Cell phone data that tracks the whereabouts of users shows that fewer Americans are condescending to local businesses and chain stores as COVID-19 cases rise in states like Arizona, California, and Florida, a worrying sign that may raise hopes for a rapid economic rebound after consumer spending fell sharply at the start of the coronavirus pandemic.
Data from the phone shows that millions of American consumers basically vote with their feet. Traffic in retail and food establishments increased during most of April and May as companies reopened, encouraging people to venture outside, but it has started to drop again since mid-June, marking one of the first periods of slowdown since city and state blockades began. That’s according to SafeGraph, which linked anonymous cell phone data with its database of business listings and points of interest.
Pedestrian traffic peaked on April 14, when it was down 55% from January levels. From that lowest point, the nation has begun to relax and there has been a gradual recovery. “Now that is beginning to change course in recent days,” SafeGraph spokesman Nick Singh said of the latest consumption patterns.
Data from the OpenTable restaurant reservation service shows a similar trend, with the level of seated restaurant customers rising in early June but dropping again at the end of the month.
Experts say the data illustrates some of the economic consequences of reopening too quickly and how early efforts to boost the economy appear to be counterproductive.
Dr. Tom Frieden, former director of the Centers for Disease Control and Prevention, has been months warned the business community of these risks.
“If we end up coming out too early and that results in a substantial spread of the virus, that will backfire on the reopening of the economy. The more we box the virus in, the more room there is for us in society,” he said. saying CBS MoneyWatch In May.
“A great opening wave”
However, not everything is related to an increase in COVID cases. Mark Cohen, director of retail studies at Columbia Business School, said customers’ brief returns to stores would have been short-lived no matter what.
“People were locked up for a month, so as soon as they heard the bars open, they jumped again,” he said. “It was a great opening, and those things don’t have legs.”
SafeGraph measured the number of visits to millions of retail chains and family businesses from March to June and compared them to the number of visits during a reference week in mid-January before the pandemic had taken hold of the US.
On June 28, restaurants, shops, and other establishments saw a 20% decrease in visitors compared to January. A week earlier, on June 21, they had been just 18% less busy.
This recent drop in traffic is even more acute in states experiencing the largest increases in coronavirus cases as a result of governments relaxing social distancing measures and allowing businesses to re-open more fully, allowing, for example, restaurants seat customers inside.
Case numbers in Florida increased most sharply between June 22 and June 27, when they reached 9,019 new cases in one day, compared to 3,200 new cases on June 22, according to the Coronavirus Case Tracker from the Johns Hopkins University.
Bars in Florida saw a 5% drop in pedestrian traffic during the same period, according to SafeGraph data. Restaurants in Sunshine State experienced similar declines in customer counts.
These data show what public health experts and economists have tried to impress the public: that containing the virus and reviving the economy goes hand in hand.
A separate set of credit card transaction data also shows that residents of states with increasing coronavirus case counts are making fewer visits to restaurants, stores, and other places where people generally spend money.
A Facteus report, which collects anonymous data from financial companies and card issuers, shows that year-over-year growth in overall spending began to slow down on June 25 in the United States. Retail spending growth fell 14 percentage points between June 21 and 28, marking the biggest negative change in weekly growth during the recovery so far.
“Retail space has had a very high trend in recent months driven by e-commerce, but we have seen a slowdown in that. It has returned to levels prior to where it was in the period of April and early May.” Said Steve Shaw, spokesman for Facteus.
Average growth in retail spending increased 28% in mid-May, partly as a result of Americans receiving stimulus controls directed by the CARES Law.
“Obviously, they didn’t spend it on entertainment and travel, so they used it in commercial space,” Shaw added.
The slowdown is likely due to a combination of factors, including consumer stimulus controls that are running low and termination of additional unemployment aid. It also appears to be related to the resurgence of the virus in states like Arizona, Florida and Texas, where infection rates rise again after abandoning social distancing precautions.
According to Facteus’ analysis, growth rates in all three states tend to be lower than in the general economy, perhaps because many residents are afraid to leave.
Texas is approximately 4% behind compared to the rest of the US, while Florida is 5% behind and Arizona 7%.
“It’s only a week, but it’s certainly something we’re going to focus on and pay attention to,” Shaw said.
Columbia’s Cohen School of Business predicts a “pretty wild decline downward” for the foreseeable future.
“If you ask me when I think this is going to ‘end,’ I think it is ready in 2022 when the health problem has been resolved or is under control and the extraordinary economic damage this virus has created has begun to improve.” he said.
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