Economy Plateaus, Record 77,000 New COVID19 Cases – US Flattening the Wrong Curve?

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  • The U.S. economic restoration showed signs of plateauing.
  • Real-time evidence suggests there is a bit more reticence in the economy.
  • Retail sales jumped 7.5% in June as states lifted coronavirus restrictions.
  • Nearly 3.6 million Americans have now been infected and more than 137,000 have died during the pandemic.
  • The U.S. reported more than 77,000 new cases as the number of deaths in a 24-hour period rose by nearly 1,000.
  • A survey showed nearly 90% wore a mask the last time they were in a public indoor space such as a store.
  • 1.3 million people filed for unemployment insurance claims as virus cases exploded and new restrictions were imposed.

The U.S. economic restoration showed signs of plateauing last week as the country battled rising coronavirus case counts and an increasingly fractured government response, reports Reuters.

National recovery

Indexes measuring the national recovery from the New York Federal Reserve, Goldman Sachs and Oxford Economics have all largely stalled. 

Retail foot traffic and work hours

Meanwhile real-time measures of retail foot traffic and employee work hours and shifts have flatlined after steady growth since April spawned optimism for a swift rebound from the recession triggered by the global pandemic.

Retrenchment 

At the same time, evidence of retrenchment is spreading beyond the high-profile examples of Texas, Florida and California, major state economies where efforts to reopen commerce have been thrown into reverse by fresh restrictions to stop the spread of the COVID-19 disease.

Virus surge

Since the beginning of the fight against the pandemic the aim has been to “flatten the curve”. Instead, it may be the wrong curve that is flattening as the recovery slows while the virus surges ahead.

Atlanta Federal Reserve Bank President Raphael Bostic said the early strength of the recovery surprised him, but “the question is as we have gotten to this point what should we expect moving forward.”

Economic evidence 

Real-time traffic

“Real-time evidence suggests there is a bit more reticence in the economy,” he said.

Data from Unacast, a cell phone tracking firm showed more than half of states saw retail traffic surpass 2019 levels as of July 3. A week later the number had slipped to 11, most of them rural, less-populated places like Maine and Montana.

 

Retail traffic

In industrial states including Iowa and Indiana where retail traffic has exceeded 2019 levels, case counts are growing. There is no clear template in place for how to reopen the economy in a way that preserves public health.

Elizabeth Crofoot, a senior economist at the Conference Board, an organization of major companies said, “People did have that initial impetus to re-engage. Now we see a spike in infections and that is going to put a damper on the recovery.”

Retail sales jumped 7.5% in June as states lifted coronavirus restrictions and summer arrived.

U.S. consumer confidence 

The board published a survey this week concluding that U.S. consumer confidence had been driven lower in part by lack of trust in the government’s ability to control the pandemic, and would likely remain “depressed” for a sustained time.

Message from government

She added “the trust factor, the mixed messages from local government, the federal government,” would likely drive people from the marketplace regardless of any formal restrictions imposed or lifted by authorities.

Battle against the pandemic

Reopening schools

As the daily growth in cases continued, topping 60,000, the Trump administration was battling with state and local governments regarding:

  • reopening of schools and 
  • the adequacy of testing and challenging the credibility of the nation’s top infectious disease expert.

Death rate

Nearly than 3.6 million Americans have now been infected and more than 137,000 have died during the pandemic.

Death rates in recent weeks have remained low compared with the earliest days of the pandemic

Some argue the country is going through a “learning” phase that will see individuals and companies develop their own ways to cope with the persistence of the disease.

Cover your face

Mask usage has become less stigmatized. Wal-Mart Inc is making them mandatory as of Monday. A Cleveland Fed survey of 1,141 U.S. consumers showed nearly 90% said they wore a mask the last time they were in a public indoor space such as a store.

Expanded unemployment benefits

Benefits that will expire this month end

A recent study by the JPMorgan Chase Institute concluded that expanded unemployment benefits approved in response to the pandemic allowed those thrown out of work to actually increase their spending. Those benefits expire at the end of this month.

Unemployment insurance

Jobs, meanwhile, may not be returning fast enough to take up the slack. Another 1.3 million people filed for unemployment insurance last week USJOB=ECI, and several states that had tried to aggressively reopen their economies saw large jumps in ongoing unemployment claims as virus cases exploded and new restrictions were imposed.

Declined work shifts

Nationally, data from time management firm Kronos across a variety of industries showed work shifts for the week ending July 12 declined for the first time since mid-April, excluding holidays and businesses reduced hours.

Coronavirus daily record shattered

The United States shattered its daily record for coronavirus infections on Thursday. It reported more than 77,000 new cases as the number of deaths in a 24-hour period rose by nearly 1,000.

Toll spike

The loss of 969 lives was the biggest increase since June 10, with Florida, South Carolina and Texas all reporting their biggest one-day spikes on Thursday.

More than 138,000 Americans have died from COVID-19, experts warn of surge and an alarming rise in hospitalizations in many states.

Running out of space

The hardest-hit areas in Texas and Arizona are running out of places to store bodies as their morgues fill up and are bringing in coolers and refrigerated trailers.

Fall in death rate

  • U.S. deaths peaked in April, when the country lost on average 2,000 people a day. 
  • Fatalities have steadily fallen, averaging 1,300 a day in May and under 800 a day in June before rising again in July.

Warning from disease expert

The current tally of 77,217 cases surpasses the previous record set on Friday when cases rose by 69,070. In June, cases rose by an average of 28,000 a day, according to a Reuters tally. In July, they have risen by an average of 57,625 a day.

On Thursday, Texas reported over 15,000 new cases, according to a Reuters tally of county data, while Florida reported nearly 14,000 new cases and California almost 10,000.

Dr. Anthony Fauci, the government’s top infectious diseases expert, has warned that cases could soon top 100,000 a day if Americans do not come together to take steps necessary to halt the spread of the virus.

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Source: Reuters

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