It won’t be fast as we reopen next year into endemic COVID. Via Goldman:
Economic activity: Our consumer spending tracker has declined moderately and now stands at 98.9% of the pre-virus level, down from an average of 101%in July. The softness in activity appears to be driven by renewed virus fears—53% of adults now ascribe at least moderate health risk to “normal” activities(vs. 28% in June)—and the decline in spending partly reflects a slowdown in some virus-sensitive services. Activity at restaurants has declined by 5% since the start of August, while TSA traveler throughput and hotel activity have been roughly flat over the last few weeks. Measures of consumer sentiment declined from July to August, though our Twitter economic sentiment index fell by less than the University of Michigan’s index of consumer sentiment.
Virus spread: The coronavirus situation deteriorated over the last month: daily new cases increased from 31k to 134k (7dma) and daily fatalities have tripled. Hospitalizations have increased nationwide and are close to the winter peak in the South. 60% of the population has now received their first dose of the vaccine. However, the daily pace of new doses administered is just 0.7mn(7dma, from a peak of 3.4mn) and survey-based measures indicate that onlyabout 75-80% of adults are already vaccinated or intend to get vaccinated.
Scarring effects: Signs of long-term damage to the economy remain limited.Total commercial bankruptcies were 55% of the pre-pandemic level in July. The number of active small businesses increased by 1.5pp to 96.7% of the pre-viruslevel in June (vs. a bottom of 75% in April 2020).
Learning to live with endemic COVID will take time so the rebound will be sluggish.