In this news, we discuss the Across U.S. electoral battlegrounds, recovery may be ebbing as virus flows.
WASHINGTON (Reuters) – The summer push to get rid of masks and rush back to normal life, particularly intense on U.S. electoral battlefields like Wisconsin and Michigan, has ended where many experts in the era predicted: with a virus that still spreads quickly and an economic recovery.
With the daily growth in the number of cases in many Republican-trending regions and on the rise nationwide, high-frequency economic data has shown that the economic recovery is potentially stalling in states critical to the country’s chances. President Donald Trump in a presidential vote in two and a half weeks.
This includes the ‘rust belt’ states that sparked his victory in 2016 as well as the Western Plains states considered to be an integral part of his base – all places his supporters were wary of masks and other measures to protect him. mount a unified national response to the pandemic.
For Trump, trailing in most polls to Democratic challenger Joe Biden and trailing by his response to the pandemic, the initial instinct was to avoid national health restrictions in favor of faster economic reopening.
This gambit did not bear fruit.
A follow-up to the state-level recovery from Oxford Here Economics now shows that economic progress has slowed or plummeted in seven electoral swing states, “and with the virus resurfacing again in the Midwest, that probably means that conditions will weaken as the elections approach, ”said Oxford analyst Oren Klachkin.
Graphic: Rapid summer, slower fall in swing states
Analysis from Homebase joinhomebase.com/data, which manages employee time for small businesses like restaurants, showed that many states have seen a decline since mid-July in the number of open businesses, decreases and highest in states like Wyoming and South Dakota where the virus is currently the fastest growing and more moderate in the swing states of Wisconsin, Michigan, Ohio, and Pennsylvania.
Chart: Small business openings since mid-July
National foot traffic data from Safegraph here and Unacast here have all declined over the past week. An Unacast recovery tracker showed that a nation was potentially slipping backwards. At its peak this summer, more than half of states had seen point-of-sale traffic push back above 2019 levels; last week the number had dropped to four – Mississippi, South Dakota, Wyoming and Montana.
Graphic: Retail in real time
In a wide range of industries where employee time is managed by UKG here, “workforce activity has collapsed,” said Dave Gilbertson, vice president of strategy and operations at UKG, with shift growth declining steadily since Labor Day, and now declining. for companies with less than 100 people.
Graphic: Jobs in real time
“Businesses appear to be reaching the inflection point of the resumption of work,” he said, reflecting “concerns about consumer activity over the coming holiday season and long-term economic stability facing a stalled employment recovery and a second recovery from COVID-19. cases across the pockets of the United States’
A labor demand index calculated by Chmura www.chmuraecon.com/blog remained stable throughout the fall, with new job openings at around 80% of their expected level without the pandemic .
MORE LOOKING LIKE A ‘K’
The Federal Reserve and other officials are increasingly concerned about the sustainability of the US economic rebound.
Overall, measures of economic output remained stronger than expected in March, when the pandemic took hold and triggered the most severe post-war economic recession.
While the US economy remains technically in recession, growth from July to September has been strong, and by the end of the year some estimate the size of the US economy could be around 2.5 percentage points. percentage of what it was at the end of 2019 – a remarkable result. against the background of the collapse recorded in March and April.
A New York Fed index based on more frequent weekly data showed a steady improvement in expected gross domestic product, the most general measure of economic output.
Chart: New York Fed Weekly Economic Index
Tracking of Oxford’s national recovery using health, social and economic data has increased over the past week.
Chart: Oxford Economic Recovery Index
But the Oxford index also remained tied at around 80% of what it was before the pandemic, showing the limits of the recovery in the absence of some turnaround in the health crisis.
There are also fears that the economy will crack further if the virus erupts in the fall, with millions already unemployed and large businesses, especially in the vulnerable service sector, still awaiting return from customers.
Even with an increase from last week, restaurant seats listed by OpenTable remain below 70% of their March 1 level.
More broadly, the labor market has been adrift. The unemployment rate fell faster than expected, but in part because millions of people gave up looking for work altogether. Every week, hundreds of thousands of people join the unemployment line, with the number increasing from 53,000 to 898,000 for the week ending October 10.
This is a situation that undermines the populist argument used by Trump in 2016. Stock markets and the economy in general continue to advance, but many workers are left behind and others are tied to industries. who do not recover – a disconnect between macroeconomic performance and what is happening. felt across households.
“We are seeing manifestations of a ‘K’ shaped recovery under a macro ‘U’, of steady growth from the spring low point,” said Nathan Sheets, former Fed official and economist in chief of PGIM Fixed Income. “High-income households are doing quite well, lower incomes are more severely affected by the pandemic.
Reporting by Howard Schneider; Editing by Andrea Ricci
Original © Thomson Reuters