The economic outlook is not encouraging, no matter how much the president wants to paint a rosy picture. The coronavirus is the primary culprit and the pandemic is not even close to being brought under control. Indications are that the virus and the associated disease will be with us for a long time to come. Moreover, the impact on the economy will be felt along with the disease.
Several indicators point to continued economic weakness and little optimism for an uptick.
The number of Americans filing for unemployment benefits came in at 1.31 million in the week ended July 4th, down from a revised 1.41 million claims in the prior week and below market expectations of 1.38 million. The latest number lifted the total reported since March 21st to 50.0 million, as record spikes in coronavirus infections forced several states to scale back or pause the reopening of their economies, sending workers home again.
The IBD/TIPP Economic Optimism Index fell to 44 in July from 47 in June, reaching the lowest since September of 2015. The relapse likely reflects concern about the impact of surging Covid-19 cases, especially across the Sun Belt.
On the positive side, the number of job openings in the US increased by 401,000 to 5.397 million in May from an over five-year low in the previous month and compared with market consensus of 4.85 million, reflecting a limited resumption of economic activity that had been curtailed in March and April due to the coronavirus pandemic and efforts to contain it.