New Tail Risks Emerge For 2021

Yearly Redbook same store sales growth in the week of April 10th rose from 10.6% to 13.2%. The consumer is spending a lot even compared to a couple of years ago. The table below breaks down spending growth in the 2nd half of March. Sales growth at restaurants and bars has been up about 11% to 13% compared to 2019. That’s because in most areas consumers have pent up demand. If you haven’t gathered with your friends and family for a meal in a year, you are more likely to do so when it’s safe. Growth would be higher if no areas had restrictions. The 11 PM curfew in NYC was lifted for gyms and movie theaters, but not for restaurants.

As you can see, transit is still down in the mid to high teens compared to 2019 because many people haven’t gone back to working in offices. It makes zero sense to bring your workers back before they have been vaccinated especially since the vaccination process is going so quickly. If you kept them out of the office for over 1 year, what’s the harm in keeping them out for another two months until it’s safe? We think transit use will return to near normal levels by the summer. Clothing sales have rebounded very strongly with sales growth ranging from the mid-30s to the mid-40s compared to 2019 levels.

The bad news is the decline in the 7 day average of COVID-19 deaths per day in America has begun to slow in the past 2 weeks. The current 7-day average is 747. That’s the lowest reading since October 17th, but it’s not low enough to get the economy back to normal. Michigan had another wave of COVID-19 cases while much of the country was benefitting from the vaccination effort. The wave may have peaked near 7,500 cases per day though. Michigan’s vaccination rate is only slightly behind the rest of the country. 29.3% of its people are vaccinated compared to 30% in America. The virus is the main mitigating factor to a full reopening.

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