(Reuters) – The U.S. economic recovery continued to hunt for traction over the past week with high frequency data on employment and retail traffic moving at a stodgy pace, pointing to a long trip back to normal.
Data released Friday on the August unemployment rate will show just how U.S. labor market repair has proceeded since a surprisingly strong jump in jobs in May and June, followed by more muted job growth in July.
Initial claims for unemployment benefits fell to 881,000 last week, a drop of 130,000 from the week before. However nearly 30 million Americans were claiming some form of unemployment benefit in mid-August and, excluding statistical changes to account for seasonal patterns, the number of initial claims has risen for three weeks, noted Indeed here Hiring Lab economist AnnElizabeth Konkel.
“Nearly six months into the pandemic, this is an alarming trend,” she wrote in an analysis.
Data provided by time management firm Homebase joinhomebase.com/data showed employment falling slightly at a sample of small businesses through the week ending Aug. 30. Company data since January show the limits of labor market repair so far, with small businesses across cities stuck in a range with around 80% of the workers they had on average in the first two months of the year.
Shifts worked at a broader set of industries continued to expand only slowly, according to data provided by Kronos here – a result consistent with disappointing results from payroll provider ADP this week pointing to slower-than-expected job growth in August.
Graphic: Employment in real time – here
JOB POSTINGS UP, HEALTH METRICS IMPROVE
Adjusting for the seasonal return of school staff, Kronos data showed the growth in shifts at retail stores, manufacturing plants, health facilities and elsewhere grew just half a percent for the week ending Aug. 30, still 10% short of pre-pandemic levels. While that was pulled down by closures related to Hurricane Laura, it was the sixth consecutive week of shift growth below 1% and “much slower than what we’ve experienced at any other point in the recovery,” said Dave Gilbertson, vice president of strategy and operations at Kronos.
By many measures the recovery does continue to chug forward through a persistent pandemic, based on a variety of high frequency data series economists and policymakers have turned to for insight on the health crisis.
New job postings aggregated from online and company websites by Chmura www.chmuraecon.com/blog Economics are now just below their March 1 level, a sign companies still see reasons to bring employees back.
New York Fed data tracking overall gross domestic product continued a steady rise, while an Oxford here Economics recovery index including health, economic and social statistics increased for the fourth straight week. It was edging near where it was in mid-March when the economic impact of the pandemic was just being felt.
But the details are telling. The index’s health and mobility metrics both improved – the daily growth in cases has eased in recent weeks and people are moving about more.
Graphic: NY Fed Weekly Economic Index – here
Graphic: Oxford Economics Recovery Index – here
August ended with roughly 1.45 million new cases in the month, down from July’s record increase of around 1.95 million, according to a Reuters tally here
But people are driving, still not flying, noted Oxford chief U.S. economist Gregory Daco, and “disappointingly, demand and employment have stalled … Stronger restaurant activity was offset by weaker retail, recreation and hotel demand along with reduced credit card spending.”
Data from restaurant reservation site OpenTable has shown a rise in activity at restaurants in recent weeks. But it remains just over half what it was as of the first of March, two weeks before a declaration of national emergency and orders in many states and cities for businesses to close temporarily.
Combined, the data point to a vexing problem for the economy going forward. Even as states lift restrictions on commerce, stores try to reopen and health measures improve, consumers may not be so fast to resume their old ways, and firms may adapt to scaled-down demand by bringing fewer workers back.
Overall spending for example was higher in July than it was a year ago, and data on visits to retail locations from cellphone tracking firms Unacast here and Safegraph here have steadily improved. Through last weekend Safegraph in particular showed retail foot traffic near where it was on March 1.
But the expiration of government unemployment insurance benefits alone has sapped roughly $18 billion a week in income from consumers, many of them in low- to middle-income households that are more likely to spend the dollars they receive.
Graphic: Retail in real time – here