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The Margin: States where Yelp searches for restaurants and bars increased in May became coronavirus hot spots in June

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In states where consumer interest in going out increased, a surge in coronavirus infections soon followed.

That’s according to Yelp YELP, +0.41%, which reports “a statistically significant correlation” between increased consumer interest in going to restaurants, bars and gyms in states including Florida, Nevada, South Carolina, Texas and Georgia in May, and “a clear spike” in COVID-19 cases within those same places a month later.

How did they draw this conclusion? Yelp’s data analysts measured consumer interest in businesses listed on the review site, and split the data by business category and state. They determined a baseline pandemic level of interest in each sector by measuring how often users searched for these services during the initial “shutdown” between March 25 and April 15 of this year, when interest in going out was at its lowest. They then looked at how search interest changed as states began to reopen in May.

Turns out, the 10 states with the largest spike in COVID-19 cases in June also saw a more than 50% increase in consumer interest in restaurants, gyms, bars and nightlife in May, relative to the level of Yelp searches earlier in the pandemic.

People in Florida showed a more than 100% increase in these activities in May, for example, and the state saw cases climb almost 600% in June.

Yelp

This correlates with local reports that hospitals in Southern and Western states, including Florida and Texas, are now running out of intensive-care unit beds. A CNN analysis of testing data also reveals that the positive test rate — or the average number of positive test results out of 1,000 tests performed — has increased in many of these same hot spots, including Florida, Arizona, Texas and Georgia. Florida saw an average rate of 35 positive results per 1,000 tests during the month of May (when Yelp reported a spike in Floridians looking up restaurants, nightlife venues and gyms), and that number nearly tripled to 105 positive COVID-19 results per 1,000 in June. 

Related:Roughly 1 in 3 Americans thinks the coronavirus hasn’t killed as many people as has been reported

On the flip side, Yelp found that the 10 states with the biggest drop in COVID-19 cases in June, including Massachusetts, New York and California, saw Yelp searches among their residents remain relatively flat — with consumer interest increasing by less than 50% compared with the beginning of the shutdown.

The researchers also noted that users’ interest in these dining and socializing categories has started coming back down again in places like Florida, Texas, South Carolina and Arizona that have become coronavirus hot spots. “This emphasizes the strong correlation between the pandemic and consumer behavior,” the report reads.

In other words, when there’s a major coronavirus outbreak in an area, people shelter in place more and avoid businesses where it’s hard to practice social distancing.

The Catch-22 is that once cases flatten or decrease, people venture back out to partake in these pre-pandemic activities again, which can potentially cause another outbreak and lead the state to temporarily close down businesses again — as is being seen in California. And the Yelp report warns that “these outbreaks may then require stricter measures to suppress cases.”

Related:California, New Jersey and New York City pause indoor dining — why is it dangerous?

Among other long-term trends, Yelp also reported that the number of overall closures among businesses listed on its site has dropped as more places reopen, but this number has been fluctuating wildly over the past few months as local economies close, reopen and then shut down again. Total business closures hit 177,000 on Yelp in April, before dropping to 140,000 on June 15, for example — and then closures jumped back up to 147,000 on June 22, before decreasing once more to 132,500 as of July 10.

The bad news is, permanent closures among businesses listed on the review site have continued to climb, with more than 15,000 businesses shuttering for good in just the past month, bringing the total number of permanently closed businesses to almost 73,000 as of July 10. Restaurants, retailers, bars and nightclubs, as well as beauty and fitness centers, have been hit the hardest.

Read more:55% of businesses closed on Yelp have shut down for good during the coronavirus pandemic

“As U.S. cities struggle to balance reopening their local economies and avoid becoming the next COVID-19 hot spot, we’ve seen U.S. business closure data reflect an unstable economy,” Justin Norman, Yelp’s vice president of data science, said in a statement.

The U.S. coronavirus case tally surged above 3.9 million and the death toll hit 142,080 on Wednesday, driven by more than 65,000 new infections and more than 1,000 deaths the day before. President Trump warned in his first briefing on the pandemic in three months that the outbreak “will probably, unfortunately, get worse before it gets better.” He also encouraged Americans to wear masks for the first time.

Read more of MarketWatch’s coronavirus coverage, including economic recovery and the pandemic’s impact on the 2020 election.