Here is a quick snapshot of what some of the timeliest releases say:
U.S. growth may have peaked, but what a peak: After rising the most on record to near 12% in late April, the New York Fed’s Weekly Economic Index of ten weekly series has moderated to 10% in late June. This means Q2 likely marked the apex for growth this cycle, but is still on track for a brisk 8% or more annualized pace in Q3.
U.S. consumers are coming down to the stratosphere: The Chicago Fed’s new weekly retail sales index (derived from credit and debit card transactions, small business revenue, mobility data, and consumer confidence) flags a slight gain in the Census Bureau’s June retail sales report. This, coupled with another big reversal in unit auto sales from April’s 15-year high, means that consumers ended the quarter on their backheels. But note that consumer spending still likely rose 10% last quarter, so the descent is from Everest-like levels. We’ll have a close eye on this index in July when two opposing forces will buffet shoppers: the arrival of monthly expanded child tax credit payments for millions of households, and the end of expanded unemployment insurance benefits for millions of persons in more than half of the states.
Don’t write off urban housing markets just yet: A rapid decline in San Francisco’s resale housing inventory testifies to the pervasiveness and durability of the current housing boom. The city was hit hard by the pandemic as teleworkers fled to cheaper locales. Tight inventories across the nation mean buyers won’t be getting much relief for a while.
King of the road: U.S. gas station spending has returned to normal, while driver mobility on both sides of the border has surpassed pre-virus levels. Although many workers have yet to go back to the office, more are opting to drive to work rather than take public transportation, while many hybrid-teleworkers are commuting from a farther distance. Moreover, tourists are taking more road trips rather than travelling abroad. It will be interesting to see whether these trends persist long after the pandemic passes.
Hotel comeback: All those extra road trips have been a salve for the struggling hotel industry, as business travel remains MIA. U.S. hotel occupancy is moving quickly toward normal rates, with the June 19 week now just 10% below the same period in 2019.
U.S. airlines take flight: Domestic tourists are taking to the skies in a big way in the U.S., with passenger travel gaining altitude at 78% of 2019 volumes in late June. While Canadian volumes are showing signs of improvement, they remain mostly on the tarmac at below 20%.
Back on the menu: The number of seated diners has normalized across much of the U.S., while most Canadian cities are back to the highs reached before the recent round of closures (Edmonton is one of the few cities back to normal). This testifies to strong pent-up demand for deferred services. The pandemic likely didn’t radically change our eating habits, though some people may continue to practice their newfound culinary skills.
Reopen and they will come: Despite lagging in Ontario, retail and recreational mobility in Canada is rising strongly and approaching U.S. levels, confirming that the economy can quickly bounce back when allowed to.
Workers really, really wanted: Job postings in the U.S., Canada and many other countries far exceed pre-pandemic levels and continue to rise fast, indicating that labour shortages might be worsening. Job postings compiled by Indeed are 34% above pre-pandemic levels in the U.S., while Canada isn’t far behind at 30%. This development poses a risk to both the inflation and economic outlooks.
Bottom Line: The latest real-time data largely support our view that the U.S. economy is climbing down from a high mountain but still has a lot of energy for the long hike ahead, while Canada is on the cusp of a rapid revival as it surpasses its neighbour in vaccine distribution and reopens again.