Five Alternative Data Points to Watch
in the Covid-19 Economy
in the Covid-19 Economy
Lag times in traditional metrics create an opening for other
ways to measure the state of the U.S. economy.
ways to measure the state of the U.S. economy.
By James Greiff
July 16, 2020, 12:00 PM GMT+1
James Greiff is an editor for Bloomberg Opinion. He was Wall
Street news team leader at Bloomberg News and senior editor for Bloomberg
Markets magazine. He previously reported on banking for the St. Petersburg
Times and the Charlotte Observer.
Street news team leader at Bloomberg News and senior editor for Bloomberg
Markets magazine. He previously reported on banking for the St. Petersburg
Times and the Charlotte Observer.
During normal times, traditional economic data work fine,
offering reliable insight into growth, employment, prices and all sorts of
other aspects of the U.S. economy. The drawback is that delays of as long as a
month or even a quarter make some of the data of limited use during times like
these, when a pandemic has thrown the entire economy off kilter. So there's a
case to be made for the merits of alternative
data — everything from new infection rates to apartment rental rates
near college campuses — which can offer daily reads of the state of the
economy, provided they are used with the appropriate caveats. We recently asked several
Bloomberg Opinion writers to cite some of the non-conventional metrics they're
paying attention to during the coronavirus recession.
offering reliable insight into growth, employment, prices and all sorts of
other aspects of the U.S. economy. The drawback is that delays of as long as a
month or even a quarter make some of the data of limited use during times like
these, when a pandemic has thrown the entire economy off kilter. So there's a
case to be made for the merits of alternative
data — everything from new infection rates to apartment rental rates
near college campuses — which can offer daily reads of the state of the
economy, provided they are used with the appropriate caveats. We recently asked several
Bloomberg Opinion writers to cite some of the non-conventional metrics they're
paying attention to during the coronavirus recession.
Mohamed A. El-Erian
writes about economics, markets and central banks for Bloomberg Opinion. He is the chief economic adviser at Allianz
SE, the parent company of Pimco, where he served as CEO and co-CIO:
writes about economics, markets and central banks for Bloomberg Opinion. He is the chief economic adviser at Allianz
SE, the parent company of Pimco, where he served as CEO and co-CIO:
As many traditional data reports are deemed mostly out of
date even before they are released, economists have had no choice but to expand
the data they monitor and how they are analyzed.
date even before they are released, economists have had no choice but to expand
the data they monitor and how they are analyzed.
This means paying a lot more attention to higher-frequency data, such as daily
mobility indicators, retail traffic and restaurant dining.
mobility indicators, retail traffic and restaurant dining.
Second, epidemiological
metrics -- the coronavirus R-naught infectious rate, hospitalizations and
fatalities -- are critical to follow for their insights into key influences on
household and business behavior, as well as the thinking and actions of policy
makers.
metrics -- the coronavirus R-naught infectious rate, hospitalizations and
fatalities -- are critical to follow for their insights into key influences on
household and business behavior, as well as the thinking and actions of policy
makers.
Measures of financial
resilience and solvency become even more important given uncertainties
about how long we will be living with Covid-19. In addition to the usual
balance-sheet data, debt rollovers and access to new financing, this expands to
include highly micro anecdotal indicators such as the number of people
turning to food banks.
resilience and solvency become even more important given uncertainties
about how long we will be living with Covid-19. In addition to the usual
balance-sheet data, debt rollovers and access to new financing, this expands to
include highly micro anecdotal indicators such as the number of people
turning to food banks.
None of these measures are perfect. Moreover, they don’t
make up for the inaccuracies that accompany virtually any forecast these days.
But they do help to shed more light on our unprecedented economic situation, as
well as help shape the questions we should be asking.
make up for the inaccuracies that accompany virtually any forecast these days.
But they do help to shed more light on our unprecedented economic situation, as
well as help shape the questions we should be asking.
Data compare the same day of the week with the week in the
previous year. The data are based on a sample of about 20,000 restaurants that
provide OpenTable with information on their inventory.
previous year. The data are based on a sample of about 20,000 restaurants that
provide OpenTable with information on their inventory.
Jim Bianco writes
about markets and economics for Bloomberg Opinion. He is the president and
founder of Bianco Research, a provider of data-driven insights into the global
economy and financial markets:
about markets and economics for Bloomberg Opinion. He is the president and
founder of Bianco Research, a provider of data-driven insights into the global
economy and financial markets:
As summer turns to fall, attention will turn to the presidential election. How should
investors measure the horse race? More importantly, how can one judge if an
event is changing the outlook for the election? Enter the betting markets, such as the political
betting site predictit.org.
investors measure the horse race? More importantly, how can one judge if an
event is changing the outlook for the election? Enter the betting markets, such as the political
betting site predictit.org.
First, how should betting markets be viewed? Simply that
they reflect the aggregation of all known information into one probability.
So, they act like real-time polls, reacting quickly to new events.
they reflect the aggregation of all known information into one probability.
So, they act like real-time polls, reacting quickly to new events.
The chart below shows the betting spread for who will win
the presidency, Donald Trump or Joe Biden. Biden
is essentially a 60-40 favorite to win. The trend in these numbers can tell
us a lot: Trump had a bad June but the worst, for now, may be over.
the presidency, Donald Trump or Joe Biden. Biden
is essentially a 60-40 favorite to win. The trend in these numbers can tell
us a lot: Trump had a bad June but the worst, for now, may be over.
What is the probability that either one of them wins the
election? One can pay expensive Washington consultants, or create complicated
computer models. Or, they can check the betting market and in 10 seconds get
the same information.
election? One can pay expensive Washington consultants, or create complicated
computer models. Or, they can check the betting market and in 10 seconds get
the same information.
Tim Duy writes about
the economy and Federal Reserve for Bloomberg Opinion. He is a professor of practice and senior
director of the Oregon Economic Forum at the University of Oregon: A key
feature of this crisis is the decline in population mobility as we strive to
contain the spread of the virus. That reduction is a direct reflection of
economic activity and it provides insights into the direction of the economy.
the economy and Federal Reserve for Bloomberg Opinion. He is a professor of practice and senior
director of the Oregon Economic Forum at the University of Oregon: A key
feature of this crisis is the decline in population mobility as we strive to
contain the spread of the virus. That reduction is a direct reflection of
economic activity and it provides insights into the direction of the economy.
The Dallas Federal
Reserve Mobility and Engagement Index relies on cell phone data. The index is scaled so that zero is the average
from January-February of this year and -100 is the lowest weekly for the U.S. For
the nation, the index hit a low on April 11 and then began recovering. This
is consistent with our understanding that many sectors of the economy bottomed
out in mid-April. After that, a gradual reopening began. Subsequently released
data such as retail sales confirmed this trend. But the index stopped rising in the week ended July 4. This likely
reflects a surge in cases in some stages such as Texas, slowing the economic
recovery. This may be an early indication that the pace of gains in traditional
metrics such as the employment report will soon ebb. This would be consistent
with predictions that full recovery will only come after the virus is
contained to the point where we can freely move and interact as we did before
the pandemic.
Reserve Mobility and Engagement Index relies on cell phone data. The index is scaled so that zero is the average
from January-February of this year and -100 is the lowest weekly for the U.S. For
the nation, the index hit a low on April 11 and then began recovering. This
is consistent with our understanding that many sectors of the economy bottomed
out in mid-April. After that, a gradual reopening began. Subsequently released
data such as retail sales confirmed this trend. But the index stopped rising in the week ended July 4. This likely
reflects a surge in cases in some stages such as Texas, slowing the economic
recovery. This may be an early indication that the pace of gains in traditional
metrics such as the employment report will soon ebb. This would be consistent
with predictions that full recovery will only come after the virus is
contained to the point where we can freely move and interact as we did before
the pandemic.
Conor Sen is a
Bloomberg Opinion columnist focusing on labor and financial markets and the
economy: Perhaps no measure of the economic recovery is more important than the
rebound in employment. The official
data we get on a weekly basis is jobless claims, which tell us something about
the number of workers being laid off but nothing about employers posting jobs
or hiring people.
Bloomberg Opinion columnist focusing on labor and financial markets and the
economy: Perhaps no measure of the economic recovery is more important than the
rebound in employment. The official
data we get on a weekly basis is jobless claims, which tell us something about
the number of workers being laid off but nothing about employers posting jobs
or hiring people.
It's for that reason that weekly online job postings data from Indeed, written up by its chief economist, Jed Kolko, are so
valuable. What we're seeing so far is a gradual improvement, much as we've seen
from some other indicators. What's critical is that through the week of July
3, there hasn't been much difference in the pace of recovery between virus
hotspots and non-hotspots. This may change in the weeks ahead, but it does
suggest a durable recovery is taking hold.
valuable. What we're seeing so far is a gradual improvement, much as we've seen
from some other indicators. What's critical is that through the week of July
3, there hasn't been much difference in the pace of recovery between virus
hotspots and non-hotspots. This may change in the weeks ahead, but it does
suggest a durable recovery is taking hold.
Scott Kominers is a
Bloomberg Opinion columnist, writing about economics and markets. He is the MBA Class of 1960 Associate
Professor of Business Administration at Harvard
Business School, and a faculty affiliate of the Harvard Department of
Economics:
Bloomberg Opinion columnist, writing about economics and markets. He is the MBA Class of 1960 Associate
Professor of Business Administration at Harvard
Business School, and a faculty affiliate of the Harvard Department of
Economics:
Throughout the Covid-19 lockdowns, delivery services have seen huge spikes in demand. Watching whether
that changes during the next few months will give us a sense of how consumers
are responding to staged reopening measures: are they going out or staying hunkered
down at home? As the table below shows, grocery delivery has soared as people
have avoided trips to supermarkets; the same is true in other categories. In the meantime, looking at who is providing
delivery services can help us understand which businesses have managed to
adjust their operations creatively during the pandemic. (Some more expensive
sit-down restaurants, for example, have started offering delivery or take-out
options for the first time.)
that changes during the next few months will give us a sense of how consumers
are responding to staged reopening measures: are they going out or staying hunkered
down at home? As the table below shows, grocery delivery has soared as people
have avoided trips to supermarkets; the same is true in other categories. In the meantime, looking at who is providing
delivery services can help us understand which businesses have managed to
adjust their operations creatively during the pandemic. (Some more expensive
sit-down restaurants, for example, have started offering delivery or take-out
options for the first time.)
As more businesses start opening up, looking at how many
hours they're in operation each day will give further insight into consumer
sentiment and business owners' demand expectations, especially in urban areas.
hours they're in operation each day will give further insight into consumer
sentiment and business owners' demand expectations, especially in urban areas.
This column does not
necessarily reflect the opinion of the editorial board or Bloomberg LP and its
owners.
necessarily reflect the opinion of the editorial board or Bloomberg LP and its
owners.
To contact the author of this story:
James Greiff at jgreiff@bloomberg.net
To contact the editor responsible for this story:
Beth Williams at bewilliams@bloomberg.net
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