Weekly Political Compass
In recent weeks some market economists have drawn attention to the recent down ticks in mobility data as an early indicator of a slow down in economic activity within Europe. Whilst this may be valid, we believe the mobility evidenced arguments are not entirely formed on solid basis. Here is why…
The most commonly used mobility datasets are those released by Apple and Google. Unfortunately, these time series do not incorporate adjustments for seasonality, but instead are normalized to a 1-month base period before the Coronavirus pandemic. The mobility datasets provide useful illustration of the magnitude in the initial drop in activity, and the subsequent recovery. However, we believe non-seasonally adjusted data hinders the use of mobility data as a useful indicator of economic activity moving forward. Moreover, they fail to account for changes in behavior post-lockdown.
We will write more on this topic later with analysis using our proprietary mobility datasets. For now, we will leave you with air travel volumes to illustrate the impact of seasonal trends: