High-frequency measures of the U.S. economy may be showing the first signs of an expected spring revival, with employment at small and medium-sized businesses rising slightly, and traffic to retail stores improving from the levels of last fall when the coronavirus surged.
The challenges facing the U.S. economy remain mountainous. Nearly 800,000 people filed for unemployment insurance in the week ended Feb. 6, and as of late January more than 20 million were collecting some form of unemployment benefit – 10 times the typical level.
Overall job growth has been sluggish since the fall, barely nipping at the 9 million job hole left by the pandemic, and data from online reservations firm OpenTable here and the U.S. Transportation Security Administration show little improvement in the hard-hit restaurant or travel industries.
But analysts have become more confident that as the weather warms and vaccinations become more widespread, the economy will thaw also, and some data already points at least tentatively in that direction.
January was “a transition month for economic data,” as the vaccine rollout began, some states started easing restrictions on commerce, and some federal benefit payments resumed following congressional action in late December, wrote Jeffries economists Aneta Markowska and Thomas Simons. “By February, we expect a broad-based improvement in growth momentum.”
Foot traffic to retail stores fell after a holiday surge, according to cellphone data gathered by Unacast here, but resettled at levels above last fall when a new pandemic wave pushed the number of daily infections well above 200,000. The number of daily new infections has fallen by half since then.
An index of shift work at a broader set of industries rose in early February to its highest level since November after falling in December and January, according to data from time management firm UKG here.
Shift volume rose 1.2% from early January to early February, and significantly the increase was about the same at companies with fewer than 500 people as it was for the larger firms that had dominated any recent improvement in labor use, said UKG vice president David Gilbertson.
There are “tentative signs of labor recovery” heading into February, he said, as well as “some positive tailwinds – such as increasing vaccinations, loosening restrictions, and warmer weather” ahead.
Indexes of current and new job openings from hiring site Indeed www.hiringlab.org and analytics firm Chmura www.chmuraecon.com/blog have both increased since the start of the year.
An Oxford here Economics broad index of the recovery rose for a fourth consecutive week, the first month-long improvement since the summer. The firm now expects 2021 U.S. economic growth to near 6% given the expected addition of more government spending. That is up 1.7 percentage points from January’s forecast.
“Green shoots” started appearing in January as the health metrics improved, chief U.S. economist Gregory Daco wrote recently, and should take root as vaccinations proceed.
“The state is set for a spring revival.”