TD COVID-19 Economic Tracker 

Sohaib Shahid, Senior Economist | 416-982-2556

Uthman Adepoju, Research Analyst

Date Published: March 31, 2021

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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

Virus caseloads and deaths have declined across most advanced economies (AEs). However, several European countries are witnessing a third wave of infections, with Italy and France registering the highest cases since November 2020. This has forced some European countries such as Germany to extend lockdowns. Others, such as Italy and France, have tightened existing restrictions. As a result, social distancing remains relatively high across most European countries. On the vaccine front, Israel continues to lead, while the U.S. and UK are outpacing other AEs in the race to vaccinate their populations. Vaccine shortages have prevented Canada and the EU from catching up.

Chart one shows the daily new COVID cases reported in Canada, France, Germany, Italy, U.K, and the U.S from April 2020 through March 2021 Caseloads have dropped from their mid-January 2021 highs, however, infection rates have surged in France and Italy. Chart two shows daily new COVID deaths reported in Canada, France, Germany, Italy, UK, and the U.S from March 2020 through March 2021. The death rate due to the virus is declining with the decrease in the number of cases. Italy on the other hand is witnessing a high death rate due to the increased caseloads in recent weeks.
Chart three reports changes in community mobility when compared to the baseline in Canada, Germany, U.K, U.S., Ireland, Italy, and France from February 2020 through March 2021. The baseline is the median value during the 5 weeks Jan 3–Feb 6, 2020. Social distancing remains elevated in March due to the ongoing restrictions. Chart four reports vaccine doses administered across advanced economies (Canada, Germany, U.S., U.K., and Israel) and the world. Israel is currently leading the way, with almost 61% of the population receiving at least one vaccine dose as of March 28, 2021. Canada lags other advanced economies, having only 12% of its population to who have received at least one vaccine dose.

Emerging Markets

Daily new cases are declining in most major emerging markets (EMs), with the notable exception of Brazil, which has hit an all-time high, as it struggles to deal with a more contagious variant of the virus. Deaths due to the virus are following the same trend as infections across most countries. This is a welcome sign for nations like Mexico and South Africa where cases are falling. With declining cases, social distancing has eased across most EMs in recent weeks. Meanwhile, EMs’ vaccine rollout remains sluggish and continues to lag AEs. High-income EMs such as Chile and Bahrain are exceptions, as they continue to outpace other EMs and even some AEs.

Chart five shows daily new COVID cases reported in South Africa, Brazil, India, Mexico, and Russia from April 2020 through March 2021. New COVID cases in emerging markets surged at the start of 2021 but have decreased heading into February, with Brazil being an exception. Brazil is suffering its worst COVID period since the pandemic, with cases reaching daily highs. Chart six shows the daily new COVID deaths reported in South Africa, Brazil, India, Mexico, and Russia from April 2020 through March 2021. The death rates in emerging markets have mirrored the rise in cases, with Brazil leading the way due to the highly contagious spread of the virus in the country.
Chart seven reports changes in community mobility when compared to the baseline in Brazil, Indonesia, India, Russia, and South-Africa from March 2020 through March 2021. The baseline is the median value, during the 5 weeks Jan 3–Feb 6, 2020. Social distancing has improved marginally in recent weeks, on the back of drop in cases, but remains significantly above pre-pandemic levels. Chart eight shows vaccine doses administered across emerging markets. High-income emerging markets such as the Chile and Bahrain are having more success with their vaccine rollout, with over 33% and 28% of the population receiving at least one vaccine dose as of March 28, 2021, respectively.

United States

The January surge in infections has subsided. Still, the recent easing in restrictions has been accompanied by an uptick in cases in several states. The American labor market, meanwhile, continues to recover. Initial unemployment claims dropped by 97k in the week ending March 20 but remain well above pre-pandemic levels. With new stimulus cheques in the mail, investor sentiment has become more bullish in recent weeks. The economic data support the upbeat narrative. The New York Fed Economic Index – an indicator of the pace of economic growth relative to a year ago – broke into positive territory for the first time since March 2020. While new virus variants pose some downside risk to economic re-opening, the U.S. economy looks set to accelerate further in the months ahead.

Chart nine shows daily new COVID cases reported across U.S regions from March 2020 through March 2021. The caseload has fallen from its January 2021 high. But since several jurisdictions eased restrictions in March, infection rates have ticked up higher in recent weeks. Chart ten reports initial and continued unemployment claims from March 2020 to March 2021. Filings for initial jobless claims dropped by 97k in the week ending March 20, 2021, while continued unemployment claims fell by 101k for the week ending March 13, 2021.
Chart eleven reports the New York Fed Weekly Economic Index from March 2020 through February 2021. The index turned positive in March 2021 on the back of optimism over the economic outlook of the U.S. and the rollout of coronavirus vaccines. Chart twelve reports the weekly American Association of Individual Investors Sentiment Survey from January 2020 through February 2021. There was an improvement in the weekly investors' sentiment as optimism jumped to 2021 high, on the back of accelerated vaccine rollouts and an improved economic outlook.

Canada

New cases remain stable in much of the country but are rising in B.C, Ontario and Quebec. In Ontario, the rise is significant enough to be labeled a third wave. After setbacks in December and January, due in large part to more stringent measures in Ontario and Quebec, the Canadian labor market bounced back in February, adding almost 260k jobs. Total hours worked also continued its upward trend in the month. The trends are encouraging but both employment and hours worked remain below pre-pandemic levels. Meanwhile, spending by Canadians has improved in recent weeks on the back of eased restrictions. The housing market continues its strong upward trend, with interest in housing moving higher and now sitting at its highest level since the pandemic began. 

Chart thirteen illustrates the daily new COVID cases reported in Canadian Provinces from March 2020 through March 2021. Canada has seen a decline in cases since late-January. However, cases have been rising in B.C, Quebec and Ontario in recent weeks, with Ontario currently witnessing its third wave of infection. Chart fourteen shows employment and hours worked from January 2020 through February 2021. Employment is showing resilience while hours worked are going up. Still, employment and hours worked remain well below pre-pandemic levels.
Chart fifteen shows the year-over-year percentage change in household spending from January 2020 through March 2021. Spending declined in late-January, as new restrictions were reinstated to curb the spread of COVID. However, the recent easing of restrictions in some provinces has encouraged spending by households in March. Chart sixteen reports search interest overtime for the term

Services

Retail activity across AEs is improving on the back of falling cases as consumers gradually scale up retail and recreational activities. Restaurants continue to struggle, but warmer weather in the northern hemisphere has allowed for some improvement in recent weeks. Meanwhile, air travel has edged up as spring break approaches. Still, international travel remains stymied by tight cross-border travel restrictions in several countries. The entertainment industry continues to struggle due to the in-person nature of its business. Most countries’ box office revenues remain well below the levels seen before the pandemic.  

Chart seventeen reports retail and recreation activity compared to the baseline for Canada, Germany, U.K, U.S., Brazil, India, and France from March 2020 through March 2021. The baseline is the median value, during the 5 weeks Jan 3–Feb 6, 2020. Retail recovery declined in December and continues to remain weak in 2021, as countries maintain restrictions. Chart eighteen shows the percentage difference of year-over-year seated diners across all channels: online reservations, phone reservations, and walk-ins from February 2020 through February 2021. The restaurant industry witnessed a big drop in seated diners in 2020 compared to 2019. The weakness persists in 2021 due to continued lockdowns.
Chart nineteen shows the number of commercial flights per day from March 2020 through March 2021. The airline industry witnessed a drop in flights during the second quarter of last year with a partial pick-up during the summer months. The industry recovery continues to suffer setbacks as several countries maintain their travel restrictions. Nonetheless, an uptick in travel numbers was observed in March due to spring breaks. 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 March 2021. Box office revenues saw a drop in 2020 compared to 2019 due to the lockdowns imposed. Not much has improved so far this year due to the ongoing restrictions. Japan witnessed a rebound in October before falling due to a new surge in case, while domestic (Canada and the U.S) revenues saw an uptick in March due to eased restrictions.

Commodities & Financial Sector

Global economic recovery continues to support commodity prices, especially copper, which rose to almost a 10-year high in February before pulling back modestly in recent weeks. Gold, meanwhile, has trended lower since hitting a record-high of $2,075 an ounce in August of last year. Oil prices have hit a snag in recent weeks, falling from their high-point in early-March. Concerns over renewed restrictions and the slow vaccine rollout in Europe have contributed to the recent pullback. Meanwhile, government borrowing rates have continued to climb amid rising concerns over inflation. This contributed to an increase in financial market volatility in late-February and early-March, which has since subsided. A particularly large jump in Turkey’s borrowing costs reflects markets’ waning confidence in the Turkish Government, as it sacked the Central Bank Governor four months into his job.

Chart twenty-one shows the futures price of gold and copper from January 2020 through March 2021. Copper prices have rallied as the manufacturing sector has bounced back strongly in Asia, especially as China continues to see strong factory activity. Gold prices has trended lower since hitting a record-high of $2,075 an ounce in August of last year. Chart twenty-two illustrates Light Sweet Crude Oil Futures Prices from January 2020 through March 2021. Oil prices have rebounded strongly from the April lows but entered correction territory in March 2021, weighed down by concerns over energy demand getting depressed due to renewed restrictions and the slow vaccine rollout in Europe.
Chart twenty-three shows the interest rate for both advanced and emerging economies from February 2020 through March 2021. Some emerging markets faced high borrowing costs compared to advanced economies as capital flows receded early in the crisis. The return of capital inflows into emerging economies towards the end of last year has helped cut back borrowing costs. However, an increase in interest rates across both AEs and EMs has been observed in recent weeks due to inflation concerns. Chart twenty-four reports the Market Volatility Index from January 2020 through February 2021. Stock market volatility has subsided from its highs at the beginning of the pandemic sell-off as positive economic data and vaccine news have helped improve investor sentiment. An increase in market volatility was observed in late February and early March due to inflation concerns.
 

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