Cooler but still well above normal this week

MPR News helps you turn down the noise and build shared understanding. Turn up your support for this public resource and keep trusted journalism accessible to all. 

Turn Up Your Support

Editor's note: This is an excerpt of Planet Money's newsletter. You can 

1918 should have been a great year for baseball. A young left-handed pitcher named Babe Ruth began the year by pitching an opening-day victory for the Boston Red Sox. Shortly after, Ruth lobbied the team's manager to let him play other positions so he could spend more time at the plate. The strategy paid off, and Ruth began his run as a home-run-hitting superstar, helping lead the Red Sox to the World Series. 

But a world war and a deadly pandemic slashed demand to see ballgames in 1918. Just days before Ruth led the Red Sox to the World Series, soldiers returning from Europe brought a new strain of the Spanish flu to Boston, says Georgia Tech historian Johnny Smith, co-author of “War Fever: Boston, Baseball, and America in the Shadow of the Great War.” "Boston becomes the epicenter of a second wave, which was a more virulent strain of the virus."

Despite the Red Sox being on their way to winning the series — the last they would win before an infamous dry spell that lasted until 2004 — the flu reduced attendance at a Fenway Park that already had plenty of empty seats because of World War I. The stadium could hold 35,000 people, but for Game 5 of the Series, 

 fans were in the stands. With flu cases mounting, the next day a Boston public health official warned Bostonians they should be wary of the virus. For Game 6, when the Red Sox clinched the title, 

 showed up. Overall, the war and the pandemic slashed MLB game attendance by 

 from what it was in the previous season. 

By 1919, the war and the pandemic were over, and a tidal wave of baseball fans swelled into stadiums. Game attendance 

 — from 2,830,613 in 1918 to 6,532,439 in 1919. It's a classic example of what economists call "pent-up demand." After being deprived of being able to do something, when the constraints are lifted — whether because of the end of a recession, a war or a pandemic — people ravenously consume what was previously out of reach.

Now with light beginning to show at the end of the COVID-19 tunnel, the words "pent-up demand" are echoing throughout the business world. The 

 says pent-up demand for travel will help his company soar back to profitability. 

 claim people will come rushing back to the company's hotel rooms. According to a 

 by AlphaSense, a company that uses artificial intelligence technology to sift through Securities and Exchange Commission filings, event transcripts and other business documents, use of the term "pent-up demand" is at an all-time high. 

Executives in industries devastated by COVID-19 clearly want investors to believe that they're on the verge of a roaring comeback. And some evidence suggests they may be right. According to 

data from the U.S. Bureau of Economic Analysis

, the national savings rate has jumped during the pandemic, so people may have extra cash to burn on big trips, fancy cocktails and Broadway shows. And, man, do people miss going out. 

 by the Harris Poll, 71 percent of Americans say they miss socializing in restaurants and bars, 61 percent say they miss shopping in stores and 52 percent say they miss movie theaters. Growing percentages of people say they're planning on splurging on vacations, clothes, cars and sporting events when things return to normal. Fifty-nine percent say they would take a COVID-19 vaccine in order to fly again. After news broke that COVID-19 vaccines work, stocks for airlines, cruise lines and other industries that rely on being face to face surged.

Places that have gotten the virus under control have already seen some impressive rebounds in travel and leisure. For example, in China, domestic airline travel 

 after the country ended its shutdowns. When Shanghai Disneyland reopened, 

When we get the pandemic under control, pent-up demand may even rear its head with more babies. For example, 

 that after the Spanish flu reduced birthrates, countries like 

Beyond a resurgence of babies and baseball, researchers have credited the end of the Spanish flu with feeding a "

" that helped produce a boom in 1919. Now, 

 that pent-up demand could feed a bull market this year. 

But before you totally get your hopes up, the short boom that followed the Spanish flu ended in a largely 

 in 1920. Only after that did we get the Roaring '20s, with the happy flappers and fedoras and all. 

 for home runs in a single season in the year that followed the virus. But the Red Sox then traded him to the Yankees. One season delivered a pandemic, and the next the 

Did you enjoy this newsletter segment? Well, it looks even better in your inbox! You can

Business and Economic News

Health

COVID-19

Greg Rosalsky

Author

A hundred years ago, a world war and a pandemic wreaked havoc on baseball and other industries. But pent-up demand helped them come roaring back.

What 1919 teaches us about pent-up demand

Go Deeper.

Like this?

News you can use in your inbox