Amid strong job growth in June, signs are that the recovery in the US may slow

(Reuters) – The economic recovery in the US, after two months of faster-than-expected job gains, could stall as a wave of new coronavirus infections prompts states to reopen plans to reopen stores and resume operations in some cases to turn.

High-frequency data collected by Federal Reserve officials, economists, cell phone tracking companies, and employee time management companies suggest activity has slowed in recent days, obscuring a strong U.S. employment report that may be fueled by an exuberant start to reopened the month as states.

Some of those reopening plans have now been suspended, and new restrictions have been imposed on the bars, restaurants and other hospitality businesses that helped the U.S. economy create 4.8 million jobs in June. It was the second straight month with record employment growth, as reported by the Labor Department, and investors saw it as a sign that the US economic crisis may be abating. The major stock indices were all higher.

But data moving towards the end of the month pointed in a different direction, with July now testing whether record growth in coronavirus cases can be managed without overwhelming local health care or forcing a second widespread economic shutdown.

It may not even require new restrictions to slow down or stop the rebound. On July 31, extended unemployment benefits without Congressional action expired, depriving families of an economic advantage that actually increased disposable income for many people who lost their jobs.

CONSUMERS ARE BEING CAUTION

And consumers may withdraw by themselves.

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

Estimates of pedestrians to stores, prepared by Reuters based on mobile phone data provided by Safegraph, have fallen for the first time since early April, amid the economic crisis triggered by the new corona virus pandemic.

Similar data from Unacast also declined, with what had been a tentative return to restaurants, gyms, and beauty salons amid mounting coronavirus infections. For example, traffic to fitness facilities had returned to 2019 levels in about half of the states by June 20, just five weeks last Saturday, just a week later.

Spending of 30 million Chase credit cardholders, which had risen to 10% of the 2019 level on June 21, abruptly declined, ending the week nearly 13% below last year, in what JPMorgan analyst Jesse Edgerton experienced a “surprisingly widespread” decline called. states and demographic groups.

Hours worked at more than 44,000 small businesses, with employee hours managed by Homebase, declined in 25 states in the week ending June 28. That included a drop of more than 7% in Arizona and a drop of more than 5% in Texas, where new outbreaks forced governors to forgo aggressive efforts to reopen the economy.

“More than ever, we are concerned about the deteriorating health situation and its impact on the budding recovery. Recurring mobility and poor use of protective equipment make for a dangerous summer cocktail, ”wrote Oxford Economics analyst Gregory Daco.

The company’s recovery index rose slightly for the week ending June 19, as Americans spent more and drove more and returned more to restaurants and hotels. This increase in mobility has boosted job growth in June and brought unemployment down from 11.3% in May to 11.1%.

But in addition to mixed adherence to social distance, mask use, and other personal behaviors that could slow the spread of the coronavirus, it also worsened the health measures of the Oxford indexes.

The caseloads of COVID-19 have set new records nationally, particularly in a cluster of southern and southwestern states, which initially hesitated to adopt strict rules for managing the health crisis.

Goldman Sachs analysts estimate that states representing more than half of the U.S. population have now paused or partially reversed their reopening plans, with the limits most often imposed on bars, restaurants and the size of gatherings.

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

For more details about the data referenced in this story:

Unacast here Home base here Safegraph www.safegraph.com/dashboard, Kronos here NYFed here Goldman here Oxford https://www.oxfordeconomics.com, DOL here