Trend watch and what's new this week
Cases and hospitalizations continued to decline sharply, while the death rate has crested (slide 3). Similarly, the regional U.S. and the state-level views of infections have also dramatically improved (slide 7).
The biggest development this week has been an increasing number of states announcing the end of mask mandates in coming weeks, including New York, New Jersey, and Delaware. Furthermore, others, such Connecticut and Massachusetts, are also ending statewide mandates in schools, letting local school superintendents make those decisions, which appears to be to lift mandates. As of this week, 15 states (plus DC) still have broad school mask mandates, while eight states forbid them. But local municipalities and businesses can determine their own masking rules. Case in point, New York City will continue to require masks and vaccines for theaters, restaurants, and other businesses despite the state announcing the end of mask mandates.
Meanwhile, the percentage of new COVID-19 cases for school-aged children is rising again, particularly for elementary school kids (slide 8).
Lastly, we saw a dramatic improvement in the number of motor vehicle rail carloads, which jumped to the highest count since October 2021 (slide 9). That reflects the surge in U.S. vehicle production during January. The additional supply of new vehicles should help ease inflation, which has spiked due to a lack of vehicle inventory.
Although incoming economic data from January was mixed, the early data for February are encouraging. Activity-based data has continued to strengthen, especially the travel related pieces, including air travel (slide 6) and hotel occupancy. Temporary staffing, which is a harbinger of permanent hiring, has also strengthened.
However, the latest consumer sentiment survey plunged to the lowest reading since October 2011 due to inflation concerns (slide 10). That said, consumer sentiment can swing wildly from month to month. Thus, it reflects a point in time rather than a more permanent feeling.
Also, it probably was not helped by several weeks of wicked winter weather, replete with power outages, widespread transportation problems, including thousands of flight cancellations by airlines. Accordingly, we expect that economic data may remain somewhat mixed in the near term, and consumer sentiment may stay sour. Yet, both can improve quite quickly.
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