Terminated Shop-Vac employees demonstrate in front of the company's headquarters in Williamsport, Pa. on Sept. 28 after the company announced 427 workers would lose their jobs, blaming Covid-19. Photographer: Paul Weaver/Pacific Press/LightRocket via Getty Images

Key Parts of U.S. Recovery Show Signs of Stalling Near Election

Two weeks before the election, the U.S. economic rebound is losing steam against a backdrop of dwindling government support, rising Covid-19 cases and cooler weather.

Bloomberg Economics created a weekly dashboard of high-frequency, alternative and market-based data to track the economy’s plunge into recession and eventual recovery. Several of the dashboard’s indicators, including jobless claims and restaurant bookings, either worsened or showed no improvement. Others, such as a weekly measure of retail sales, continued to slowly advance.

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Nearly 386,000 new virus cases were recorded last week — the most since July — underscoring the difficulty of a full economic recovery without a vaccine, though Covid-19 deaths fell to a three-month low.

With government aid to many small businesses, the nation’s airlines and the unemployed either expired or dwindling, the labor market rebound has notably slowed. The number of long-term unemployed has increased, and Americans are increasingly exhausting their regular state jobless benefits and moving onto a federal program for longer-term support.

Applications for state unemployment insurance rose to the highest level since August, and a host of companies across industries have announced or begun fresh job cuts. A measure of new job postings also decelerated.

Cooler weather in many parts of the country also threatens to unwind progress at the nation’s restaurants and bars. About two-thirds of the jobs lost in food services and drinking places have so far been recovered — with a solid increase in September — but chillier temperatures may curb outdoor dining and threaten another wave of job cuts.

Data from OpenTable, a restaurant-booking platform, showed reservations pulled back slightly from the prior week and are now about 41% below where they were a year ago.

“The number of cases are up across the country, but another round of lockdowns will likely be more targeted than the measures taken at the height of the spring virus outbreak,” Bloomberg economist Eliza Winger said. “Still, caution among businesses and consumers will likely prevail. Stalled fiscal-support negotiations and the upcoming elections add to uncertainty.”

Bloomberg Economics expects the October jobs report early next month to show the first decline in payrolls since April after multiple months of slowing employment growth, the unwinding of temporary jobs for the decennial Census and more subdued hiring for the holiday shopping season.

Meanwhile, lawmakers continue to wrangle over another large stimulus package. President Donald Trump has said he’s ready to match the $2.2 trillion in spending proposed by Democrats, but it remains doubtful the Republican-controlled Senate will accept such a large relief package before the presidential election.

Surge in Virus Cases Continues as Jobless Claims Increase

Selected key indicators from recovery tracker model

Note: Jobless claims are not seasonally adjusted.

Sources: Bloomberg/Johns Hopkins University, Department of Labor, OpenTable

At the same time, some parts of the economy continue to improve or have already returned to pre-pandemic levels. The housing market is a good example, with several indicators above February levels as record-low mortgage rates support demand. The S&P 500 Index remains near historical highs.

Meantime, Johnson Redbook’s weekly measure of retail sales exceeded year-ago levels for a fourth straight week, suggesting consumer spending may be more durable than originally expected in the wake of declining government support.

The pandemic’s lingering impact is particularly visible in travel metrics, however. Public transportation usage, while slightly improved, remains a fraction of its pre-pandemic level. Airline traffic also remains depressed, though U.S. airport security checkpoints processed more than 1 million travelers for the first time in seven months on Sunday.

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