The coronavirus halted economic activity in the US with alarming speed, but reopening the economy is already proving to be a much slower and more difficult process.
Bloomberg Economics created a weekly dashboard of high-frequency, alternative and market-based data to track the economy's plunge into recession and eventual recovery. Most figures, like consumer confidence and applications for unemployment benefits, are showing slight but steady improvement. However, a few others, such as a measure of retail sales, have deteriorated.
Shops and restaurants are reopening across the country, and government stimulus has helped support rehiring. That rehiring was stronger than expected in May, with employers adding 2.5 million workers to payrolls in the month. Even so, Federal Reserve Chair Jerome Powell has warned that there will likely be millions of Americans who won't be able to return to their old jobs — or find work in their own industry — for quite some time.
Recent reopenings, paired with widespread protests in the wake of George Floyd's death, have also corresponded with an acceleration of new Covid-19 cases in some places. New cases increased for a second straight week, and many customers remain wary of rushing back to reopened businesses. Concerns about a second wave of infections have escalated, and that could have a significant impact on any economic recovery.
"The economy continues to reopen — lifting consumer sentiment. Dining out, public transport and airline passenger traffic is on the mend, but retail sales decelerated to a new low compared to year-ago levels," said Bloomberg economist Eliza Winger. "While weekly data can be choppy, it is also a reminder that a rebound in the key engine of economic growth — consumer spending — may be limited by massive dislocation in the labor market and tepid wage-income growth."
Amid the reopenings, spending remains sluggish, signaling that it will likely take time to rebound to pre-crisis levels. A weekly indicator of retail sales, Johnson Redbook same-store sales, decelerated to the lowest level of the pandemic compared to year-ago levels.
Initial jobless claims for regular state programs have continued to fall but still totaled 1.5 million in the week ended June 6, more than double the worst week during the Great Recession. That figure also doesn't include the millions of applications for Pandemic Unemployment Assistance, the federal program that expands benefits to those not previously eligible like self-employed workers.
In more positive news, the Bloomberg Consumer Comfort Index, a weekly confidence measure, rose to 38.7 at the start of June. While the increase was the third straight, the longest such stretch since the start of the year, the improvement has been gradual. The confidence gauge had previously plummeted to 34.7 from a mid-March reading of 63, the steepest drop in more than three decades of data.
A real-time indicator of the housing market — mortgage applications for home purchases — has fully recovered to pre-pandemic levels in recent weeks, rebounding to the highest level since January.
With many restaurants now open to dine-in customers, data from OpenTable, a restaurant-booking app, have shown marked improvement. Bookings are down 65% from last year, still devastatingly weak, but up from minus 80% just the week before.
Disclaimer: This article first appeared on Bloomberg.com, and is published by special syndication arrangement.