One interesting insight into the economy is by looking at real-time, high-frequency data like credit card spending or restaurant reservations. During March, these measures showed that people were changing their behavior even before the federal and local governments instituted lockdowns.

For example, according to data from Facteus, spending at department stores was 67% lower on a year over year basis during the last week of March. By the end of April, it was down 47% year over year. By the end of May, it was 9%. By the end of June, it was higher by 30% which was a reflection of reopening and pent-up demand due to the shutdown and spend of stimulus checks.

While this is a picture of the whole country, it's now showing that people are changing their behavior again in areas that are seeing another spike in case counts like Florida, Texas, and California. Restaurant traffic is lower. Credit card spending data from these regions are showing another steep decline. Local governments have been encouraging mask-wearing but people on their initiative are staying home, and many businesses in those areas are not opening.

Trends

Most economic data bottomed from late-March to mid-April and since then, it's been slowly improving. However, early indications are that the ascent has now slowed especially as the pent-up bust in demand seems to have been exhausted. And it's seemingly flatlined at levels that are between 80-90% before the coronavirus. Already, cyclical stocks are beginning to turn lower which is most apparent in travel-related sectors, banks, and steel stocks.

Despite these developments, the stock market was strong the past week. One explanation is that the spiking case counts increase the odds of more fiscal and monetary stimulus. Additionally, there were a couple of encouraging reports from coronavirus vaccine candidates which showed increased antibodies in early-stage clinical trials. Further, Dr. Anthony Fauci, and NIH director, Francis Collins, gave interviews that were positive about the chances of a vaccine being available by the end of the year.

Employee Compensation

Another interesting data series is total U.S. compensation which adds paychecks and government unemployment insurance benefits. Something really interesting has happened here. During the previous recession, this series flattened out starting at the end of 2007. As the recession started going, it plunged until bottoming in the early part of 2009. Then, it started rising at a much slower ascent, until it crossed the previous peak at the end of 2011.

This time, there was a steep drop from $11.8 trillion in total compensation per month as 2020 started. Then with the coronavirus, there was a steep drop to $11 trillion. Then, the government's stimulus kicked in and the next month, total compensation increased to $12 trillion. Basically, until July, total compensation in the U.S. will be higher than it was before the coronavirus. This means the extension of unemployment insurance will be a big deal for the markets and economy, going forward.