the same period last year, it capped off strong improvement which began during the month of June.

Reservations at restaurants are approximately 62% lower than the levels this time last year. Improvement which began at the beginning of May seems to have stalled during the middle of June according to the data from Open Table. This is consistent with capacity restrictions being enforced in most states, but still suggests a willingness on the consumer’s part to engage once options are expanded.
Finally, hotel reservations rose through the end of June, but stalled during the first two weeks of July at approximately 46% of available capacity. Though it should be noted that hotels that remain closed are not counted in the capacity total. Some areas continued to improve while most have merely stabilized. Improvements were offset by declines in large markets such as New York and Miami. Miami’s decline is likely attributable to its status as a growing hot spot, while in New York, Governor Cuomo instituted a 14-day quarantine rule for travelers from many states with surging cases, which likely discouraged travelers.

While the Northeast was at the tip of the spear when the virus hit the shores of the U.S., case numbers continue to remain relatively contained, though New York has experienced a modest increase during the past week. As such, the Federal Government continues to shift resources to the burgeoning hot spots in order to provide the necessary personnel, equipment, medication and PPE to where it is most needed. To that end, HHS (Department of Health and Human Services) has changed the data collection process from hospitals to better streamline the flow of information and ensure timely distribution of resources. Previously, this information was flowed to the CDC, which has agreed with the more efficient transmission mechanism being implemented.

As always, we will continue to examine the data to assess the path of the U.S. economic recovery. May and June provided some positive surprises relative to employment, spending and other macro-economic activity. Though the current implications of the trajectory of the virus are yet to factor into any meaningful data. We will continue to provide you with updates in the most comprehensive, cohesive, and timely manner possible.