The Delta version has muted the progress of the US economic recovery from the Covid-19 pandemic, with consumers delaying some holiday spending and businesses returning to normal operations, according to multiple high-frequency reports. Show softness in August.
The number of passengers passing through airport checkpoints has started declining again. According to data from the Transportation Security Administration, 1.47 million passengers flew on Tuesday, the lowest in more than three months. The seven-day average dropped to about 1.76 million passengers a day at the end of August, from about 2.05 million a month earlier.
While this partly marks the end of the summer holiday season, airlines have cited the Delta version as well. “There has been a slowdown in holiday bookings and an increase in cancellations,” said Helen Baker, senior research analyst at Cowen Inc. As companies delay return to offices, the return of business air travel may also be delayed, she said.
After narrowing the gap to just 5-6% at the end of July, sit-down meals at U.S. restaurants have been down about 10-11% from 2019 levels in recent weeks, according to OpenTable, which processes online reservations. Is. Concerns about Delta and the city’s mandate are playing a part, according to the company.
“We see a clear decline in late July and August,” said OpenTable CEO Debbie Sue. “While several factors may be at play here, we believe the primary driver of the slowdown is diners’ concern about the rise in COVID cases.”
According to STR, a lodging data tracker, while leisure travel helped boost some popular destinations in the summer, the number of hotel stays declined for four consecutive weeks. Average room rates for three weeks have dropped.
Among the 25 major US markets, none saw engagement in the week ending August 21 compared to the same week in 2019, STR found. Occupancy in San Francisco has dropped by more than 40%, the most of any market.
“Demand looks like it’s doing a little worse than a normal seasonal decline,” said Bill Crowe, Raymond James Financial Analyst. There is a “coolness on travel due to delta-type case growth” with the business-travel markets underperforming.
While the labor market has hardened this year, and many employers say they are struggling to fill positions, there are some signs of a slowdown in demand among Delta. Dental office and child care jobs, for example, have declined in job postings for positions that would call for close contact with the public.
“During the latest wave of the virus, those virus-sensitive sectors have already seen a decline in job postings,” said Indeed chief economist Jed Kolko. If the wave continues, “demand for labor could collapse if people cut back on travel, eating out and other services.” And potential workers may be reluctant to look for work, he said.
Big US companies’ plans to bring workers back to their offices in busy business districts are being reversed. Average office occupancy in the 10 largest business districts fell to 31.3% of pre-Covid-19 levels for the week ended August 18, according to data from Kastel Systems.
While the August holidays may have contributed, “the return to normal offices has been a bit slow due to delta,” said JPMorgan Chase Real Estate Investment Trust analyst Anthony Paolone.
This affects not only real estate but also a group of businesses that depend on offices, such as dry cleaners and urban restaurants, and the city through taxes.
“There is a cascading effect for the vibrancy of the various urban cores,” he said.
By: Steve Matthews and Jill R Shah
Source: High-Frequency Charts Show U.S. Economy Softening From Delta – Bloomberg
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