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I’ve been hunting for solid economic data on Utah for months.
After all, my assigned task is to explain the impact of the coronavirus here, and clearly, the pandemic is having a huge impact on our economy.
But most of the data is hidden: if you have access to really good economic data, you can sell it for a bundle to interested companies.
Oh, sure, you can get bits and pieces: obviously, the government releases unemployment claims, for example, along with some other limited information. But those stats are watched with an eagle eye by market analysts, government officials, and journalists alike, so as soon as they’re released, they’re reported and dissected. I wanted to show you something new, something that really explained what we are all going through.
I have been able to find some morsels of economic information nationally. One of my favorites to watch has been the Bank of America spending tables, which show how much Americans who use Bank of America are spending in each category.
Bank of America spending data
It’s really interesting, actually. Airlines are actually losing money to people’s credit cards most days, having to give refunds to people who aren’t taking flights. Things are really bad for the hotel and entertainment industry as well. In general, spending is down for a lot of industries.
But there are sectors that are doing really well. Online electronics, like video games? People need something to do while they’re stuck at home, and so sales have exploded. Online shopping in general, in fact, has nearly doubled.
Grocery stores are doing well, but so too is your local home improvement store: with little else to do, people are picking up projects in their yards and around the house. The pandemic hasn’t been good for business overall, but it’s certainly been good for some businesses in particular.
But this data isn’t specific to Utah, and we know how differently the coronavirus has hit our state compared to others. Utah still ranks in the bottom five in terms of deaths per capita, and below average in terms of cases. Things are relatively good here — but how much has it impacted the economy anyway?
My breakthrough came this week. The Opportunity Insights team, a nonpartisan research institute at Harvard University, contracted with various businesses with economic data on the pandemic, then just released it all to the public. Most of the data is day-by-day, so we can see how the economy changed as the pandemic unfolded.
As an introduction to this data source, let’s first look again at consumer spending. Opportunity Insights got this from Affinity Solutions, which tracks card-based transactions in the U.S. They have data for each state, and Utah’s trendline mostly matches with that of the United States as a whole.
Graphic by Christopher Cherrington
But when you break it down into separate categories, you start to notice some differences. The most obvious is in the grocery category, where Utahns hit grocery stores hard in two waves. First came a wave of shopping from Feb. 26 to March 10, one that surpassed the rest of the country when panic started with regards to toilet paper shortages. Then, at the beginning of the shutdown, Utah residents spent oodles of money at grocery stores again, perhaps getting the rest of their supplies this time.
In other sectors, Utahns have spent significantly less on apparel and general merchandise than their American counterparts throughout the pandemic. But health care spending has stayed more similar to pre-pandemic days than in other places.
Interestingly, the big decrease in consumer spending has hit small businesses harder nationwide. But in Utah, small businesses were less likely to be impacted severely than their bigger counterparts. This data is collected by Womply, a “business management solution” that has access to its customers’ revenue totals.
As of April 25, the last day for which we have data for this category, U.S. small business revenue was down about 40%. But in Utah, the decrease was less than 10%. That’s a huge difference! For whatever reason, Utahns are supporting their small businesses pretty well.
Graphic by Christopher Cherrington
At first, I thought that the difference might be an artifact of Womply’s data — that Womply customers in Utah were somehow skewed towards less-affected industries. But then I looked at additional data provided on the Opportunity Insights tracker from Homebase.
Homebase is a company that essentially makes a fancy time clock app for connected small businesses: employers can create schedules for their employees’ shifts, then those employees can clock in and out when they arrive to work and leave each day.
The upshot is that they have a lot of data about how many hours were worked in small businesses around the country. And again, the difference between Utah and the rest of the country is massive.
When things were at their worst, hours worked in U.S. small businesses declined by 60% — but in Utah by only 36%. As of May 9, our most recent data, hours worked at small businesses were down less than 20% in Utah, compared to nearly 47% nationally.
Graphic by Christopher Cherrington
You might be tempted to say that this difference is the result of Gov. Gary Herbert’s decision to never enact a formal stay-at-home order, only a directive that wasn’t ever enforced. Given Utah’s reasonable number of coronavirus cases since, I think the governor made a defensible decision in retrospect.
But interestingly, one of the key insights into all of this data is that government orders haven’t seemed to have a huge impact on consumer or business behavior. If they did, you would expect to see significant downward jumps in the data after the orders were implemented and significant upward jumps when the orders end. But these charts don’t show that.
What did seem to matter was school closures and the economic stimulus money. And that makes some sense: parents can’t go to work when their kids are at home, and they can’t spend money until they have it.
This pattern repeats itself in all states. As the Opportunity Insights team puts it in their paper: “the primary factor limiting economic activity are choices being made by individuals and businesses in response to the threat of COVID-19 itself, as opposed to government policies that impose restrictions on economic activity.”
I don’t want to argue against these government orders in general: I think they can be useful in preventing those fringe businesses and individuals who don’t pay attention to the evidence from hurting the community at large. But clearly, they’re not the biggest factor in the decisions people make. Instead, that’s their individual assessment of the virus’ danger.
The damage done by the pandemic to Utah’s economy has been significant, to be sure. But overall, the situation is much better here than elsewhere — and that’s because we’ve done a pretty good job of managing the disease’s spread so far.
