By Howard Schneider
July 16 (Reuters) – The United States’ economic recovery showed signs of stagnation last week as the country struggled against rising coronavirus cases and an increasingly fractured government response, according to data from a broad set of industry sources. and government.
Indices that measure the national recovery of the New York Federal Reserve https://www.newyorkfed.org/research/policy/weekly-economic-index, Goldman Sachs https://www.goldmansachs.com/insights/topics/covid -19 .html and Oxford Economics https://www.oxfordeconomics.com have largely stagnated. Meanwhile, real-time measurements of retail pedestrian traffic https://www.safegraph.com/dashboard and employee work hours https://joinhomebase.com/data and changes have stabilized after growth constant since April that generated optimism for a rapid rebound of the recession caused by the global pandemic.
At the same time, the evidence of reduction is spreading beyond the high-profile examples of Texas, Florida, and California, the top state economies where efforts to reopen trade have been reversed by new restrictions to stop the spread of the disease. COVID-19.
Since the start of the fight against the pandemic, the goal has been to “flatten the curve,” that is, to stop the growth of infections. Instead, four months later, the wrong curve may be flattening out as recovery slows as the virus progresses.
Atlanta Federal Reserve Bank President Raphael Bostic said Thursday that the initial strength of the recovery surprised him, but “the question is, since we have reached this point, what should we expect to move forward.”
“The real-time evidence suggests that there is a little more reluctance in the economy,” he said.
Data from cell phone tracking company Unacast https://www.unacast.com/covid19/covid-19-retail-impact-scoreboard as of July 3 showed that more than half of the states saw retail traffic It surpassed 2019 levels. A week later, the number had dropped to 11, most of them rural and less populated places like Maine and Montana.
In industrial states, including Iowa and Indiana, where retail traffic has exceeded 2019 levels, case counts are growing, suggesting that there is still no clear template on how to reopen the economy in a way that preserves health. public.
“People had that initial impetus to re-engage. Now we see an increase in infections and that is going to put a brake on recovery,” said Elizabeth Crofoot, a senior economist at the Conference Board, a large business organization.
The board released a survey this week concluding that the confidence of US consumers had declined in part because of a lack of confidence in the government’s ability to control the pandemic and that it would likely remain “depressed” for a long time.
Most notably, he said that “the confidence factor, the mixed messages from the local government, the federal government” would likely drive people out of the market regardless of the formal restrictions imposed or lifted by the authorities.
COVER YOUR FACE
The last week he put those mixed messages on a rigid screen.
As daily case growth continued to set records, exceeding 60,000, the Trump administration was fighting with state and local governments over whether to reopen schools and the adequacy of testing, and challenging the credibility of the world’s leading infectious disease expert. the nation.
Almost 3.6 million Americans have been infected and more than 137,000 have died during the pandemic.
The news is not all bleak. Mortality rates in recent weeks have remained low compared to the early days of the pandemic, with some arguing that the country is going through a “learning” phase that will cause individuals and businesses to develop their own ways of doing against the persistence of the disease.
The use of masks has become less stigmatized (Wal-Mart Inc is making them mandatory as of Monday) and a Cleveland Fed survey of 1,141 American consumers https://www.clevelandfed.org/en/newsroom-and -events / publications / economic- comment / 2020-Economic-Commentaries / ec-202020-survey-results-on-mask-wearing-behaviés-y-beliefss.aspx published on Thursday showed that almost 90% said they wore a mask the last time you were in a public interior space like a store
In comments to reporters last week, St. Louis Fed President James Bullard said he believed that individuals and businesses would adopt ways to manage their lives and businesses safely, with masks and social alienation that they will probably become a widely accepted norm even after months in which ‘it has been a matter of political dispute.
“These companies have strong incentives to recoup their revenue streams,” he said. “They can pretend there is no disease. They will be hit in the face. Workers get sick. Customers get sick … Learning happens.”
Nor is the economic data uniformly bad. Retail sales increased 7.5% in June when states lifted coronavirus restrictions and summer came.
But even that can be illusory.
A recent study by the JPMorgan Chase Institute found that expanded unemployment benefits approved in response to the pandemic allowed layoffs to increase their spending. Those benefits expire at the end of this month.
In the meantime, jobs may not return fast enough to take over. Another 1.3 million people applied for insurance https://oui.doleta.gov/unemploy/DataDashboard.asp last week, and several states that had aggressively attempted to reopen their economies saw huge jumps in ongoing unemployment claims as virus cases were exploding and new restrictions were imposed.
Nationwide, data from time management company Kronos https://www.kronos.com/about-us/newsroom/update-us-workforce-activity in a variety of industries showed that work shifts for the Week ending July 12 decreased for the first time since mid-April, excluding Memorial Day and holiday weeks of July 4, when some companies may have closed or reduced their hours.
(Report by Howard Schneider; Editing by Dan Burns and Andrea Ricci)
