TD COVID-19 Economic Tracker 

James Marple, Managing Director | 416-982-2557
Uthman Adepoju, Research Analyst

Date Published: January 27, 2022

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COVID-19 has posed a unique shock to the global economy. Developments on the health and economic front are moving faster than the frequency at which most conventional economic data are released. What is more, the unprecedented nature of this crisis means that we cannot rely on past crises to benchmark economic forecasts. To bridge this gap we use available high frequency data to assess the real-time economic implications of COVID-19. This collection of charts should help guide readers through the various aspects of the crisis and recovery in advanced economies, emerging markets, and North America, as well as within the service industry, commodity markets and financial markets.

Note: This publication will be updated periodically to reflect changes in the global economy.

Advanced Economies

After spiking to unprecedented levels across most advanced economies (AEs), COVID-19 cases appear to have crested, with notable reductions apparent in the UK and Canada. France stands out in the sheer number of cases per capita, while Germany still appears to be on the upswing. As the number of cases reported hit all-time highs, hospitalization rates also moved higher, putting a strain on health care systems. Fortunately, the Omicron variant appears to cause less severe illness than prior variants, which alongside vaccinations, has resulted in lower death rates relative to cases. The U.S.’s lower vaccination rate appears to be contributing to its higher death rate relative to other AEs. The resurgent virus has led to backtracking in economic normalcy. Measures of social mobility fell across AEs at the outset of the surge. They have rebounded in recent weeks but remain below levels seen late last year. Governments of several AEs have rolled out booster shots and are enacting measures to increase vaccine uptake.

Chart one shows the daily new COVID cases reported in Canada, France, Germany, Italy, the UK, and the U.S from March 2020 through late January 2022. Caseloads surged across AEs at the start of the year, linked to the more contagious Omicron variant. However, in recent weeks it has shown signs of cresting. Chart two shows daily new COVID deaths reported in Canada, France, Germany, Italy, the UK, and the U.S from March 2020 through late January 2022. The death rate due to the virus picked up in recent weeks but remains low relative to cases.
Chart three reports changes in community mobility when compared to the baseline in Canada, Germany, the UK, the U.S., Ireland, Italy, and France from February 2020 through late January 2022. The baseline is the median value during the 5 weeks Jan 3–Feb 6, 2020. Community mobility metrics declined due to a surge in COVID cases, as some AEs tighten restrictions. They have rebounded in recent weeks but are still below levels seen late last year. Chart four reports vaccine doses administered across advanced economies (Canada, Germany, U.S., U.K., and Israel) and the world. Canada still leads the way, with over 78% of the population having two vaccine doses as of January 25, 2021. The vaccination pace has slowed across AEs.

Emerging Markets

Daily reported cases of COVID-19 have picked up across several major emerging markets (EMs) with Brazil a notable standout. South Africa is the exception, seeing a decline in infection rates in recent weeks after leading the surge. Death rates have remained low so far despite the increase in cases, but are trending higher even in South Africa. In Russia, death rates have fallen from a peak late last year but appear likely to rise again given the recent rise in cases. Social mobility has returned to pre-pandemic levels across most EMs even as cases remain elevated. On the vaccine front, EMs continue to lag advanced economies. The COVAX facility has so far shipped just over one billion vaccine doses but more is needed to close the gap. Vaccine shortages and hesitancy have limited rollout in India and Russia.

Chart five shows daily new COVID cases reported in South Africa, Brazil, India, Mexico, and Russia from April 2020 through late January 2022. Daily new COVID cases are rising across major emerging markets with Brazil leading the way. On the other hand, South Africa has seen a drop in cases in recent weeks after initially leading the surge. Chart six shows the daily new COVID deaths reported in South Africa, Brazil, India, Mexico, and Russia from April 2020 through late January 2022. Death rates are more subdued across most EMs when compared to previous case surges. Russia is seeing a drop-in death rate from its highs but could see deaths rise again given the recent increase in cases.
Chart seven reports changes in community mobility when compared to the baseline in Brazil, Indonesia, India, Russia, and South Africa from March 2020 through late January 2022. The baseline is the median value, during the 5 weeks Jan 3–Feb 6, 2020. In recent weeks, social mobility has improved in EMs after initially falling due to the surge in cases, as social distancing remains in pre-pandemic levels for most EMs. Chart eight shows vaccine doses administered across emerging markets (Chile, Brazil, Bahrain, India, and Russia) and the world. High-income emerging markets such as Chile are having more success with their vaccine rollout, with over 87.7% of its population receiving double vaccine doses as of January 21, 2022. Russia and India are below the global average amid vaccine shortages and hesitancy.

United States

Omicron variant-induced infections spread fast across the U.S. but have shown early signs of cresting. The latest wave has slowed the pace of economic progress but has not stopped it altogether. Retail sales pulled back in December, in part due to the resurgent virus, but also as consumers frontloaded holiday purchases in November in order to get ahead of potential shortages. The economy continues to add jobs at a solid clip, but there is still some way to go – total employment is over two million below its pre-pandemic peak. Initial unemployment claims fell by 30k in the week ending January 22 and are in line with levels before the pandemic. The newest wave of the pandemic is likely to exacerbate supply challenges and keep upward pressure on inflation, but nascent signs of its cresting suggest the worst is behind us.

Chart nine shows daily new COVID cases reported across U.S regions from March 2020 through late January 2022. The caseloads are declining in the US, after initially witnessing a surge at the start of 2022. This has slowed the pace of economic progress, nonetheless, the economy remains on a growth path. Chart ten reports the daily vaccines administered across U.S. regions from December 2020 through late January 2022. In late 2021, the daily vaccination pace slowly picked up from its low rates as more people got vaccinated across various states. However, the vaccination rate has slowed in recent weeks.
Chart eleven reports initial and continued unemployment claims from March 2020 to January 2022. Filings for initial jobless claims dropped by 30k in the week ending January 22, 2022, while continued unemployment claims increased by 51k for the week ending January 15, 2022. Chart twelve reports the U.S. consumer spending from January 2020 through the week ending November 14, 2021. Consumer spending has moved above pre-pandemic levels as the economy reopened with high-hit sectors making headway. Nevertheless, the recent wave of cases has slowed consumer spending.

Canada

Canada has faced its highest wave of COVID inflections yet, led by Quebec. The rise in cases led provincial governments to reimpose restrictions in late 2021. More recently, falling caseloads have led to the easing of some of these measures, though capacity limits and closures of certain high-contact businesses remain in place. The latest wave has dampened consumer spending, especially in the most directly impacted areas. Fortunately, employment continued to gain momentum through December, with 55k positions added, though a slowing in January appears likely. Canada’s high vaccination rate – over 84% of its adults (78% of the overall population) are fully vaccinated – is helping to reduce the burden of the disease on the healthcare system and should help facilitate a greater return to normalcy as cases fall.  

Chart thirteen illustrates the daily new COVID cases reported in Canadian Provinces from March 2020 through late January 2022. Canada has seen its highest wave of infection, led by Quebec. Fortunately, COVID cases have started declining in recent weeks. Chart fourteen shows employment and hours worked in Canada from January 2020 through December 2021. Employment continues to maintain momentum, increasing by 55k in December 2021. Though the rise in cases due to the Omicron variant is set to take a bite at the employment pace.
Chart fifteen shows the year-over-year percentage change in household spending from January 2020 through Mid December 2021. Consumer spending dampened in December 2021, as cases surged and restrictions were reimposed across provinces. Chart sixteen reports daily vaccines administered across Canada from January 2021 through late January 2022. Canada's vaccination accelerated in December then slowed in January 2022. However, Canada's vaccination rate remains among the highest in the world with over 78% of the population receiving two vaccine doses.

Services

The recovery in service activity has slowed across most AEs as the spread of the Omicron variant led to a pullback in mobility and constrained retail and recreational activities. Restaurants have borne the brunt, experiencing a sharp drop in bookings, especially in Canada where restrictions have been the most stringent. Air travel has also slowed as countries impose additional testing and vaccine requirements and in some cases, outright restrictions on travel from countries with high caseloads. Box office receipts, meanwhile, had shown improvement over the course of 2021, but appear to have dropped again in recent weeks in most jurisdictions.

Chart seventeen reports retail and recreation activity compared to the baseline for Canada, Germany, the UK, the U.S., and France from March 2020 through late January 2022. The baseline is the median value, during the 5 weeks Jan 3–Feb 6, 2020. Retail and recreational activities declined in January, as countries reimpose restrictions and lockdowns but have witnessed a slight uptick in recent weeks. Chart eighteen shows the percentage difference of year-over-year seated diners (across all channels: online reservations, phone reservations, and walk-ins) for Canada, Germany, the UK, the U.S., and Globally from February 2020 through late January 2022. The restaurant industry progress suffers a setback as economies re-imposed and lockdowns due to Omicron induced surge in cases.
Chart nineteen shows the number of commercial flights per day from March 2020 through late January 2022. The airline industry witnessed a setback as several countries maintain their travel restrictions amid rising COVID cases. Chart twenty shows the year-over-year percentage change of box office revenues in Japan, Germany, France, and Domestic (the U.S. and Canada) from January 2020 through late January 2022. Box office revenues picked up in 2021 as cinemas reopen across countries but dropped in late 2021, as COVID cases surge leading to restrictions being reimposed.

Commodities & Financial Sector

Commodity prices suffered a pullback at the close of 2021 but have moved higher since. Copper prices have held up despite rising inventories and concerns about flagging Chinese demand. Gold prices have picked up on the back of rising inflation concerns and U.S. dollar weakness. Oil prices have also rebounded, hitting their highest level since October 2014, underpinned by heightened geopolitical tensions and sustained demand. The VIX index – a measure of price volatility in the S&P 500 – moved to its highest level since January 2021, driven by concerns over the Omicron variant and hawkish signals by the Fed. Government borrowing costs have risen in recent weeks, reflecting signals by central banks that rate hikes are imminent. Bond yields are above February 2020 levels in most advanced economies and even higher in emerging markets, reflecting their greater risk profile in the post-Covid world.

Chart twenty-one shows the futures price of gold and copper from January 2020 through late January 2022. Gold prices have rebounded in recent weeks after their initial drop in late 2021 while Copper prices have held up despite rising inventories and concerns about palling Chinese demand. Chart twenty-two illustrates Light Sweet Crude Oil Futures Prices from January 2020 through late January 2022. Oil prices have also rebounded, hitting their highest level since October 2014 amid sustained demand and geopolitical tensions.
Chart twenty-three shows the interest rate for both advanced and emerging economies from February 2020 through late January 2022. Borrowing costs across AEs have increased in recent weeks amid hawkish signals from central banks. Borrowing costs in EMs are higher reflecting their greater risk profile. Chart twenty-four reports the Market Volatility Index from January 2020 through late January 2022. Stock market volatility edged higher as fears grow over the Omicron variant and hawkish signals by the Fed but remains relatively low.

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