(Reuters) – America’s drive to revive its economy amid a pandemic stalled last week, with symptoms that the expiration of emergency unemployment benefits and trade subsidies would likely have begun to wreak havoc.
Small business hiring, changes in a variety of industries, credit card spending and even demand for gas, which sometimes increases in the summer, have remained solid and stagnant below a year’s titles.
Initial unemployment insurance programs fell below 1 million for the first time since the coronavirus economic recession began in March, and the number of others who made a profit fell from 604,000 to 15,486 million in the week ending August 1.
While either statistic means that some new hires continue, the numbers remain large by old standards. There is growing fear that the continued spread of the virus and the inability of the White House and the United States Congress to agree on a new government for troubled and unemployed companies could absolutely stifle the recovery.
“The recovery seems to be slowing down,” said AnnElizabeth Konkel, an economist at Indeed Hiring Lab, where jobs increased by fourteenth consecutive week but at the slowest speed since early May. “It is promising that initial unemployment programmes have declined, but much remains to be done.”
Risks may increase. Much of the U.S. economy depends on customer spending and the key expired in July when Congress did not increase a weekly supplement of $600 to unemployment insurance. Pandemic bills were legal through lawmakers in March, as well as lending to thousands of small businesses.
The combination of this aid has resulted in emerging non-public revenue despite widespread layoffs, higher retail spending in May and June, and allowed many Americans to save and pay their debts, which is rare in times of recession.
The maximum savings rate can create a circle of family expenses during a time. A first clue as to whether families continue to spend or are concerned about the prolongation of the recession will come Friday with the release of July’s retail sales data. Retail sales are expected to have accumulated by 1.9% last month, according to the consensus estimate of analysts surveyed through Reuters.
But broader measures to track overall recovery have shown little improvement. An Oxford Economics index that combines health, economic and social knowledge fell last week and has barely been replaced since mid-June. A long-term GDP measure by the New York Federal Reserve also showed little change.
Chart: Oxford Economics Recovery Index here
Chart: NY Fed Weekly Economic Index Ny’s Weekly Fed Economic Index here
JP Morgan’s credit card spending knowledge remained unchanged in the first week of August and has also stalled since mid-June at about 10% below last year’s level.
At this point, it turns out that there is little relief in sight. Democrats and Republicans in Congress remain stuck in more emergency aid, even with the U.S. economy at about thirteen million jobs below its February level. President Donald Trump ordered more benefits, but it is unclear whether his order has legal authority.
There are symptoms of resilience. General bankruptcies through July were 25% below the 2019 level, according to Epiq AACER data, Chapter 11 corporate bankruptcies increased, while well-known names like J.C. Penney and Neiman Marcus succumbed to the sharp drop in retail traffic.
But the initial hope for a rapid uptick has faded now that the resolution to repair the industry as a whole has been met with an uptick in coronavirus cases. Florida recorded a record number of coronavirus deaths this week, and the daily expansion of cases in the United States is more than double that of early June.
According to knowledge gathered through Safegraph and Unacast, estimates of retail pedestrian traffic have replaced cell phones little and, for either company, remain at recent peaks in mid-June.
Graphic: here in real time
The number of painters in small business paintings whose time records are kept through Homebase has decreased slightly, and the expansion of factory shifts has replaced little among corporations whose time records are maintained through the Kronos knowledge company.
The 0.5% accumulated in “punches” for the week ending August 9 contrasted with an average weekly expansion of 2.7% in May and 1.9% in June, “reinforcing the much slower recovery phase” that will take root after July. four vacations, Kronos spokesman Dan Gaffney said.
The weight of this may already fall on high-contact service companies, many of which are small businesses such as restaurants, bars, gyms, and beauty salons, whose fortune has been a motivation for the U.S. government’s payment coverage program, which consists of small business loans. and push for the lifting of pandemic restrictions as soon as possible.
Un-transmitted knowledge showed an increase in pedestrian traffic to those industries in many states in June, blocked in July and receded in the first week of August.
Graphic: a social slowdown? A social slowdown? Here
Reporting through Howard Schneider; Editing through Dan Burns and Paul Simao
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