Vaccine Not Yet a Shot in the Arm for the Economy

Off the Charts: The Visual Says It All

Masked Restaurant Worker and Customer

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While many people have been hoping the COVID-19 vaccine would help save businesses hit hard financially by the pandemic, especially services like restaurants, the evidence suggests otherwise. At least so far. 

The chart below shows how spending on in-person dining has changed in the last two years, broken down by states with vaccination rates above or below 48%. It’s based on spending data released by Earnest Research last week, with vaccination rates from a New York Times analysis of data from the Centers for Disease Control and Prevention.

Consumers in states with lower vaccination rates have consistently spent more money on indoor dining than those in more heavily vaccinated states throughout the pandemic, and now they’ve returned to their pre-pandemic restaurant dining habits, the data shows. 

By contrast, states where at least 48% of the population have received the vaccine lag behind, suggesting that the vaccine hasn’t been the driver of economic recovery it was predicted to be, and that people in states with heavier restrictions during the pandemic are being more cautious as they emerge from lockdown.

Consumers began spending more on services, including restaurants and bars, in April, as they prepare for a summer out in an increasingly reopened economy. The economy has boomed so far in 2021, with consumer spending helping it grow by 6.4% in the first quarter.

But people in highly vaccinated states haven’t yet rejoined the party at the same rate as their less-vaccinated counterparts, spending less in-person and continuing to use delivery services more than they did before the pandemic. 

An analysis by Earnest Research earlier this month showed the pattern held true across other high-contact industries like travel and leisure and gyms, where foot traffic is about 20% lower in more vaccinated states when compared to their counterparts. The research also showed that vaccine rollouts correlated with politics: Almost every state that voted for Republican Donald Trump has vaccination rates below 45%, while those that went for Democratic President Joe Biden have vaccination rates above 45%.

Article Sources

  1. Earnest Research. “Dining In, Still Some Reservations.”