Americans keep spending, even as layoffs continue

by Chris Stein and Heather Scott

Retail sales rose in the United States in June but weekly data indicated a steady flow of layoffs, and with the coronavirus outbreak worsening, analysts fear further deterioration in the economy’s health.

The US is home to the world’s worst coronavirus outbreak, with a record 67,632 cases reported in the previous 24 hours, bedeviling states’ efforts to get business back to normal.

The Labor Department on Thursday said new claims for unemployment benefits were at 1.3 million last week, higher than expected and barely changed from the week prior, meaning the surge in layoffs that began in mid-March as businesses closed has yet to subside.

Positive developments were seen in retail sales data released by the Commerce Department and in a survey showing growth among manufacturers covered by the Philadelphia Federal Reserve Bank.

But economists fear the tentative economic recovery seen in recent weeks will be throttled by the renewed onslaught of COVID-19 cases forcing states to roll back reopening.

“The reality is these numbers have remained elevated,” Adam Ozimek, chief economist at freelancing platform Upwork, said on Twitter of the weekly claims data.

“What this looks like is continued job loss and continued permanent business closures.” (AFP)