According to a TD (TD) report, the hotel, restaurant, travel, and movie industries are demonstrating a clear rebound as businesses reopen to pre-pandemic capacity levels and the full economic brunt of the pandemic appears to have passed.
“Timely data continue to signal strong growth, with no sign of any major acceleration or deceleration in aggregate relative to 2021-to-date trends,” the report read.
In addition, the Department of Commerce’s report showed a 1.3% decline in retail purchases in May following a 0.9% gain in April, suggesting American consumers are shifting their spending from goods to services as businesses return to full capacity and the economy rebounds. May’s figure was higher than the median estimate of 0.8% by a survey of Bloomberg economists.
The decline in retail purchases comes in lieu of rising core consumer prices which rose by 3.8% in May from a year ago, the most since 1992. It remains unclear whether recent inflation will be transitory, or if it is signaling more structural changes to prices in the U.S. economy.
With 80% of states now having “no to low restrictions” on gatherings amid falling COVID-19 cases, according to TD’s report, restaurant data has demonstrated an improvement in 2021. The average number of diners in restaurants around the country hovers just under pre-pandemic levels, with Texas and Florida leading the charge as both states have seen their number of diners in restaurants surpass the numbers they produced in May of 2019.
Hotel occupancy rates have almost returned to 2019 levels at just over 60%, with May 2019 showing occupancy rates of closer to 65%. Additionally, air traffic has maintained its momentum in June, continuing its uptrend that began in February. The airport traveler throughput 7-day average in early June was approximately 1.9 million per day. Box office spending is also picking up, surpassing $100 million weekly in early June for the first time since March 2020.
Credit card data demonstrated net strengthening in consumer spending, but numbers are down from a March peak that was supplemented by the distribution of third-round stimulus payments. It was the second round of stimulus payments in January that pushed card spending past levels reported in January of 2020.
“The Opportunity Insights credit card series continues to show a sizable net pickup, but momentum has slowed after a surge in March (when stimulus payments were disbursed),” the report read.
In spite of all this, the Mortgage Applications Purchase Index continues to decline from its 5-year peak at the beginning of 2021, and the rebound in consumer confidence appears to be stagnating. Nearly all public schools have returned to either fully in-person or hybrid instructional models, allowing for some parents to return to work. However, the split between schools that are fully in-person or offering hybrid classes remains at around 50-50.
“At-home schooling likely continues to prevent some parents from re-entering the labor force: The “in-person” share has been rising, but very gradually,” the report read.
Thomas Hum is a writer at Yahoo Finance. Follow him on Twitter: @thomashumTV
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