Comparing Drivers of Pandemic Economic Decline 2020 – NBER

The collapse of economic activity in 2020 from COVID-19 has been immense. An important question is how much of that resulted from government restrictions on activity versus people voluntarily choosing to stay home to avoid infection. This paper examines the drivers of the collapse using cellular phone records data on customer visits to more than 2.25 million individual businesses across 110 different industries. Comparing consumer behavior within the same commuting zones but across boundaries with different policy regimes suggests that legal shutdown orders account for only a modest share of the decline of economic activity (and that having county-level policy data is significantly more accurate than state-level data). While overall consumer traffic fell by 60 percentage points, legal restrictions explain only 7 of that. Individual choices were far more important and seem tied to fears of infection. Traffic started dropping before the legal orders were in place; was highly tied to the number of COVID deaths in the county; and showed a clear shift by consumers away from larger/busier stores toward smaller/less busy ones in the same industry. States repealing their shutdown orders saw identically modest recoveries–symmetric going down and coming back. The shutdown orders did, however, have significantly reallocate consumer activity away from “nonessential” to “essential” businesses and from restaurants and bars toward groceries and other food sellers.

Fear, Lockdown, and Diversion: Comparing Drivers of Pandemic Economic Decline 2020

I admit to having a short attention span.  My mind tends to wander a bit, sometimes a lot.  The reason for my cognitive wandering is usually a question which sends me down yet another path of discovery.  So here’s another post in my intermittent series on Post Pandemic Changes in Consumer Behavior

My July 4th weekend will be a quiet weekend.  I’ve downloaded the pdf of this working paper to read.  I’m hoping for some insights that I might have missed.

Scary Charts 05.06.20 — Auto Loans

Subprime Auto Loans Blow Up, Get Very Messy

US-auto-loan-deliquencies-dollars-2020-q1

Delinquencies of auto loans to borrowers with prime credit ratings were near historic lows (0.27% in March), according to Fitch data. In the pre-Virus Good Times, it was the subprime loans – with credit scores below 620 – that were blowing up…

In mid-March, the world changed for subprime lenders. Delinquencies were already exploding in the Good Times, and now they’re in utter turmoil.

In addition, it is likely that prime loans are becoming delinquent as well, as many of these people too have lost their jobs – this includes dentists and other professionals with high incomes and big debts and lots of expenses and no savings, who’d suddenly had to close their operations, and their cash flow disappeared. If they fall behind on their debts, they’ll be subprime in a hurry.

 

Significant financial stress is associated with a 13-fold higher odds of having a heart attack

Both work stress and financial stress were associated with a higher risk of acute myocardial infarction. The odds of myocardial infarction was 5.6 times higher in patients with moderate or severe work stress compared to those with minimal or no stress. Patients with significant financial stress had a 13-fold higher odds of having a myocardial infarction.

Small study with interesting findings.

Lunch Traffic Lowest in Four Decades: Out for Lunch a Dying Tradition? Demise of the “Gourmet” Burger? — MishTalk

“I like Five Guys, but I can buy ground beef and one onion and get pretty close to the same burger for half the cost,” said Mr. Cockerline, who rarely goes to Five Guys anymore. “A hamburger, to me, is not a luxury,”

Brian Cockerline 20 years young Rutgers University student

Source: Lunch Traffic Lowest in Four Decades: Out for Lunch a Dying Tradition? Demise of the “Gourmet” Burger? | MishTalk

Clearly what we have is the End of Affluence.  When I was a kid going out to eat at a restaurant was the occasional treat.  Not many families could afford eating out more than once a week.  The family cooked and ate most of our meals at home.  I’ve lived in Oklahoma for a while now.  We have basic burger platters for around $10.  But when you add in drinks and tip the cost starts to add up.  Eat out five days a week and you’re incurring substantial expense.

I’m hardly surprised at the traffic numbers.  Despite government statistics the economy is anemic.  Today’s kids are graduating from college with massive debt and a job market that is unkind.

What’s next?  Car sharing?  Multiple roommates?  Tiny homes?

An Open Letter To Tiny House Hunters – terribleminds: chuck wendig

Source: An Open Letter To Tiny House Hunters « terribleminds: chuck wendig

“Which one did they pick?”

“You fell asleep again, didn’t you?”

This post is for all of the spouses out there subjected to the nightly ritual of watching some version of a house hunting show on HGTV.

Read. Laugh. Repeat.  (don’t skip the reader comments cuz they are priceless).

Decline of the American Dream

We analyzed the cost of living and median income levels in 74 U.S. cities to find out where you can still obtain the American Dream across the country.

Source: Decline of the American Dream

Nice set of info-graphics if you’re into that method of data comprehension.

Did I mention I live and work in Oklahoma?  Check out The Housing Trilemma from an earlier post.

The Housing Trilemma | Oregon Office of Economic Analysis

Every city wants to have a strong local economy, high quality of life and housing affordability for its residents. Unfortunately these three dimensions represent the Housing Trilemma.  A city can achieve success on two but not all three at the same time.

Source: The Housing Trilemma | Oregon Office of Economic Analysis

Check out the graphic above courtesy of the Oregon Office of Economic Analysis.  I may have been biased about life in the middle but never had the facts to back up my opinions.  But after reading this article I now have facts.  This analysis demonstrates a city can have success on two fronts, but rarely on all three.

I started life in New York and grew up in New Jersey.  A sizeable amount of time was also spent in Dallas.  For over a decade I’ve held the belief that my family could not replicate our lifestyle and quality of life anywhere else in the country.  Well, I admit to being wrong.  We could probably do as well in Cincinnati, Omaha, or Des Moines.

If you can stand the weather, OKC is not a bad place to live in.

HT – Calculated Risk.