Michelle CluverSurging COVID-19 cases have dampened economic activity globally. Over the last week, there has been a sharp deterioration in Bloomberg’s daily activity indicators. A large portion of this week’s decline reflects the typical holiday season; however, this follows a steadily deteriorating trend since the end of summer as the global case load rose. With cases continuing to rise, this could potentially be a long winter.
Bloomberg’s daily activity indicators use high-frequency data to provide a more up to date reflection of economy activity. This includes information on mobility, energy consumption and public transportation usage.1 Around the holiday season these metrics typically deteriorate due to people taking a well-deserved break in the lead up to Christmas and the new year. This had a substantial impact on some of the largest advanced economies as well as most emerging markets.
But not all this decline can be attributed to festive cheer. Record levels of COVID infections and tighter containment restrictions resulted in a sharp drop in activity during the third week of December. Community mobility measures the movement of people to offices and retail spaces over the last month relative to pre-pandemic movement. According to Bloomberg’s COVID Resilience Ranking from December, there are only a handful of countries that have restored mobility to pre-pandemic levels, most notably New Zealand and China. These are two regions that continued their improving trend during December. Conversely, U.S. community mobility remains 25.5% below its pre-pandemic levels, deteriorating from 21.7% lower in November.2
Within advanced economies, Japan stands out. Firstly, they did not have the seasonality factor of Christmas. But more importantly, due to maintaining control of the virus their daily activity indicators have remained around the 90% level throughout Q4.1 Consequently, Japan has remained in the top ten on Bloomberg’s COVID Resilience Ranking during the last two months. Their recent uptick in cases resulted in Japan having a small deterioration in community mobility from 7.8% below pre-pandemic levels in November to 8.8% below in December. This contributed to Japan’s overall ranking declining from 2nd to 7th out of 53 countries. This doesn’t sound as bad when considering that the U.S. ranking deteriorated 19 spots from 18th to 37th.2
With holiday travel and family gatherings, the situation potentially could worsen as we move into the new year. But at least vaccines provide some light at the end of this long, dark tunnel.