Last update: September 15, 2020
The VP Bank Crisis Barometer falls sharply in a weekly comparison. This is the first significant setback since the bank was launched. All the high-frequency data is noticeably declining. It appears that the end of the US summer season played a major role in this development. The improvement in passenger data at US airports, which we reported on the previous week, has reversed itself. The observed upturn is likely to be mainly related to Labour Day in the USA have confessed. The latter is considered the unofficial end of the US summer season. The Labour Day week is often extended and used again for holiday trips.
The summer season and catch-up effects after the strict containment measures seem to have recently overshadowed the actual level of activity in the US economy. But this seems to confirm our long-held view that prove them true: The autumn will show how the global economy is really doing. Our barometer now reveals the real situation unvarnished. This can be seen in a wide range of data. Important leading economic indicators have recently changed either improved only slightly or were already declining again. The pace of recovery in the industrial sector is now showing signs of slowing down sharply after the brilliant growth rates following the end of the containment measures. The US Industrial production, for example, grew by only 0.4% in August compared to the previous month. The picture is similar in Europe. To put it in medical terms: The acute pain is over, chronic tensions are now becoming apparent.
On the barometer: The measures taken to control the spread of the coronavirus have been drastic. The global economy is severely impaired, resulting in an unprecedented drop in gross
domestic product (GDP). The question is now, how fast the economy will rebound if the restrictions are lifted.
The VP Bank Corona Crisis Barometer tracks how well the economy is recovering.