Vermont is a vaccine star. Why business is increasing there and what it means for investors.

Call it Vermont’s problem: why is the daily number of Covid-19 cases in New England states doubling with vaccination rates over 70%, and what does it say about the coming winter?

Of all the states, Vermont has weathered the pandemic the most successfully to date, with the lowest death rate and the highest rates of both fully vaccinated and boosted people.

And yet new cases of Covid-19 have surged in Vermont in recent weeks. The state received an average of 200 new cases per day through October. At the end of November, that number was closer to 350.

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

The spikes in these well-protected states are fueling fears of another dark pandemic winter in the US as the coming cold weather pushes people inside and speeds up transmission of the virus. Already across the Atlantic, new shutdowns are in effect in Austria and the Netherlands, making the economic recovery in Europe even more shaky.

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

The good news for the US economy is that high vaccination rates mean a winter surge here won’t bring lockdowns. Still, an increase in the number of cases is likely to reduce travel, spending and rent, and cause economic disruptions after the holiday season.

“It’s entirely possible that we’ll see a slowdown in services spending over the next two months if numbers continue to rise,” said Brett Ryan, senior US economist at Deutsche Bank. “If it gets severe enough, it just slows down recovery, and really slows down recovery in services, and just causes disruptions to everything because of childcare.”

The winter wave, when it comes, will not resemble previous pandemic waves. While the pandemic is not over and deaths among unvaccinated and some vulnerable groups of vaccinated people will continue to pile up, the rising number of cases doesn’t mean what they did months ago.

“I don’t expect there to be either the political will, or even the need, to get close to closing again,” said Dr. Howard Forman, a professor at the Yale School of Public Health and the Yale School of Medicine. “It’s hard to imagine that the pandemic will affect economic activity to almost the same extent as we’ve seen before, but can we get 200,000 or even 300,000 deaths by the summer? Very possible. And that should concern people.”

A look at the data from states like Vermont and Connecticut suggests that what’s happening in the Northeast is a wave highly concentrated among the unvaccinated.

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

As of November 23, more than 95% of Vermonters over 65 had been fully vaccinated, and the average number of new cases reported per day in the state for that age group has fallen 14% in the past week. Meanwhile, cases are up 13% for people ages 25 to 49; for adults in Vermont ages 22 to 29, the vaccination rate is only 62.8%.

Even more notably, Covid-19 hospitalizations in Vermont rose 25% in the past week for those not fully vaccinated, and dropped 23% in the past week for the fully vaccinated.

The story is similar in Maine, where the number of new cases is not rising as much as in some states in the Northeast, but where hospitalizations have increased by 29% in the past two weeks, according to data from the New York Times.

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

Overall hospitalization rates have started to climb in the Northeast, with the average number of people hospitalized in Vermont for Covid-19 rising 17% from Nov. 16 to Nov. 23, but it’s nothing like the Upper Midwest. Michigan, which has a 54% vaccination rate, now has the highest number of Covid-19 hospitalizations in the US, and the state governor has asked the federal government for emergency assistance from the US military to keep its hospitals running.

Most states have higher vaccination rates than Michigan, and vaccination rates continue to rise as vaccination permits expand to younger children. Major economic disruptions are unlikely for much of the country. “What I do think is that you’re going back to situations where indoor mandatory masking is becoming much more the rule of the day,” Forman says.

Deutsche Bank’s Ryan compares what came to the dip at the end of the summer when the Delta wave hit. “You saw hiring slow, and I think that’s the risk,” he says.

In the meantime, the hard-to-predict follow-up effects of the pandemic will continue to pile up. To take


(ticker:MDT) Recent decline in revenue in the fiscal year’s second quarter, which the company partially blamed for a nurse shortage. Medtronic’s CEO, Geoff Martha, attributed the shortfall to burnout and early retirement. “During the height of Covid, the ICU beds were full of Covid patients,” Martha said Barron’s. “That’s not the case now, but they don’t have enough ICU nurses.”

The Covid-19 pandemic will not end; it is more likely to go extinct if it shifts to an endemic phase. The likely winter wave is a step towards that future, as the virus continues to impact economic activity by hitting certain sectors and geographic areas harder than others, but not as catastrophic as in previous periods.

write to Josh Nathan-Kazis at


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