Five Early-Warning Economic Indicators Show U.S. Virus Shock

Official U.S. indicators for employment, inflation and gross domestic product might seem badly out-of-date as the rapidly spreading coronavirus outbreak wreaks havoc on the economy.

Key data points after often a month behind. To give a more timely snapshot, below are five high-frequency indicators tracking how consumers are reacting to the crisis.

Consumer spending makes up 70% of the economy, so any suspension can devastate growth — or cause a contraction, as economists see as a growing risk. Some sectors are already seeing all activity stop.

1. Hotels

U.S. hotel occupancy fell to 61.8% in the week ended March 7, from 66.6% a year earlier on drops across hard-hit states like California, New York and Washington, according to industry tracker STR. In Seattle, which had the first big U.S. outbreak, the occupancy rate fell to 52.3%, the lowest among the top 25 markets. Rooms also emptied out in Southern California’s Anaheim-Santa Ana area around Disneyland, which will be closed from Saturday.

Personal spending on lodging equals 0.8% of gross domestic product, Commerce Department data show. Those expenditures could plunge by half if the Sept. 11 terrorist attacks are any guide, according to Neil Dutta, head of U.S. economics at Renaissance Macro Research.

The White House is considering a raft of measures to help the country’s hard-hit tourism industry including offering more support to hotels, as well as airlines and travel firms.

2. Retail sales

Johnson Redbook’s weekly retail sales report continues to be a bright spot showing consumers are still shopping, though they have shifted some purchases to emergency supplies in response to the outbreak.

Month-to-date sales in the week ended March 7 rose 6%, though that reflected a big increase in sales at discount stores, while department stores suffered declines. “Sales were led by pharmaceuticals, cleaning products, household supplies, consumables, bottled water and food,” the reportnoted.

3. Box office

The cinema industry, from the biggest chains to independent owners, are reducing capacity as part of the fight against coronavirus.

AMC Entertainment Holdings Inc., the market leader, said Friday that it would cut in half the number of tickets it sells for each showing, going beyond what’s required in places with restrictions on gatherings, such as New York, California and Washington.

While many are avoiding crowds as public health officials advise, the appeal of the movies matters too in drawing an audience. Studios arepushing back some major releases, such as the James Bond feature “No Time to Die” and Disney’s “Mulan,” a move likely to keep movie theater seats emptier for longer.

4. Broadway Tickets

New York Governor Andrew Cuomo closed Broadway theatersThursday and banned largegatherings to slow the spread of the virus. Performances will be suspended through April 12, according to the Broadway League. In the week ended March 8, Broadway attendance was down 6.5% from a year earlier, the group said. Even so, many hit shows like “Hamilton” were packed prior to the order.

The closure of theaters reflects a broader halt to cultural attractions. New York’s Metropolitan Museum, Carnegie Hall, and Met Opera haveshut their doors, in addition other such shuttered sites nationwide.

5. Consumer comfort

U.S. consumer confidence deteriorated for a sixth straight week, the longest such stretch since 2015, according to Bloomberg’s Consumer Comfort index. The measure of how consumers view their personal finances took a hit following the plunge in stock prices. Yet consumers are persevering and confidence remains at elevated levels compared with the last recession.

The Bloomberg weekly index was echoed by the University of Michigan’s preliminary sentiment index, a monthly report. The virus has not generated an “economic panic” similar to the run-up to the 2007-2009 recession, Richard Curtin, director of the survey, said. Additional declines in confidence seem very likely.

— With assistance by Kelly Gilblom

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