As of mid-July, just under half (49.3 percent) of Americans report being vaccinated and roughly 57 percent are halfway there with a single dose. While lower than government projections, that tally has given people the confidence to go back out into the real world to shop, dine, go to the movies and more.
But recent news reports indicate that Americans are perhaps not out of the COVID-19 woods just yet, with the virus resurging in some areas and infection rates spiking once again — particularly in places where response to the vaccine has been lukewarm, which has caused leaders to more actively appeal to citizens.
“So please, please get vaccinated. Get vaccinated now,” President Joe Biden said in a recent speech, noting that the nation’s economic recovery depends on it, as does the current curtailment of the mask mandates of the past 18 months.
Biden’s pronouncement comes as the average number of daily new COVID-19 cases in the United States has tripled in the past 30 days, topping 32,000 on Sunday (July 18), while COVID-connected hospitalizations have risen 21 percent to over 19,000, federal data show. Death rates, which tend to lag behind other indicators, rose 25 percent last week to an average of 250 per day.
The numbers have stoked concerns that the recovery is no longer moving full-steam ahead, but is in fact at risk of going into reverse by the time fall rolls around.
On the Dark Side
Worry ripples are beginning to work their way through the economy. Wall Street saw a major stock sell-off earlier this week, predicated on concerns that another round of outbreaks might trigger a great leap backward, with state and local officials forced to impose new lockdowns and business closures to slow down infection rates.
The economy surely doesn’t need another round of closures that the economy surely doesn’t need — particularly small businesses and their workers — as the first round knocked millions out of work, closed the doors of main street SMBs and brought the economy to a screeching halt.
It posed difficulty for a variety of firms, most notably airlines, which, as of this week, are finally returning to profitability (or near-profitability) per Q2 earnings reports — without an injection of government funds in the back half of 2021. But those forecasts are predicated on the ongoing retreat of the virus, making consumers increasingly comfortable flying the friendly skies again.
Moreover, we’re starting to see a corporate response to the potential virus resurgence, as Apple has announced that it will delay its long-standing September return to the office date by at least a month into October. “As the situation continues to evolve, we’re committed to the same measured approach that we have taken all along,” an email to employees noted.
Apple is not the first firm to delay its return to the office, but it is one of the first to do so in direct response to the emerging COVID-19 Delta variant, and could be an indicator of other corporate actions yet to come.
On the Bright Side
While the news predictions look a bit grim in some regards, there are some qualifications that inject a bit of brightness to the situation. First, though the outbreak figures are less than wholly encouraging, they are far from evenly distributed, and tend to be concentrated in areas where vaccination rates has lagged behind averages — meaning those outbreaks don’t represent an evenly distributed mass event of the kind that shut down the economy.
Monday’s stock sell-off was noteworthy but short-lived, as the stock market quickly recovered in subsequent days and has rallied sufficiently to erase Monday’s losses, emboldened by bullish experts and analysts who are still forecasting that the Delta variant will not put much of a dent in the economic recovery.
“The variant is a significant downside risk for the economy, but that risk is more than offset by what are still very strong fundamentals,” Oren Klachkin, lead U.S. economist at Oxford Economics, told The Wall Street Journal. “Consumers have a lot of cash and seem eager to spend on activities they couldn’t do for 18 months. And, for now, it seems like the vaccines should be able to keep the spike in cases fairly low.”
Oxford is still forecasting a nice percentage growth in Q3 GDP, a pace that is in line with the stimulus-fueled growth in the first half of the year.
So, which side to lean toward?
The experts are feeling confident that the numbers are looking worse — which means we may be stuck in a bit of a wait-and-see pattern in terms of what consumers will actually do.
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