WASHINGTON, Oct 8 (Reuters) - U.S. hiring last week remained
sluggish, retail foot traffic dipped, and a surge in coronavirus
cases across the Upper Midwest even dented what had been a
carefree rush back to restaurants.
The outbreaks in states like South Dakota, Montana and
Wisconsin are the latest in the country's carousel battle with
the pandemic as hotspots rotate from one region to another,
preventing any broad recovery of confidence or the economy.
Since an early summer jump in U.S. economic activity, data
across a broad set of high-frequency indicators has
shown little evidence of the sort of steady improvement needed
for the country to dig out from a deep recessionary hole, with
more than 25 million people still filing for some form of
Employment over the week fell slightly at a set of small
businesses whose worker time is managed by Homebase https://joinhomebase.com/data,
new job postings monitored by Chmura http://www.chmuraecon.com/blog
Economics also declined, and shifts worked at a broad set of
industries flatlined according to time management firm UKG https://www.kronos.com/about-us/newsroom/update-us-workforce-activity.
Across key sectors whose recoveries may dictate any
sustained further fall in U.S. joblessness, the news is not good
heading into what should be a prime time of the year for
"The retail, food service, and hospitality sector, there has
been exactly no growth at all for the last five weeks - a
noteworthy trend on the eve of the holiday shopping season,"
said Dave Gilbertson, UKG's vice president of strategy and
operations. He cited "a lack of confidence across several key
areas by most businesses, including the direction of the
COVID-19 pandemic and whether consumer activity will warrant
Economists at the Indeed Hiring Lab also noted a slow start
to holiday hiring that traditionally accelerates in September.
Seasonal job postings are currently about 11% below last year.
That's one more drag on top of several the U.S. economy is
facing - foremost the persistent spread of the coronavirus. The
seven-day moving average of new cases is heading back toward
50,000, and for daily deaths it is lodged at just above 700.
Even as some regions have managed to tamp down caseloads and
progressively reopen their economies, the virus has popped up
elsewhere, be it the high-profile hotspot centered around
President Donald Trump's White House or a rapid outbreak in
states in the Midwest whose sparse populations would seem to
provide a buffer.
Cellphone data from Unacast https://www.unacast.com/covid19/covid-19-retail-impact-scoreboard
shows how that, at the margin, dents any national rebound. Foot
traffic to restaurants in South Dakota, for example, surged over
the summer at times reaching 40% above year-ago levels; as the
virus surged there this fall, it has fallen back roughly in line
That still is far above restaurant activity nationally: Data
from reservation site OpenTable https://www.opentable.com/state-of-industry
show the numbers of seated diners remain about 50% below last
But it is evidence of what Gregory Daco, chief U.S.
economist with Oxford Economics, deemed a "stuck-in-the-mud"
recovery that, at the national level, is never fully clear of
the weight of the virus on confidence and activity, and now
faces the loss of government spending support that had boosted
personal incomes over the summer.
Talks between the White House and the leadership of the
Democratic-led U.S. House of Representatives over another
pandemic aid package collapsed this week, dimming hopes that
ailing businesses and households would get fresh stimulus soon.
An Oxford http://blog.oxfordeconomics.com/topic/recovery-tracker
recovery index fell this week and has remained stuck at around
20% below the pre-pandemic level.
Retail traffic data from Safegraph https://www.safegraph.com/dashboard/covid19-commerce-patterns
also fell slightly this week, while new claims for unemployment
insurance for the week ended Oct. 3, at 840,000, showed little
change from the week before.
That's a discouraging sign to economists comparing the
economy's not-inconsequential improvement in some areas with the
massive gap still left in the labor market.
Some industries like housing and manufacturing continue to
rebound, and estimates of U.S. gross domestic product have
generally moved higher. A New York Fed https://www.newyorkfed.org/research/policy/weekly-economic-index#/interactive
estimate of GDP growth for the next 12 months for example
continues to rise, from a low that showed the economy shrinking
11.5% given conditions as of late April, to a decline of less
than 4.2% given current conditions.
But improvement in the job market seems turgid, with the
pain falling heaviest on low-income families who are also coping
with the loss of federal unemployment benefits.
The cooler months, JPMorgan economist Jesse Edgerton noted,
will pose "difficult choices" between moving activities like
restaurant dining back indoors and risking new viral spread, or
cutting them out and slowing the recovery.
In the scenarios economists are now using to frame their
forecasts, the combination of persistent disease and declining
government support adds up to the bad one.
"How the virus plays out, how policy plays out ... There's a
downside risk scenario that the improvement stalls out," with
the unemployment rate lodged at around 8%, roughly where it is
now, said Karen Dynan, a Harvard University economics professor
and senior fellow at the Washington-based Peterson Institute for
"If we don't get much more fiscal stimulus, don't have a
safe vaccine, damage from business failures and the scarring of
households that have suffered - that is where we end up."
(Reporting by Howard Schneider
Editing by Paul Simao)