Over the past few weeks, an array of near real-time economic data implies that the economic free fall of the coronavirus has come to an end.
Apple mobility searches, Open Table reservations and TSA data all point to a tentative recovery.
While there will be some troubling data ahead – including employment, wages and bankruptcies — we do expect that the data for May and June will show that the economy is contracting at a slower pace than before.
Under current conditions, that will illustrate a turn in the economy and points to a long, slow road out of the recession’s nadir.
Six regional manufacturing and consumer confidence surveys point to a recovery in the offing. Most important, a 75% increase on a year-ago basis in mortgage applications and 0.6% increase new home sales for April both look to be potential economic leaders out of the abyss.
The data briefly discussed below all point to economic stabilization, albeit at low levels and substantially below that observed one year ago.
The gradual reopening of the economy has clearly begun. We expect an elongated and frustratingly slow recovery that will look like a Nike swoosh rather than a W or V-shaped period of growth in the near to medium term.
Our base case anticipates a solid economic rebound in the final quarter of the year followed by a more modest multiyear period of recovery. We do not expect expansion beyond January levels until the middle of the decade.
Apple mobility data
Demand for directions using Apple maps all point to the gradual emergence of individuals from self-distancing and shelter-in-place orders. This is significant because individuals began self-distancing before general government shelter-in-place orders sent into effect around March 9, so behavior here is key to understanding the pace and magnitude of any consumer-led recovery.
Open Table reservation data
The same dynamic was revealed in restaurant reservation data, which showed that people were self-distancing before any government orders were imposed.
While it would be premature to state that consumer confidence has returned — it has definitely not — one can note that following the May 1 reopening of local economies around the country, there has been a pickup in restaurant reservations. Here we can observe a slowing in the pace of contraction on a year-ago basis.
TSA checkpoint data
Traffic at TSA checkpoints, like restaurant reservation data, is tentatively demonstrating signs of life. While this data is well off of year ago, individual and business travel is beginning to improve. From our vantage point, given the health risks around travel, this is going to be one of the economic bellwethers that will be used to estimate the pace and magnitude of the recovery.
For more information on how the coronavirus is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.