A recent research note from the San Francisco Federal Reserve investigating county level economic activity during the COVID-19 pandemic concludes that local economic activity was closely related to COVID-19 conditions but gradually became decoupled as the year wore on.
With the spread of the Delta variant more recently the coupling between local economic activity and prevalence of COVID-19 seems to have reestablished itself.
According to the Fed’s researchers the link between the prevalence of COVID and local economic activity is stronger in highly vaccinated counties leading them to suspect that people in highly vaccinated counties are more likely to heed COVID conditions when spending locally.
In general the report notes a strong statistical relationship between vaccination and local economic spending.
“Higher vaccination rates may, on average, lessen local consumers’ and workers’ fears of in-person activities and thus stimulate local retail shopping and restaurant dining,” note the authors.