On December 14th the US death toll from the coronavirus (Covid‑19) topped 300,000—about 19% of the worldwide total. This was less than three months after the US passed the 200,000 fatality mark.

This grim new milestone occurred on the same day that American healthcare workers began receiving the first doses of a Covid‑19 vaccine produced by a US pharmaceuticals giant, Pfizer, and BioNTech of Germany. At least two other vaccines are set for regulatory approval in the coming weeks, and the government expects that more than 100m Americans, or all those at high risk of catching the disease, will be inoculated by end-February. Priority is being given to healthcare and other essential workers, the elderly and people with co-morbidities.

The rollout of the Pfizer vaccine has buoyed sentiment on equities markets in anticipation of the economy returning to a semblance of normality. However, the pandemic will continue to cast a shadow over consumer and business spending for some time. Public health experts are warning that infections, hospitalisations and deaths could reach record levels in the coming months as cold weather forces people indoors, particularly around the holidays. The Institute for Health Metrics and Evaluation projects that, based on current conditions, the death toll could exceed 500,000 by April 2021.

In mid-December the administration of the outgoing president, Donald Trump, launched a US$250m campaign to bolster public confidence in the new vaccines. However, the task is complicated by Mr Trump’s earlier efforts to play down the impact of the virus and undermine the credibility of mainstream scientists. A recent survey by the Pew Research Centre found that more than one-fifth of Americans did not intend to be vaccinated. This lack of trust is likely to contribute to the slow rollout of vaccines in 2021.

The president-elect, Joe Biden, has promised to prioritise fighting the pandemic, starting with an executive order on his first day in office that will make mask-wearing mandatory in federal buildings and on inter-state public transport. These measures will help to avoid an even slower return to normalcy.

Surging Covid-19 case numbers and tightening restrictions in many states will depress consumer demand and business investment for several months to come. We maintain our forecast that real GDP will rise only marginally in the fourth quarter, at an annualised rate of 1.3%, before accelerating gradually in early 2021 as more congressional stimulus is passed.