Retail Group: Rise in Covid-19
Cases Cause for Concern
By Steve Rensberry
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EDWARDSVILLE, IL - July 4, 2020 -- National Retail Federation (NRF) Chief Economist Jack Kleinhenz cited a number of positive economic signs this past month, even as the country continues to battle the Covid-19 health emergency, but expressed concerns about a prolonged recovery given the rising number of cases in the country.
“Before we prematurely celebrate the return of the consumer, the wave of new coronavirus outbreaks spreading throughout the country are a major threat to the recovery,” Kleinhenz stated in a July 1 news release. “These outbreaks are alarming, and if they accelerate will certainly sway consumer and business confidence, taking a toll on output and employment and prolonging the time it takes to achieve a true economic recovery.” Kleinhenz's concerns were published in the July edition of the NRF's Monthly Economic Review. Among other things he noted:
- The U.S. economy officially entered a recession in February according to the National Bureau of Economic Research, a declaration that has usually taken from six to 18 months.
- The stock market just ended one of the best quarters it has seen since 1998, recovering almost all of the losses that it saw in the first quarter.
- Payrolls were up by 2.5 million jobs in May.
- Consumer spending was up that same month by 8.1 percent, and retail sales by about 18 percent.
- Despite the economic high points, all are below last year's levels.
The CBIZ Small Business Employment Index (SBEI) meanwhile, showed June business hiring was “strong,” all things considered, though we're not there yet.
A June 2 news release shared a word of cautious optimism from CBIZ Executive President Philip Noftsinger: “The June data displays the first real signs of hiring growth since the COVID-19 pandemic prompted nationwide business closures and pullbacks in March. There is a long runway for recovery, but the June data shows positive momentum. Notably, June 2020, which falls on the CBIZ SBEI's 11th year anniversary, denotes the highest reading for the index history for June.”
Other key points:
- ADP and Moody's employment report data shows private-sector employment up by 2.37 million from the previous month (seasonally adjusted)
- Small business employment was up 937,000 jobs.
- With the exception of the information industry sector, “positive hiring trends” were seen in almost every industry.
- Relatively half of the nation's small businesses, 51.4 percent, held steady with respect to employment; roughly one-third, 30.1 percent, showed gains; and the remainder, 18.5 percent, had lower employment levels.These positive trends, however, are likely to see lowered momentum in the coming weeks or months, according to the June report, with rises Covid-19 cases in certain states, forcing further restrictions on business operations.
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