Delta Variant Could Cause HVAC Spending Slump
According to a JPMorgan (JPM) Research research by senior economist Jesse Edgerton and economist Peter McCrory, increased public emphasis on the Covid-19 Delta variant has corresponded with a slowdown in expenditure in critical industries such as HVAC, energy, manufacturing, engineering, construction and industrial. COVID-19 Delta variant case numbers continue to rise fast, even in places with high vaccination rates.
Google search statistics indicate that public attention has shifted to the Delta version in recent weeks, while Chase card expenditure in some travel and leisure categories has decreased.
As reported by Chase card spending data, airline expenditure has plummeted over 20% from a mid-July peak. This is a greater decrease than the one witnessed following the winter 2020 case boom. By contrast, restaurant spending has slowed just modestly and is still much less than it was during the winter wave,” the study states.
According to a Bank of America (BAC) Global Research report authored by US economists Michelle Meyer and Anna Zhou, total card spending of the aggregated BofA credit and debit card data had significantly decelerated to a 10% two-year growth rate for the seven days ending July 31st. This is down over 8% from the prior week.
Transit and airlines had the greatest reductions in spending growth, followed by online shopping, clothes, general goods, and grocery, according to BofA’s card data. Only gas and department store sales saw a favorable improvement in their two-year growth rates.
According to the BofA report, this may be attributable to a variety of variables, including the pay period’s timing, a reversal of the Child Tax Credit (CTC) hike, or a shift in consumer behavior as a result of the Delta variation. We can still expect further decreases in spending in the future as COVID-19 spreads. And, with millions of Americans about to start losing enhanced unemployment benefits in September, the extent to which this will influence total spending is unknown.
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