Bloomberg and an associated company teamed up to analyze how Americans are using, or visiting, or interacting with, a number of institutions in our society, and compared it to pre-COVID-19 figures. The results are eye-opening.
By counting phone signals in 15 designated areas each day for the past three months, the data offer a way to see how many people are returning to where they eat, play and spend money — at mega malls, upscale retail streets and nightlife hotspots. Golf courses are humming again, but so are the nation’s non-profit food banks, underscoring the gap between the haves and the have-nots.
The picture that emerges is not of a V-shaped recovery, but of an economy that’s being reshaped, taking its time to heal and threatening to leave permanent scars.
Like a Hurricane
Months of home confinement have left many Americans itching for a night out at the bars, or maybe a getaway to one of those cities where whatever happens there stays there.
Such is the allure of Las Vegas, Nashville and New Orleans. But pedestrian traffic in the main nightlife districts in the three cities ranges from just 15% to 44% of year-earlier levels, according to Orbital’s phone tracking data.
. . .
At the other end of America’s economic strata are those who find themselves without enough money to eat. In March, nearly 200 U.S. food banks suddenly became lifelines to the thousands who never needed such assistance.
Mauled at the Malls
As many as 25,000 stores are expected to close in the U.S. in this year, mostly in shopping malls, according to Coresight Research. Bankruptcies are piling up, leaving landlords and their retail tenants to worry about the future.
At South Coast Plaza in Southern California, the Mall of America near Minneapolis and King of Prussia mall northwest of Philadelphia, activity is returning slowly but still looks down 44% to 76% from a year ago, Orbital’s phone data show. That matches up with what mall tenants are seeing.
. . .
In upscale urban shopping districts from Rodeo Drive in Beverly Hills to Chicago’s Michigan Avenue, the summer flocks of tourists aren’t materializing like usual and activity looks to be 25% to 36% of last year’s level.
There's much more at the link. Interesting and worrying reading.
What concerns me is that such economic effects aren't being correlated with the influences that may affect them. For example, if shopping districts are less patronized now than they were before, how much of that is due to lack of spending money (thanks to the economic consequences of COVID-19), and how much due to a lack of security in big-city environments? If rioting mobs can strip Chicago's Magnificent Mile bare, what hope do the stores there have of persuading regular shoppers to return? I'd say it's likely that the lack of security is a dominant factor, but I can't be sure about that, because we simply don't know the facts.
Wolf Street provides correlation of the Bloomberg report from other data sources.
... foot traffic in Kansas City is 74% of where it was in the week ended January 15; and ... in San Francisco, foot traffic is 43% of where it was in the week ended January 15.
. . .
Foot traffic into the security zones of airports – the TSA’s daily checkpoint screenings, a real-time indication of how many people are flying – shows similar stall in the recovery, but a much lower levels, still down about 70% from a year ago.
. . .
Office occupancy collapsed in March and April as people stopped going to the office, and the 10-metro average hit a low of around 15% – meaning that office occupancy, as measured by employees entering the office, was down 85% from pre-Pandemic levels. Then there was a mild recovery. But the recovery stalled in mid-June. The average of the top 10 metros (red line in the chart) is at 22.6%, just below where it had been in the week of June 17.
Again, more at the link.
I think security - physical security - is going to be a dominant factor, reshaping the way many of us live, particularly in larger cities. ASM286, blogging at Borepatch's place, quotes Detroit mayor Coleman Young on the impact of the 1967 riots there:
The heaviest casualty, however, was the city. Detroit's losses went a hell of a lot deeper than the immediate toll of lives and buildings. The riot put Detroit on the fast track to economic desolation, mugging the city and making off with incalculable value in jobs, earnings taxes, corporate taxes, retail dollars, sales taxes, mortgages, interest, property taxes, development dollars, investment dollars, tourism dollars, and plain damn money. The money was carried out in the pockets of the businesses and the white people who fled as fast as they could. The white exodus from Detroit had been prodigiously steady prior to the riot, totaling twenty-two thousand in 1966, but afterwards it was frantic. In 1967, with less than half the year remaining after the summer explosion—the outward population migration reached sixty-seven thousand. In 1968 the figure hit eighty-thousand, followed by forty-six thousand in 1969.
It's no longer just "white flight", of course - it's the flight of economically self-sufficient people of all races from the rioting mobs who expect the authorities to support their lifestyle and put up with their nonsense. People with sense won't shop in riot-torn areas, won't travel to cities where that sort of danger is more likely, and won't spend their money there either. More and more, average Americans are voting with their feet, as we've discussed in these pages on several occasions. I think the exodus is growing by the day.
Cities who, by their tolerance of riots and unrest, have caused that exodus, will probably (and real soon now) rue the loss of ratepayers and consumers that it represents - because there's nothing and no-one to replace them.
Peter
