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Texas-based Patrick Watson of Mauldin Economics delves into the evidence behind how and where COVID-19 is spreading in the US

Texas-based Patrick Watson of Mauldin Economics delves into the evidence behind how and where COVID-19 is spreading in the US
Photo: AFMC.

By Patrick Watson*

COVID-19 cases are growing fast in large parts of the US. The same folks who said the virus would just go away now say not to worry because fewer people are dying.

A lower mortality rate helps, but it’s still too high. The sheer number of sick people is straining hospital capacity some places. Viruses don’t care what anyone thinks; they just spread until something stops them.

The economy can’t recover if people fear infection everywhere they go. We need to balance public health and economic necessity.

Fortunately, scientists are learning how to reduce risk with fewer economic side effects.

The funny part: This knowledge isn’t all coming out of laboratories. It’s the result of unplanned, large-scale experiments on people who didn’t even know they were “test subjects.”

But whatever the source, we’d better pay attention. It offers a way out of this mess.

Outdoor conditions

Following the May 25 killing of George Floyd by Minneapolis police, large protests erupted around the country, featuring exactly the kind of crowds experts had called dangerous even with masks. More virus cases seemed likely.

We know the COVID-19 virus incubates for up to 14 days after exposure. So if the protests caused significant virus spread, it should be evident by now in Minnesota, where the initial protests occurred.

Here’s the data.

Minnesota’s average daily case count, which had been declining, turned slightly upward in mid-June, about three weeks after the protests began. These could be infections acquired at those events.

However, Minnesota’s case growth was still minor compared to Florida and Texas over the same period. Other places with large protests, like New York and Washington, DC, saw flat or declining infections.

That suggests the virus doesn’t spread easily outdoors if people take simple precautions, like wearing masks. Many protestors did and it seemed to help.

But the virus clearly is spreading. If the protests didn’t cause it, what did?

Hazardous bar tabs

The governors who let businesses begin reopening in May probably didn’t think of it as “research.” Nor did their citizens want to be guinea pigs. But that’s what happened.

State reopening guidelines tried to address what we know: Crowds are hazardous. Masks and distance are the best solutions. But that’s hard in places like restaurants and bars. You can’t eat or drink through a mask.

So states required those businesses to operate at reduced capacity and maintain separation between parties. This was supposed to get them back in operation while minimizing infection risk.

That was weeks ago. Millions of people have now eaten in sit-down restaurants, and the data doesn’t look good.

JPMorgan Chase, a large credit card issuer as well as an investment bank, analyzed spending data for its millions of customers. It shows the businesses where people used their cards. It also shows whether the card was physically present or the transaction occurred online.

They found a high correlation between “card-present” restaurant spending and higher COVID-19 cases in the same state three weeks later. More telling, the data showed fewer cases in places with higher grocery store spending (and, presumably, more meals at home).

As we always say, correlation isn’t causation. But this suggests a connection, at least.

Governors like Greg Abbott (R-TX) appear to see it. He recently ordered bars closed and kept restaurants at 50% capacity. We will know in a few weeks if it helps.

There’s also evidence air conditioning could be a factor, in part because it encourages people in hot climates to stay indoors where the virus thrives. That seems to fit the timing, too. Cases declined in the southern US during moderate spring weather, but are now rising as summer heats up.

It also raises a question for fall, when many schools and colleges plan to resume in-person, indoor classes. That may not be a good idea.

Winter is coming

Let’s review what these accidental experiments revealed.

No one thinks this virus will just “go away.” Life will be different until we get better treatments and/or a vaccine. But if these two points are correct, they offer some partial solutions.

For one, we might be able to resume some outdoor activities (concerts, sporting events) with a few modifications. Parks and beaches could be manageable risks if everyone will cooperate (which is hard, I know). This would help restore economic activity.

More broadly, spending our time outdoors this summer and fall might reduce the spread enough to make indoor life safer when winter arrives. It could have other benefits, too, as I described back in 2018 (see No Shoes, No Shirt, More Money).

On the downside, this is a serious blow to businesses that depend on indoor crowds—not just bars and restaurants but also airlines, casinos, and many retailers. Plus their employees and suppliers.

Some may be able to adapt, but not most. They will probably need additional government support to survive. That will be more feasible if we can stop throwing money in all directions and be more precise about who needs it.

The pandemic is still serious. That shouldn’t stop us from doing what we can to cushion the blow.

*Patrick Watson is senior economic analyst at Mauldin Economics. This article is from a regular Mauldin Economics series called Connecting the Dots It first appeared here and is used by with permission.

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Good piece. The US had just under 1000 deaths yesterday (the highest since June 10th) and today's number looks like it's going to be bad as well. Death rates look to be heading back up (just as many clinicians forecast they would - with the 2-3 lag following the surge in detected infections). Another 70,000 US deaths predicted by Oct 1st according to this model, and if we are back to 1000 deaths a day you can see that being the case. This epidemic just keeps roaring away, like some unquenchable fire - even prayer doesn't seem to be able to stop it! And who's even accounting for the economic costs of the morbidity that's now being identified in even 'mild' cases?…


The US had just under 1000 deaths yesterday (the highest since June 10th) and today's number looks like it's going to be bad as well.

I replied to you yesterday on this but it looks like you didn't see it. Just taking raw numbers to do with COVID can lead to wrong conclusions if you don't consider the actual context and details around those numbers.

From yesterday I said:
1. Numbers on a Monday are always low because they're after a weekend, and the numbers reported on Tuesday and the rest of the week pick up the slack from the lower weekend and Monday numbers. Deaths don't stop over weekends or Mondays but many of the people who collate and report the numbers do.
2. This last weekend was a holiday weekend in the US, 4th of July, so the numbers over the weekend and Monday were likely much more delayed than usual, hence the big uptick in the Tuesday reported deaths numbers.
3. If you add up the deaths numbers from Saturday to Tuesday last week it comes 1,706, as compared to 1,676 this week.


I agree Lanthanide and in addition to some weekly patterns, there have been heaps of daily anomalies globally too (where countries have implemented changes to diagnostic or reporting criteria). There are many countries that still don't classify or report deaths in the same way, so there are huge distortions in the data.


I am well aware of that - hence you compare the number with the number 7 days ago (to allow for the daily fluctuation and the weekly periodicity in the US data). Thus for today's data - already at 763 (and more to be added before the cut off at 1pm - I imagine it will settle at well above 800) . This number is higher than either Jun 30th (727) or Jul 1st (676), 7 and 8 days ago. That removes any potential influence of holiday reporting distorting things. The trend is up, and the 3 and 7 day moving averages will shortly reflect that.........


It is a tragedy - Today good news will be if say 900 people died compare to yesterday 907. This reflects that any bad news is good news as it is not worse and this initself is bad benchmark of good news.

Now so use to bad news that many do not realize that economy consequence of panademic will actually star to hit from September.


It really is a shame the virus response became political so quickly.

A globalised world, needed a globalised virus-pandemic response. If we had all done an immediate, short, strict lockdown early on, followed by a transitional re-opening and mass testing we would be over this already.

NZ was very quick to instigate travel bans, which received immediate condemnation from the WHO and China. NZ implemented a strict lockdown earlier (on a number of cases metric) than most of the rest of the world (ie except Israel) and yet, it could have come earlier and then the lockdown could have been much more brief.

There are plenty of opinions on the various models, treatments and CFR of the virus and of course, all of them are premature because with a new virus, you cannot understand it fully for years.

My stance that is that with a new, potentially lethal and highly contagious new virus, it is much better to overreact than under react. In worst case scenario for an underrecation policy you have millions of preventable deaths and the collapse of the world economy, possibly a war. A worst case scenario for an early overreaction is that nobody dies, the economy experiences a brief shock (and then a relief rebound) and we all just had a drill in how to respond to a virus in a globalised world so that next time a novel virus comes along (and it will) we can respond in an even more calm and orderly fashion.

It's like a fire alarm and a fire drill. Most of the time, it was nothing and you all just stood outside for a bit while the non-existent or minor fire was dealt with. And then you all go back inside and carry on with no major harm. If you didn't and there was a fire though? Tragedy.

Fire drills aren't political. Fire fighters aren't political. Fire alarms aren't political. Just basic common sense and good risk responding.


"early and hard" is JAs repetition so "NZ was very quick to instigate travel bans" should be NZ was quick to instigate travel bans


I'm not sure I quite follow nigel?

I think NZ could have gone earlier and harder but that is a comment based on the benefit of hindsight. NZ still acted more decively than most countries in policy. Unfortunately the execution of the policy wasn't anywhere near as strong. In the beginning there was basically no border control. I don't know whose job it was at that time to check on incoming self isolation plans, but they were asleep at the wheel for weeks.

But anyway, if the whole world had gone hard and gone early, as a united global virus response without making it political and hysterical, this would have all been over months ago. That's my point.

The fact that we, as a whole species, can't respond to a global threat in a united, logical way is an epic weakness.


The NZ's successful result was always going to be Jacinda's to lose. We had the tremendous advantages of being geographically isolated and a relatively small population. Such advantages can only be rivalled by Iceland.
For a while recently, it looked as though all the progress could have been undone by a few idiots walking out of quarantine; I'd like to see stiffer penalties for this behaviour like repatriation to their country of birth even if they do hold NZ residence, or longer prison sentences. I suspect that the potential gravity of people breaking quarantine, and harsh sentences if they do, has not been impressed deeply enough on these people by our woke authorities.


Given the behaviour of the people in quarantine and the governments lack lustre isolation managment it is only a matter of time before we have comunity transfer like Melbourne. It is only sensible to assume this and make your personal planning accordingly. How many times can they toss the dice till it comes up double 6 or triple 6.
If I were them I would drastically limit the number of people returning. I note that Australia, with a population of 25 million has just reduced their inflow to 4,000 per week. NZ with a pop'n of 5 million is aiming to increase ours more than this. What is wrong with this picture?
For those people with perment or or temporary residency, they should loose this permanently and be deported if they break quarantine. For born here quarantine breakers, the penalties need to be far harsher and applied without out any lienancy.
People need to be locked in their rooms with heavy gaurding for the full duration of Quantine preferably in rooms 3 to 4 stories above ground. If people do not like these conditions then they do not have to return to NZ. I note that the crew for the Avatar film were never alowed out of their rooms. Why have we now gone weak and sloppy. The cost of these measures are piffling compared to a return to lockdown.
Of course the government will not do this as it is too busy being "kind" to exert any real spine. When the enevatable occurs, I wonder how kind the public will think they are when they put us into lock down again. They will thouroughly deserve a sharp reverse in the polls. We all saw how quickly popularity can change when Jacinda came to power. That can work both ways.