The increase in coronavirus infections in dozens of states puts at risk the recovery of the economy of U.S, by forcing businesses and consumers to freeze their expenses and maintaining a high unemployment rate.
The government reported Thursday that retail sales grew 7.5% in June, but the positive trend was undermined by recent data showing that spending on credit cards has been stagnant. A separate report revealed that more than a million Americans applied for unemployment benefits last week, a sign that companies continue to reduce their payrolls as the virus takes hold in the region called “Belt of the Sun”, which has a high population.
Economists fear that any positive momentum could come to an end in the coming months if the number of cases and deaths from COVID-19, forcing the closure of more shops.
“Conditions in the labor market remain weak, and the risk of accumulating permanent job losses remains high, especially if activity continues to be disrupted by repeated closures related to the coronavirus,” said Rubeela Farooqi, chief economist from High Frequency Economics.
“Conditions in the labor market remain weak, and the risk of accumulating permanent job losses remains high, especially if activity continues to be interrupted by repeated closures related to the coronavirus.”
It was the 17th week in a row that the million grant requests for unemployment. Before the pandemic, in an average week around 200,000 people signed up for benefits.
Data from the Labor Department was released at a time when the country records a disturbing number of infections. Florida reported a record 156 deaths in a single day, and nearly 14,000 new cases, emulating the national trend in deaths this week. The weekly average of new deaths rose to 730, an increase of more than 21% from last week.
Infections are on the rise in 40 states, and 22 of them have suspended or reversed the reopening of their economies, according to Bank of America.
Both businesses and consumers adjust to the perpetual risk of outbreaks.
From our print edition today:
Restaurants and shops have been forced to make Darwinian leaps to survive. Cash payments are a thing of the past. Today is home delivery. Minimal staff keeps retail businesses afloat. This is a time of caution and innovation that is likely to create permanent changes in the way Americans spend their money. Perhaps the normality we knew will not return.
At the R. House Baltimore dining hall, all orders and payments are now made through an app, Toast TakeOut. Consumers gather on an outdoor patio instead of inside what used to be an automotive agency. That reduces the dining room’s capacity to 100 diners from the 350 it housed before the pandemic, and forces companies to be more dependent on the take-away service.
But the payment app has been very convenient for customers, who no longer have to wait in line in front of the checkouts and can settle in their places while ordering from local restaurants, ranging from tacos and Korean grill to Hawaiian dishes and the fried chicken sandwiches.
“We will certainly continue to use this technology,” said Peter DiPrinzio, director of food and beverage for the community restaurant room.
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