Investors looking for signs that the spread of the coronavirus delta variant is crimping economic activity, despite the lack of new widespread lockdowns, are so far finding scant evidence in the types of high-frequency economic data that exploded in popularity during the early days of the pandemic.
A recent market narrative held that even without widespread lockdowns, the spread of the delta variant was likely to result in a slowdown in activities that can be measured by a range of publicly available data, including airline passenger check-ins, restaurant reservations, hotel occupancy and others.
“We’ve not seen that same trend play out,” said Garrett Melson, portfolio strategist at Natixis Investment Managers Solutions, in a phone interview.
“What we’ve seen is sentiment is taking a hit in terms of delta fears, but it’s not really flowing through to mobility data,” he said.
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Take, for example, restaurant-reservation app OpenTable’s data on seated diners from reservations and walk-ins. As shown in the chart below, which tracks global 2020 and 2021 seatings, respectively, versus 2019 seatings, activity has stuck close to pre-pandemic levels in recent weeks.
The chart measures activity in 2020 and 2021 versus the same weekday in 2019.
OpenTable
In the U.S., Florida and Texas — two states among those hardest hit by the spread of the delta variant — restaurant bookings saw a notable decline in early August, but stabilized last week, said Aneta Markowska, chief financial economist at Jefferies, in a Monday note. And there has been no clear response in retail foot traffic, which fell in Florida but rose in Texas, and elsewhere, she noted.
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Flight and transit activity have appeared to stall, she said, along with hotel occupancy rates, but there was no evidence of harm to the labor market. The Jefferies U.S. Economic Activity Index rose modestly last week to 99.3, at the high end of its recent range, Markowska said. The index has been larglehy unchanged over the past five weeks, with gains in movement and employment offset by declines in consumer activity.
The various data have shown some signs of “flattening,” Melson said, but some of those indications are in line with seasonal patterns that investors have to be wary of when using so-called alternative data. Unlike official government releases that come with seasonal and other adjustments baked in, many such…
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