Market Minutes Audiocast: Evaluating changes to the economy in the wake of the pandemic
SPEAKER 1: Welcome to Market Minutes, an audio cast to help you stay informed on key topics likely to affect markets, the economy, and investors. Today's topic is evaluating changes to the economy in the wake of the pandemic. Here's senior investment strategist Rob Haworth. 
ROB HAWORTH: I think the one area that we think there's some permanent changes but we're not sure if this is a more gradual normalization or not is back to office. When we look at the Metropolitan Transit Authority data out of New York for turnstiles, we just see commutes aren't what they were. People just aren't back in the office. 
So that has implications for businesses around the central business district that has implications for demand for office space, has implications for demand for energy. Because if you're not commuting as much, you-- less energy. Certainly a lot cheaper. So that's something where it looks like that's persistent and we'll have to see. 
Now this is where back to school is really important. Does back to school mean people return to office because now they can as opposed to having kids at home to tend to. So September's an important time frame around that data. 
The goods demand relative to services demand I think is a tougher thing for us to discern, and the reason it's tougher is I think during the shutdowns, we could order goods. We replaced dishwashers. We invested in our homes. That was where the wealth went because there was nowhere to go. Restaurants and bars were closed, we're socially distanced, or you were outside in a bubble or however they all handled it. 
This year we've had a softening in goods demand and a ramping in services demand. People have been traveling, taking vacations, flying, staying in the hotels. They are all at or exceeding capacity as is the reports we're seeing. And I think a fair question is, well, is that back permanently or not. Our sense is probably not. It's probably a surge, and then people will have done that and will get back to more balanced consumption of replacing goods as we need them or as they're available and more normalized travel as opposed to everyone needing to get out of the house right now because they haven't had a vacation in two years. 
So I think that part will be more normal. That's what's skewing in the data right now, and we're seeing that in hiring and retail sales and other places and inflation. That's the aspect that probably goes back to normal. We have these two waves of activity that wash through the system and then to the extent that supply constraints are eased, demand probably normalizes. 
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