According to the figures, the US looks much better than a few months ago. Unemployment claims dropped to the lowest levels of the pandemic; Vaccines against COVID-19 went to arms at a record rate.
But we’ve seen how that goes. The virus spreads in waves that recede and then return, often stronger. Some areas of the US are experiencing their fourth wave of coronavirus cases.
Vaccines supposedly break this cycle. And maybe yes. Unfortunately, it seems less likely, as demand for vaccines shows signs of a peak.
This means that some establishments will close or soon close their doors … to mass vaccinations.
According to CDC data, approximately 142 million had received at least one dose of a COVID-19 vaccine in the United States on April 27.
This is great news. Most seniors and others who are most severely affected by the virus are now much safer. But getting the vaccine for everyone is proving to be a bigger challenge. Some states even have overdoses.
As a result, some 200 million Americans have not received a single dose of vaccine. They are still vulnerable and can continue to spread the virus.
Survey data indicate that between 10% and 15% of U.S. adults do not want a vaccine. Another 10% to 15% is available, but in “wait and see” mode.
There may be nearly 80 million people who will not be vaccinated this year, even if they are available.
And we haven’t even done that it began vaccinate children under 16 years of age. They can carry the virus, even if it doesn’t make them sick so often. The FDA may soon approve a vaccine for children, but it will take time to administer so many doses.
This creates an interesting new dynamic for the economy.
- Vaccinated people can resume more normal spending patterns, especially (though not perfectly) safe from COVID-19.
- Unvaccinated people still have a high risk of infection. But their economic activity may not change much, as many have circulated normally all along.
This seems to point towards recovery. But there are complications.
We don’t know how long vaccinated people will return to normal life. Yes, they are much safer now, but the fact that they have had trouble getting vaccinated says they are prudent. Some may continue to be so. And their habits may have changed over the last year.
As for the unvaccinated group, some probably had COVID-19 before, they may not have known about it. They should have some degree of immunity.
But this will leave a large group of not vaccinated, not previously infected Americans. They have no immunity … and society has abandoned many of the measures that had been protecting them, such as masks and capacity limits.
The virus seems likely to find most of this group. Experience says that some percentage will get sick. A smaller percentage will die.
It may also be more than we think.
CDC says about 81% of Americans over the age of 65 are vaccinated. That leaves about 11 millions older unvaccinated Americans. Little will prevent the virus from reaching them and they have the highest mortality rates.
After more than a year of caution, most Americans want normalcy. They have no humor to take more closures or take care of masks, even if the governors order it, which is doubtful. But the vaccine-reluctant population is large enough to prevent herd immunity.
This means that the next stage will be selective pandemic. Some will be safe, some will not. How will this affect consumer spending?
He optimistic I will see: Vaccinated people will return to normal and unvaccinated people will continue to do as they have been. Some will get sick, but hospitals can cope with them. The economic recovery will continue as the virus fades.
He pessimistic I will see: While vaccinated people can go out and spend more freely, it will not resemble their pre-2020 activity because they fear vaccine variants and failure. Meanwhile, the unvaccinated will gradually develop herd immunity in the most difficult way.
We’ll see what happens. The problem is that Wall Street and many small business owners anticipate not just a normal summer, but also one national box office boom. Some hire people, increase capacity and buy inventory as if the traditional holiday spending happened in July.
It could happen. Vaccination progress can be maximized, but it will not stop. Schools, institutes and employers may force some otherwise reluctant people to achieve this. Perhaps, combined with a previous infection, vaccines will end the fear of fear and the economy will continue to move forward.
In my opinion, it is much more likely that there will be some kind of uneven recovery, half recession. It will be better than 2020, but more of a lament than a boom.
And keep in mind that the U.S. economy depends on the rest of the world economy and most of the world doesn’t even have it. it began vaccine.
Can the United States maintain a historic boom while our main trading partners remain paralyzed by the pandemic? I don’t see how. This would mean that the boom, if any, would not last long.
It will finally arrive. But probably not this year.
My colleague John Mauldin predicts an unprecedented crisis that will lead to the greatest depletion of wealth in history. Most investors are unaware that the pressure is increasing at the moment. More information here.