Virus surges. Work hours plateau. U.S. may be flattening the wrong curve

(Reuters) – The U.S. economic recovery showed signs of plateauing last week as the country battled rising coronavirus case counts and an increasingly fractured government response, according to data from a broad set of industry and government sources.

Indexes measuring the national recovery from the New York Federal Reserve here Goldman Sachs here and Oxford Economics https://www.oxfordeconomics.com have all largely stalled. Meanwhile real-time measures of retail foot traffic www.safegraph.com/dashboard and employee work hours joinhomebase.com/data and shifts have flatlined after steady growth since April spawned optimism for a swift rebound from the recession triggered by the global pandemic.

At the same time, evidence of retrenchment is spreading beyond the high-profile examples of Texas, Florida and California, major state economies where efforts to reopen commerce have been thrown into reverse by fresh restrictions to stop the spread of the COVID-19 disease.

Since the beginning of the fight against the pandemic the aim has been to “flatten the curve” – meaning stem the growth in infections. Instead, four months in, it may be the wrong curve that is flattening as the recovery slows while the virus surges ahead.

Atlanta Federal Reserve Bank President Raphael Bostic said on Thursday the early strength of the recovery surprised him, but “the question is as we have gotten to this point what should we expect moving forward.”

“Real-time evidence suggests there is a bit more reticence in the economy,” he said.

Data from cellphone tracking firm Unacast here as of July 3 showed more than half of states saw retail traffic surpass 2019 levels. A week later the number had slipped to 11, most of them rural, less-populated places like Maine and Montana.

For a graphic on Close, reopen, retrench Close, reopen, retrench:

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In industrial states including Iowa and Indiana where retail traffic has exceeded 2019 levels, case counts are growing – suggesting there is no clear template yet in place for how to reopen the economy in a way that preserves public health.

“People did have that initial impetus to reengage. Now we see a spike in infections and that is going to put a damper on the recovery,” said Elizabeth Crofoot, a senior economist at the Conference Board, an organization of major companies.

The board published a survey this week concluding that U.S. consumer confidence had been driven lower in part by lack of trust in the government’s ability to control the pandemic, and would likely remain…