At some point, the resurgence of the coronavirus will set the American and global economies back. In the United States, infections have increased to a rate of 157,000 per day, with each loss of life and the use of medical resources and foregone activity taking their toll on economic progress.
The refusal of a segment of the U.S. population to accept vaccination is restraining overall economic activity.
The refusal of a segment of the U.S. population to accept vaccination is restraining overall economic activity and the full reopening of the economy.
Businesses that have been scrambling to find workers and input products to meet surging demand are now likely to find customers—and workers—less willing to risk exposure to an unvaccinated person or to an unwitting transmission of the delta variant.
It is not surprising that firms are beginning to mandate vaccinations for those returning to traditional workplaces.
Given the public’s response to the health crisis in recent months and the spread of the virus—think of the ripple effect of economic shutdowns in Southeast Asia—we recently downgraded our forecast for economic activity in the second half of the year.
We are now anticipating the economy to grow by 6.5% for the entire year with the risk of lower growth should events dictate. Should the delta variant spread further, then we would expect to shave more than a percentage point off that forecast in the upcoming days or weeks.
The spread of the delta variant should come as no surprise after last year’s experience. You would have to assume that summer would be the logical point where people dropped their guard. By this year’s July Fourth weekend, vaccinations were commonplace and were judged to be safe for children as young as 12, leading people to finally take a vacation or enjoy a night out.
All the while, the delta variant is taking its toll. According to the Centers for Disease Control and Prevention, the delta variant accounts for 99% of COVID-19 infections. It is more transmissible than the common cold or the virus that causes smallpox.
As populations move back indoors in the fall and winter, the fourth wave of the pandemic caused by the delta variant has the potential to rival the peak of infections of earlier this year. On the positive side, the rate of vaccination is increasing once again, which seems to have had a dampening effect.
What lies ahead?
As reported by Yale Medicine, the delta variant spreads 50% faster than the alpha variant, which in turn was 50% more contagious than the original strain of the coronavirus.
In the Yale article, the epidemiologist F. Perry Wilson estimated that in an environment in which no one is vaccinated or wearing masks, the delta variant spreads from one person to 3.5 to 4 other people. Compare that to the original virus, where the average person infected 2.5 other people.
”What seems like a fairly modest rate of infectivity can cause a virus to dominate very quickly,” Dr. Wilson was quoted as saying. This leads to his conclusion that a patchwork of outbreaks will occur, allowing the virus to “hop, skip and jump from one poorly vaccinated area to another,” for what could result in “hyperlocal outbreaks.”
Statewide data shows the incidence of deaths rising among populations with lower rates of vaccination.
Yale Medicine also reported that symptoms of the virus are mutating as well, with less common occurrences of coughing and a loss of smell that characterized the original strain of infections.
Instead, headaches, sore throats, runny noses and fevers are reported “based on the most recent surveys in the U.K., where more than 90% of the cases are due to the delta strain,” according to the Yale article.
What’s more, “even people with breakthrough cases carry tremendous amounts of virus in their nose and throat, and, according to preliminary reports, can spread the virus to others whether or not they have symptoms,” the article said.
Finally, the article found that studies are moving in the direction of waning effectiveness of the vaccines, which will likely result in the need for booster vaccinations as early as mid-September.
The pandemic in charts
The up-and-down arc of the pandemic shows that there is a race between administering vaccinations to a broad population, and the emergence of new variants of the coronavirus.
Vaccinations: Those risks have to be placed in the context of the constructive developments of the past several weeks.
The pace of administering vaccines is increasing again, most likely in response to the threat of the delta variant.
Since December 2020, 62% of the total American population over 12 have been fully vaccinated, according to the CDC and data compiled by Johns Hopkins University and Bloomberg through Aug. 29.
The pace of administering vaccines is increasing again, most likely in response to the threat of the delta variant. By the end of August, nearly a million doses were being administered each day, twice the rate at the start of July.
Infants and children under 12 remain vulnerable, however, and a sizable segment of unvaccinated people will become hosts to further mutations of the virus. This will need to be addressed at all levels of government and among health care providers.
Infections and deaths: Newly reported cases of COVID-19 are increasing again, from 12,000 per day in June to 157,000 per day two months later. That’s a significant increase in a short time, based on seven-day moving averages from Worldometer.
Deaths are moving higher again, reaching more than 1,000 per day. And because deaths lag infections, we anticipate that number to continue to increase unless vaccinations are quickly adopted.
In total, the cumulative number of reported infections is approaching 40 million Americans, of whom more than 654,000 have died.
For more information on how the coronavirus pandemic is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.