Weekly Economic Briefings - Us Weekly Economic Briefing
Data released this week confirmed the economy experienced a strong initial recovery phase in May, with consumer spending bursting back to life and factory activity resuming. But real-time data suggest the economy has already entered the slower second phase of the recovery. With Covid-19 infections surging nationwide, a swift reversal of momentum is a key risk. After improving for 10 weeks in a row, our Recovery Tracker fell 0.4ppts to 72.9% in the week ended June 12 due to renewed financial market stress and rising Covid-19 infections. And, the preliminary data for the week ended June 19 points to moderate momentum restrained by a slower pace of employment and cautious demand. Looking ahead, the fate of the recovery mostly depends on whether the recent flare-up in infections is contained. If the health situation continues to deteriorate, confidence will follow suit. This will lead to reduced mobility, less employment, and eventually slower demand with significant financial market risks. Failure to provide further fiscal stimulus is another key downside risk.
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