Head of U.S. Economics
BofA Global Research
Signs of Hope with the COVID Crisis
At last there’s a light at the end of the tunnel in the U.S.’s battle to contain COVID. We’re now hopeful we are at the tail-end of the crisis, with the vaccine rollout ramping up while virus data show an outright decline in cases, hospitalizations and even deaths.
The seven-day moving average for cases has fallen 19% from the previous week to slightly over 197,000.1 Vaccines, meanwhile, are being distributed at a solid pace, with 13.6 million people having received the first dose as of January 19, and 2.0 million the second.
But we’re not out of the woods yet. New, more contagious strains of the virus—which pushed the UK into lockdown—have arrived in the U.S. and pose a real risk to the current downward trajectory of COVID cases if restrictions are lifted too quickly.
There are still 17 states with ICU occupancy rates above 80%, and they may keep tough restrictions in place even as the number of cases fall.
The recent restrictions and resulting improvement in case numbers comes with an economic cost of course.
The New York Federal Reserve’s economic index fell to -2.5% year-over-year, in the week ending January 15. Mobility is down relative to pre-holiday levels and labor market indicators are signaling weak labor demand. Jobless claims surged during the week ending January 9, and small business employment is down from early December, according to Homebase.
Yet we expect economic activity to improve. We’re already seeing signs that consumer spending is on the rise as the $900 billion stimulus package kicks in. And the recovery could surge if another stimulus package is passed in coming months.
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- COVID Tracking Project, as of Jan 19.
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