Every Sunday night we look at traffic congestion data to assess how the global/US economy is recovering from the COVID Crisis. We typically use crowdsourced TomTom GPS data for this analysis, but today we will branch out and use Apple Mobility data instead. This source allows us to see not just traffic congestion but also foot traffic and mass transit usage as well. Apple aggregates requests for directions in its Maps App and then present the data daily.
We will focus today on 4 global cities, and there are 2 issues we need to consider. First, there is a widespread belief that cities (especially New York) are essentially economic dead zones just now. Second, cities – no matter where they are located – are important national economic hubs. Even if video conferencing can do 80% of the heavy lifting to get a given country’s economy back on track, the other 20% still happens in person.
Let’s start with the Apple Mobility chart for Tokyo, which (fun fact) is the world’s largest city by GDP:
That looks quite good – both Tokyo mass transit and driving congestion is higher than Q1 2020. Walking/street congestion is only flat with the start of the year, but we would attribute that to reduced global tourism (especially from China).
Moving on to New York City, where we have an edge in assessing the data because we see it every day:
This graph is consistent with our experience: surface street congestion is quite high until about 7pm, and we see a lot of carpooling during morning/evening commutes. This is especially true on the East Side of Manhattan, with workers who live in Queens/Brooklyn and Nassau/Suffolk county traveling to the city by car.
But it is the purple “transit” line that tells an equally valid story: there don’t appear to be anywhere near as many people in midtown office buildings during the week as pre-COVID. Many of those workers used mass transit before the pandemic, but a lot have chosen to continue to work from home. The effect on US GDP is not large – most of New York’s contribution to national economic output is in finance and professional services, both of which are very Zoom-friendly industries. But it is certainly noticeable if you live here.
The takeaway here pops out when you compare New York to Tokyo, because Gotham’s data looks nothing like the Japanese capital. One looks normal, the other clearly has a long road ahead of it before it recovers its pre-COVID vibrancy.
Let’s move on and consider two other global cities with high GDP contributions to their respective counties: Paris and London.
First, the City of Light:
And next, the home of Big Ben:
If you’ve been to Paris in August, you know why the data looks as it does. The French vacation season is sacrosanct. We’ve included a link to Apple Mobility below, and if you put in “Nice, Cote D’Azure” you’ll see where all the Parisians have gone. By every measure, the Riviera is hopping and that’s a good sign regarding the French economy.
London, on the other hand, looks much like New York and for similar reasons.
Pulling these 4 charts together, we have one important takeaway we’ve mentioned in past notes but want to reiterate: to use this data intelligently you need to consider seasonality. We see many market watchers mistakenly think real-time data is gospel, not realizing it does not (like many standard economic measures) adjust for wide differences in month-to-month seasonal variations.
In New York, for example, August is a very quiet month (not Paris-type quiet, but close). Compounding that this year is the lack of in-office activity and almost non-existent tourism. But to see NYC traffic at levels similar to Q1 is actually an upbeat reading once you understand normal seasonal patterns.
Conclusion: as with our discussion of US election odds making in “Markets”, we encourage you to look at trend lines more than levels as you examine any real-time economic data and also consider what role seasonality might play in unexpected results. By our reckoning, the global traffic data we’ve shown you here tells a decent story and we remain optimistic it will continue to improve over the rest of the year.
Apple Mobility: https://covid19.apple.com/mobility