Amid strong job growth in June, signs of a US recovery.

(Reuters) – The US economic recovery, After two months of faster-than-expected job gains, may stumble as a surge in new coronavirus infections prompts states to delay and, in some cases, reverse plans to allow stores to reopen and activities to resume.

High-frequency data gathered by Federal Reserve officials, economists, cell phone tracking companies and employee time management firms suggests that activity slowed in recent days, clouding a strong US employment report. That may have been fueled by a lush start to the month as states reopened.

Some of those reopening plans have now been suspended and new restrictions have been imposed on bars, restaurants and other companies in the hotel industry that helped the US economy add 4.8 million jobs in June. It was the second consecutive month of record job growth reported by the Labor Department, and investors are reading it as a sign that the US economic crisis may be easing. The main stock indices were all higher.

But data nearing the end of the month pointed in a different direction, with July now proof of whether record growth in coronavirus cases can be managed without overwhelming local health facilities or forcing a second widespread shutdown of the economy.

It may not even be necessary to renew the restrictions to mitigate or stop the rebound. On July 31, expanded unemployment benefits expire without Congress action, depriving families of financial support that actually increased disposable income for many who lost their jobs.

Consumers become cautious

And consumers may be backing off on their own.

A weekly economic index by the Federal Reserve Bank of New York fell slightly last week, attributed by officials to a drop in consumer confidence.

Estimates of foot traffic to retail stores, compiled by Reuters from cell phone data supplied by Safegraph, fell for the first time since early April, against the background of the economic crisis caused by the new coronavirus pandemic.

Similar Unacast data also declined, with what had been a tentative return to restaurants, gyms and beauty parlors stalled amid growing coronavirus infections. Traffic to fitness facilities, for example, had returned to 2019 levels in about half the states by June 20. Last Saturday, just a week later, that was the case in just five.

Spending among Chase’s 30 million credit card holders, which had reached 10% of 2019 levels before June 21, fell sharply and ended the week almost 13% below last year, up from That JPMorgan analyst Jesse Edgerton called a “surprisingly widespread” decline in states and demographics.

Hours worked in more than 44,000 small businesses, whose work hours are managed by Homebase, fell in 25 states in the week ending June 28. That included a decrease of more than 7% in Arizona and a fall of more than 5% in Texas, where the new outbreaks forced governors to give up aggressive efforts to reopen the economy.

“More than ever, we are concerned about the worsening health situation and its impact on the burgeoning recovery. Recovery of mobility and misuse of protective gear will be a dangerous summer cocktail, “wrote Oxford Economics analyst Gregory Daco.

The company’s recovery rate actually increased slightly during the week ending June 19, as Americans spent more and drove more, and continued to return to restaurants and hotels. That increase in mobility helped spur job gains in June and pushed the unemployment rate to 11.1% from 13.3% in May.

But, along with mixed adherence to social estrangement, wearing masks and other personal behaviors that can slow the spread of the coronavirus, it also caused the health measures of the Oxford indices to erode.

The number of COVID-19 cases has reached new records nationally and particularly in a group of southern and southwestern states that were initially hesitant to establish strict rules to handle the health crisis.

Analysts at Goldman Sachs estimated that states representing more than half of the US population had now paused or partially reversed their reopening plans, with limits more frequently re-imposed on bars, restaurants and the size of the meetings.

“The spread of the virus is worsening in almost every state,” company analysts wrote, noting that only the small states of Vermont and New Hampshire in New England currently meet the four recommended criteria for restarting trade.

For more details on the data mentioned in this story:

Not issued here Homebase here Safegraph www.safegraph.com/dashboard, Kronos here NYFed here Goldman here Oxford https://www.oxfordeconomics.com, DOL here