Goldman Sachs’s Kris Dawsey, on Ebola:

…public concern about Ebola—as reflected in Google searches—spiked around the time the WHO declared an Ebola emergency in August and again after the first case was reported in the US at the end of September. However, despite rising public interest in the disease, there has been no discernible effect on high frequency measures of consumer sentiment. The daily Rasmussen confidence index has been relatively range-bound since early September. The daily economic confidence index from Gallup (not shown) has actually risen over this period. Consensus expects the preliminary October read on consumer sentiment from the University of Michigan (to be released Friday, October 17) to remain roughly stable, although we see downside risk to the consensus view (GS 82.0, consensus 84.0, last 84.6).
Despite limited impact on consumer sentiment to date, the “fear factor” associated with Ebola appears more significant than past instances of pandemic concern. A recent Gallup poll revealed that 22% of Americans worried about personally contracting the disease. This is similar to the percent of respondents who worried about contracting the swine flu virus in 2009, even though the number of confirmed cases of swine flu in the US was orders of magnitude higher at that time. A recent Washington Post-ABC News poll indicated that two-thirds of Americans were worried about an Ebola epidemic in the US.

In addition, recent episodes of pandemic concerns here in the United States had very little (if any) effect on U.S. retail sales. But, writes Mr. Dawsey (my friend):

In terms of worst-case tail risk scenarios, the example of the SARS outbreak in Hong Kong during 2003 is worth considering. During this time, Hong Kong retail sales dropped roughly 10% from their peak, while air traffic plummeted even more than that seen after the September 11 attacks. Lee and McKibbin (2004) estimate that the SARS outbreak reduced Hong Kong GDP growth in 2003 by 2.6 percentage points. Incidentally, the World Bank cites shopping centers in Lagos, Nigeria—which has largely contained the Ebola outbreak at 19 confirmed cases—reporting sales down 20 to 40%, an even larger decline than that seen in Hong Kong during the SARS outbreak. Again, we believe a fairly limited economic outcome for US growth is most likely, and we present the examples of September 11 and the Hong Kong SARS outbreak only as examples of downside or worst-case tail risk scenarios.

— Michael R. Strain is a resident scholar and economist at the American Enterprise Institute. You can write to him on Twitter at twitter.com/MichaelRStrain.