BlackRock Investment Institute

Macro insights

The link between coronavirus cases and mobility

Coronavirus infection rates are rising again in some countries – notably the U.S. – as activity restarts. Markets are laser-focused on how well governments contain such outbreaks to avoid second waves and scarring of the economy. So far, European countries seem to have been more effective in containing the renewed coronavirus outbreaks.

The increase in infection rates poses a risk for the continued restart in activity. There has been a close link between the number of infections and mobility data since the start of the crisis. The public has responded to news about the outbreak more rapidly than government guidelines have done. This relationship seems to hold as economies restart. As lockdowns have eased and mobility has picked up, the recovery in mobility has been far greater in countries reporting smaller changes in cases. See the chart below.

Change in mobility data and coronavirus cases, May-June 2020

Better success in containing the coronavirus in Europe is going hand in hand with a stronger recovery in mobility and – as a result – activity. Activity will likely take a hit if virus infection rates surge - even where governments do not reinstate lockdowns.

International organisations such as the OECD stress the risk of broad-based second waves, either later this year or early next year. This heightens the risk of permanent scarring of potential output and further exacerbates the inequalities across income levels, race and countries. See our 2020 midyear outlook, The future is running at us.

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