Editor’s note (December 4th): Since publication of this article the latest data release shows that jobs growth in America has slowed sharply. The economy added 245,000 jobs in November, down from a monthly average of 1.9m during the summer and autumn.
IN THE SUMMER and autumn America’s economy roared back. After peaking at nearly 15% of the labour force, unemployment fell like a stone, while in the third quarter GDP bounced from its lockdown-induced slump. The recovery of the world’s largest economy seemed oddly impervious to a second and then a third wave of coronavirus infections, even as economic activity in other parts of the world took a hit.
Yet there are growing concerns that the run of surprisingly good economic news is over, at least until a vaccine becomes widely available. In congressional testimony on December 1st Jerome Powell, the chairman of the Federal Reserve, said the recovery was slowing, while the decision on the same day by a bipartisan group of senators to release a proposal for a stimulus package reflects the same fears. The jobs report for November, which was to be released shortly after The Economist went to press, will probably be a downbeat one by recent standards—and whatever it shows, it is old news, since the surveys for the report were taken some weeks ago. More up-to-date figures show that the recovery has lost steam. That is bad news for the millions who remain out of work, as well as the rapidly growing share of Americans who are living in poverty.
Official statistics tend to be produced with long lags. So during the pandemic economists have turned to “high-frequency” data, largely produced by the private sector and generated by consumers’ and firms’ transactions, to measure the economy in real time. Wall Street banks now routinely provide clients with updates on everything from weekly electricity consumption to daily hotel bookings. The high-frequency data do not map onto the official kind perfectly. But they are useful for finding turning-points. They pinpointed the start of the downturn in March long before the official statistics could.
America is at another turning-point. STR, a data provider, finds that in the week ending November 21st hotels were running at 40% occupancy, down from 50% only weeks ago. The number of diners in restaurants has sharply declined in recent weeks, suggest data from OpenTable, a booking platform, with the fall even steeper in the states hardest hit by the virus. A recovery in air-passenger numbers appears to have ground to a halt as well.
Other real-time measures capture economic activity more broadly. The share of small firms which have temporarily closed is probably rising. Consumer spending in the week ending November 22nd was down by 5% compared with the one before, according to Cardify, a data provider. Using mobility data from Google, The Economist has constructed an economic-activity index measuring visits to workplaces, transport hubs and…
Go to the news source: You must believe in spring – America’s economic recovery no longer looks so stro…