Vermont is a vaccination star. Why are cases increasing there and what it means for investors.

And yet, new cases of Covid-19 have skyrocketed in Vermont in recent weeks. The state was averaging about 200 new cases a day until October. By the end of November, that number was closer to 350.

The situation is similar to neighboring Connecticut, Rhode Island and Massachusetts, all of which have vaccination rates of 71% or 72%, and all of which have seen their average number of new daily cases roughly double recently.

Outbreaks in these well-protected states raise fears of another gloomy pandemic winter in the United States, as the coming cold pushes people indoors and increases transmission of the virus. Already across the Atlantic, new closures are in place in Austria and the Netherlands, making the European economic recovery even more fragile.

Investors have been anxious in recent weeks, and the S&P 500 Index has stalled since early November, after rising 7% in October.

The good news for the U.S. economy is that high vaccination rates mean a winter surge here won’t lead to lockdowns. Still, an increase in cases will likely reduce travel, spending and hiring, and cause economic disruption after the holiday season.

“It is very possible that we will see a slowdown in spending on services over the next two months if cases continue to rise,” said Brett Ryan, senior US economist at Deutsche Bank. “If it gets bad enough, it just slows down the recovery and really slows down the recovery of services, and just causes disruption because of child care.”

The winter wave, if it occurs, will not look like previous pandemic waves. While the pandemic is not over and deaths among the unvaccinated and some vulnerable groups of people vaccinated will continue to pile up, the increase in the number of cases does not mean what they did months ago. .

“I don’t foresee that there will be the political will or even the need for something close to a shutdown again,” said Dr. Howard Forman, professor at the Yale School of Public Health and the Yale School of Medicine. “It would be hard for me to imagine that the pandemic will affect economic activity to about the same degree as we’ve seen it before, but could we have 200,000 or even 300,000 deaths before the summer? Very possible. And it should be about people.

A review of data from states like Vermont and Connecticut suggests that what’s happening in the northeast is an increase heavily concentrated among the unvaccinated.

“We have a highly vaccinated population here,” acknowledges Dr. Jan Carney, associate dean for public health and health policy at Larner College of Medicine at the University of Vermont. But that doesn’t mean, Carney says, that everyone in the state is vaccinated. “It varies by county and by age,” she says.

As of November 23, more than 95% of Vermonters aged 65 and over were fully vaccinated, and the average number of new cases reported per day in the state for this age group is actually down 14% from to last week. Meanwhile, cases are up 13% for people aged 25 to 49; for Vermont adults aged 22 to 29, the vaccination rate is only 62.8%.

Even more striking, Covid-19 hospitalizations in Vermont are up 25% over the past week for those not fully vaccinated, and down 23% over the past week for those fully vaccinated .

The story is similar in Maine, where new cases are not increasing as sharply as in some northeastern states, but hospitalizations have jumped 29% in the past two weeks, according to data from New York. Times.

“Hospitals keep telling us that 60 to 70% of their patients are not fully immunized,” says Robert Long, director of communications for the Maine Center for Disease Control and Prevention.

Overall hospitalization rates have started to rise in the Northeast, with the average number of people hospitalized in Vermont for Covid-19 increasing 17% from November 16 to 23, but it’s not like in the Upper Midwest . Michigan, which has a 54% vaccination rate, now has the highest Covid-19 hospitalization rate in the United States, and the state governor has asked the federal government for emergency assistance from the US military to operate its hospitals.

Most states have higher vaccination rates than Michigan, and vaccination rates continue to rise as vaccine approvals expand to include young children. For much of the country, significant economic disruption is unlikely. “What I think is you’re going to go back to situations where mandatory indoor masking becomes a lot more the rule of the day,” Forman said.

Deutsche Bank’s Ryan compares what happened on the downside at the end of last summer when the Delta wave hit. “You’ve seen hiring slow down, and that’s, I think, the risk,” he says.

The difficult-to-predict follow-up effects of the pandemic, meanwhile, will continue to accumulate. To take

Medtronic
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(ticker: MDT) Recent sales faltered in the second quarter of its fiscal year, for which the company blamed a nursing shortage in part. Medtronic CEO Geoff Martha attributed the shortage to burnout and early retirement. “At the height of Covid, intensive care beds were full of Covid patients,” Martha said Barron. “They don’t now, but they don’t have enough critical care nurses.”

The Covid-19 pandemic is not going to stop; on the contrary, it will stop as it passes into an endemic phase. The likely winter push is a step towards that future, as the virus continues to impact economic activity by hitting certain sectors and geographies harder than others, but not as catastrophic as previously.

Write to Josh Nathan-Kazis at [email protected]