Back in May and June, it looked like the economy might be pulling itself out of the doldrums pretty nicely. Businesses were starting to reopen, consumers were venturing out, workers were headed back.
But that was before COVID-19-related hospitalizations and deaths had starting to rise again. Now that they are, and officials in the South and West are shutting businesses down to stop the spread, rumors of the economy’s resurgence may have been premature.
There are a couple indicators showing the reopening recovery has stalled.
Nick Shields, an analyst at Third Bridge, follows retail foot traffic. It picked up in May. But now the resurgence of COVID-19 is taking a toll.
“Since late June, the biggest drop-offs are happening in Mississippi, Texas, South Carolina, Louisiana and Alabama,” Shields said.
Same story with jobs. Postings at the employment site Glassdoor are down 6% since the end of June.
So what kind of “recovery” does all this leave us with?
“We’re going to be seeing a W-shaped recovery,” said Camilla Yanushevsky, who tracks the consumer economy at CFRA Research.
That means trending down sharply, turning up a bit, then turning down again for the second half of the W. Yanushevsky said that’s probably where we are now.
“These reclosings, they’re driving consumers to be even more anxious about potential exposure,” she said. “It’s this fear that’s the biggest roadblock to any near-term sustainable improvement.”
All this fits with what independent florist Brooke Wetzel is seeing in her business. She said the giant wholesale flower market in downtown Los Angeles is operating sort of normally.
“Yeah, normal with mandatory face masks,” she said from the market.
Wetzel shut down in March and started up again a couple months later. She said folks still want to send flowers.
“People are still at home, and they can’t visit each other when they would’ve for a special occasion,” Wetzel said. “Babies are still being born. I mean, unfortunately people are still passing away. Everybody’s still having birthdays.”
Her business has been pretty good. But looking around the flower market, “I would say about three-quarters of the vendors are back, not everybody came back. They’re gone for good,” she said.
And with California closing businesses again, Wetzel hopes people don’t stop splurging on flowers.
COVID-19 Economy FAQs
How many people are flying? Has traveled picked up?
Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
What’s going to happen to retailers, especially with the holiday shopping season approaching?
A report out recently from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.
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