U.S. Reopening Monitor Update - November 2, 2020
The Stone Investment Partners’ U.S. Reopening Monitor was designed to provide a dashboard of high frequency and non-traditional data to gauge the pace and strength of U.S. economic activity as business restarts following the COVID-19 lockdown. The dashboard consists of three main indicator groups: healthcare, economic and financial market. This guide will provide the details behind each of the indicators within the groups.
Readings for our U.S. Reopening Monitor deteriorated with new COVID-19 cases again rising on a week-over-week (W/W) basis. Underlying high frequency economic data weakened with only dining improving while the public transit, retail sales, consumer sentiment and airline travel measures took a step back. After the record setting 3Q annualized GDP expansion of 33.1%, the Atlanta and New York Fed’s estimate of 4Q GDP growth slows to 2.3% and 3.2%, respectively.
A way to visualize the data is to look at the number of factors in the monitor improving or deteriorating on a week-over-week basis.
Initial and continuing jobless claims are releases with a one- and two-week lag respectively. Data marked with an asterisk (*) denotes that the indicator was either not yet available or not published by the underlying source that week. The data marked in green indicates that the measurement improved on a week-over-week basis, while red reflects week-over-week deterioration.
We added the Dallas Fed's Mobility and Engagement National Index (MEI) to our toolkit to monitor activity away from home here in the U.S. The MEI uses cell phone data to gauge how much activity has been impacted by COVID with normal being 0 and the April average weekly low at -100. The MEI consists of seven different underlying measures including the percentage of mobile devices leaving home along with the distance and duration of the trip and the average time spent at home. Some important insights can be gleaned from our chart this week: Economic activity was clearly correlated with mobility, but economic growth has continued to improve despite the pace of mobility improvements slowing. Also, as one might expect given the characteristics of the virus, mobility in rural areas has been less impacted relative to metropolitan areas.
Though this monitor focuses on the U.S., it is worth highlighting the spike in COVID infections and additional restrictions on activity in other parts of the world.
Confirmed COVID cases have risen on a W/W basis for seventeen straight weeks in the Eurozone. More restrictions have been enacted across much of Europe which will weigh particularly on services including dining. France, Germany, Italy and Spain hit an all-time high weekly infection pace.
The increase in cases is weighing on dining in Germany.
The U.K. pace of infections decreased but remained at a high level with partial lockdown on activity announced over the weekend.
The increase in cases and restrictions are weighing on dining in the U.K.
Japan COVID cases rose but remain below highs.
Apple publishes international mobility trends that we'll be monitoring.
The Guide to the U.S. Reopening Monitor is linked here.
The PDF version of the weekly update to the U.S. Reopening Monitor is linked here.