Trend watch and what’s new this week
There’s clear evidence the delta variant wave is receding in the U.S. in terms of new cases and the number of hospitalizations (slide 3). This is also apparent in the hotspot states, where cases (slide 7) and the rate of hospitalizations (slide 8) have continued to decline.
However, while the rate of deaths tends to lag cases by 10-14 days, U.S. adult COVID-19 deaths are climbing (slide 3). Additionally, the improvement among adults masks a surge within school-age children ages 5-17 (slide 9). This is particularly concerning for children under age 12, who are both increasingly getting infected and being hospitalized. Still, the deaths among school-aged children during the entire pandemic is just 0.07% of all U.S. COVID deaths.
Incoming economic data is beginning to reflect Hurricane Ida, especially in the restaurant and hotel figures. This week, we highlight the OpenTable restaurant bookings in Louisiana, New Orleans, and Houston, which illustrate the impact from Ida (slide 10).
Similarly, we revisit payment of apartment rents (slide 11). Rates have slipped of late, but it remains to be seen how much was related to the Labor Day holiday and Hurricane Ida.
Lastly, we show a longer-term view of the NY Fed weekly economic index (slide 12), which displays the strength and resilience of U.S. economic activity. This complements the shorter view we’ve been showing in the weekly activity dashboard (slide 6).
Bottom line
The cross-currents that we mentioned last week abound. This week add the remnants of Hurricane Nicholas to cross-currents list of the Labor Day holiday, Hurricane Ida, the delta variant, and the wind down of summer.
All of these have conspired to dent some of the economic momentum gathered over the summer and are causing noise within some of the data recently. This will likely persist for the next few weeks and will spill into some of the monthly data.
Those factors have also made the unevenness by region and industry more apparent once again. Yet, in most cases, it is delay of plans rather than a derailing of the recovery. This view is supported by much of the traditional economic data, which remains strong, including consumer spending, housing figures, as well as several gauges of services and manufacturing. The latest was a solid retail sales report for August.
In other words, while the pace has slowed somewhat from the peak, overall economic growth remains solid and well-above the pre-pandemic rate.
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