A long road ahead to return to normal
February 11, 2021
The impact of ongoing COVID-19 restrictions continues to affect economic activity, including elevated levels of unemployment, virtual learning for many students and closures of stores and restaurants. The second wave of regional lockdowns from late 2020 are slowly being lifted as vaccines gain scale and case numbers drop. Mobility data, however, shows how far off the economy remains from its pre-pandemic levels.
According to data from Google, total hours spent outside the home are down 13% from one year ago, a deterioration from the 8% decline we saw in September and October. Retail and restaurants are notable areas of weakness; January traffic was down 26% compared with last year, far worse than the year-over-year drop of 11% we saw as recently as December. Time spent in the workplace is down 28% since the pre-pandemic days of January 2020. That number has been relatively stable since last June, aside from a temporary drop around the holidays, which was probably driven more by vacations than COVID-19 shutdowns.
It’s difficult to predict the trajectory of the recovery given several factors still affecting economic activity. The rollout of the vaccine and continued declines in positive case numbers will influence the timing of business reopenings, office workers returning to work and willingness of consumers to head to stores and restaurants. Additionally, it will likely be months until we can determine the permanent impact of the lockdowns, including increasingly flexible work schedules and permanent closures of many retail locations and restaurants. This uncertainty makes forecasting and planning by corporate executives extraordinarily difficult.
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