Rising infections threatening U.S. economic recovery

BALTIMORE >> Rising coronavirus infections across dozens of states are threatening the U.S. economic recovery, forcing businesses and consumers to freeze spending and keeping the unemployment rate stubbornly high.

The government reported Thursday that retail sales rose a sharp 7.5% in June, but the positive trend was undercut by more recent data showing that credit card spending has stalled.

A separate report showed that more than a million Americans sought unemployment benefits last week — a sign that companies continue to cut jobs as the virus slashes through the heavily populated Sunbelt. Economists fear that any positive momentum could come to a halt later this summer if infections and deaths rise and more businesses close.

“Conditions in the labor market remain weak and the risk of mounting permanent job losses is high, especially if activity continues to be disrupted by repeated virus-related shutdowns,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

The Labor Department data emerged as the nation saw more troubling infections. Florida reported a single-day record of 156 deaths, along with nearly 14,000 new cases, mirroring a broader trend this week that has seen the national death rate spike. The seven-day rolling average for new deaths has risen to 730, a more than 21% increase from a week ago.

Brazil surpassed 2 million coronavirus cases as the pandemic entrenches itself in poorer and more remote regions, wreaking havoc on Latin America’s largest economy.