Vaccinations offer the promise of an economic recovery. When enough people receive their shots, we should know how the new normal looks.
For now, it seems safe to assume that the new normal will be different than life before COVID-19. Some people will choose to frequently wear masks. Washing our hands for 20 seconds and using hand sanitizer throughout the day are probably habits we should’ve had before the pandemic.
Soon, we should have data showing how the economy will perform in the new normal. In the next three months, we should see a sharp increase in the number of vehicle miles Americans drive.
Quarterly results for this data are shown below. The chart shows a sharp spike in the second quarter of every year. Between April and June, vehicular travel picks up as families make their first trips to enjoy the summer. This also includes springtime drives to hardware stores to pick up gardening supplies and other driving.
America’s Vehicle Miles
Source: Federal Reserve.
Vehicle Miles Are Important This Quarter
The trend is clear and can be seen in the data going back to 1970. The second quarters, the yearly peaks, stand out in the chart.
Last year, the economy was shutting down in the second quarter. It will take time to recover from that, but vaccines are pushing economic recovery closer to reality.
According to Bloomberg: “In the U.S., more Americans have received at least one dose than have tested positive for the virus since the pandemic began. So far, 154 million doses have been given.
At this pace, it will take another four months to cover 75% of the population.”
The news service also notes: “COVID rates have generally flattened or declined in the four countries where enough vaccines have been given to cover at least 30% of the population.” For the U.S., that number stands at about 24%.
Good news could be right around the corner. Subjectively, an increase in traffic will tell us if America is back. Objectively, vehicle miles traveled this quarter will be important to watch.
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Michael Carr is a Chartered Market Technician for Banyan Hill Publishing and the Editor of One Trade, Peak Velocity Trader and Precision Profits. He teaches technical analysis and quantitative technical analysis at the New York Institute of Finance. Mr. Carr is also the former editor of the CMT Association newsletter, Technically Speaking.
Follow him on Twitter @MichaelCarrGuru.
