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Who cares if you don’t wear a mask to your barbecue for Fourth of July weekend? Well, Goldman Sachs does.
Heading into the holiday weekend, cases of the coronavirus are spiking in key states like Texas, Florida, California, and Arizona, which have also begun putting restrictions back in place, including on restaurants, bars, beaches, and more.
While many states don’t require wearing masks to be worn all the time, economists at Goldman Sachs wrote in a note Monday that creating a national mandate to wear masks could help prevent 5% of GDP from being lopped off, which could be the result if shutdowns were put reinstitute across the country.
Whether or not your state requires you to wear a mask at all times right now, the firm says its research suggests making it mandatory to wear face masks “could raise the percentage of people who wear masks by 15 [percentage points] and cut the daily growth rate of confirmed cases by 1.0 [percentage point] to 0.6%,” economists led by Jan Hatzius, Goldman’s top economist, wrote. Plus, the group notes the mandate “could increase U.S. Face mask usage by statistically significant and economically large amounts, especially in states such as Florida and Texas that currently don’t have a comprehensive mandate and are seeing some of the worst outbreaks.” That, in turn, could translate to lowering the “daily growth rate in the group of states without a mandate from 2.9% to just over 1%,” the firm wrote.
Beyond masks, where you eat over the weekend may also have an impact on spending trends and the spread of the virus, another Wall Street firm notes.
JPMorgan analyst Jesse Edgerton recently wrote in a report there appears to be a connection between a surge in spending inside restaurants and a surge in coronavirus cases three weeks after. In a report last week, Edgerton wrote that the “level of spending in restaurants three weeks ago was the strongest predictor of the rise in new virus cases over the subsequent three weeks,” with dining-in (versus buying food online) proving “particularly predictive” to a later spread of the virus (although he noted there were other factors at play apart from restaurant spending in states seeing spikes).
Since then, however, the firm also wrote in a separate note Wednesday that there’s been a notable pullback in spending from recent highs, based on data from 30 million Chase credit and debit card users through June 27. Of note: the slowdown was more pronounced in Texas, where cases have spiked, although Edgerton points out that the pullback is “surprisingly widespread,” and that “states like Arizona, Florida, and South Carolina are closer to the middle of the pack in their change in spending, even though they have also seen virus cases rising rapidly.”
The two reports suggest something of a Catch-22: More spending inside restaurants may contribute to a faster spread of the virus, but a pullback in spending (even in the absence of reimposed restrictions) may hamper the rebound of consumer spending, which has been on the rise again (having bounced up 8.2% in May).
For some Americans, at least, the spread of the virus may be putting a dampener on weekend plans: A Fourth of July report by Bank of America found that of the “43% of survey respondents not planning on attending/hosting a barbecue/cookout this upcoming Fourth of July, 71% cited their worries concerning the spread of COVID-19.”
That, the firm notes, might indicate a “potential consumer backslide” owing to spiking viruses cases.