New York Fed weekly economic index reverses again
The New York Fed's Weekly Economic Index turned lower for the week ending Aug. 1, showing real-time, high-frequency economic data again weakening in the last week of July.
Why it matters: The index turned negative again after an upwardly revised previous week. It supports other recent real-time economic data that show U.S. growth reversing.
What they're saying: "The recent evolution in our coincident employment index suggests that the recent recovery in employment has halted and that the increase in Covid-19 may be the main cause for this," economists at the St. Louis Fed wrote in a blog Tuesday.
- "Thus, a strong economic recovery may need a healthy recovery from the pandemic."
Where it stands: The weak employment growth, especially in states hard hit by recent virus outbreaks, noted by the St. Louis Fed, pairs with consumer spending data from JPMorgan Chase.
- Their data show the economic recovery has been stuck in neutral since mid-June, as evidenced by spending patterns from Chase debit and credit cardholders.
Be smart: JPMorgan analysts also pointed to a gap between spending by millennials and Gen Z consumers, which fell 4.1% compared to 2019, and spending by baby boomers, which dropped more than 18%.
- The data suggest older, wealthier consumers with ample cash are paring back and adding to savings while less wealthy consumers continue to spend at similar levels, thanks largely to government assistance programs.