Illustration: Eniola Odetunde/Axios

The economic progress made by the U.S. over the last month is slowly falling apart. Three of the four most populous states in the country are seeing notable increases in confirmed cases of COVID-19, business activity is contracting, consumer confidence is retreating, bankruptcy filings are rising, and the stock market is falling.

Why it matters: Even before governors in various states announced new bar and restaurant restrictions on Friday, "high frequency data on service sector activity suggests businesses and consumers may already be responding to the surge in new cases," economists at asset manager Nomura wrote in a note to clients.

  • Economists at Deutsche Bank note, "states with faster case growth are now underperforming economically based on measures of small business activity, restaurant bookings and consumer spending."

The state of play: In March, as it became clear the coronavirus pandemic would severely impact U.S. businesses and consumers, the Fed stepped forward and led the way with extraordinary policy action — cutting rates from 1.50%–1.75% to near zero in a matter of weeks and announcing an unlimited quantitative easing program.

  • Congress followed, passing the largest spending bill in U.S. history, and already is on pace to borrow nearly $4 trillion for fiscal year 2020 (which ends Sept. 30).

Yes, but: There is growing evidence that the Fed's programs are not benefiting ordinary Americans and congressional action has missed the mark.

Where it stands: So far, the Paycheck Protection Program looks to have excluded many of the most needy businesses and close to 90% of the government's $500 billion loan program for bigger companies remains untapped.

  • Larger firms have preferred public markets — where they can borrow at record low rates thanks to the Fed's actions — over lending from Congress that requires executive compensation limits and freezes on layoffs.

What to watch: Economists at Jefferies point out, "Congress has to deliver the Phase 4 legislation in the narrow window between July 21-31."

  • July 21 is the first day both the House and Senate are back in session following the July recess, and July 31 marks the expiration of expanded traditional unemployment benefits and pandemic unemployment assistance, which was being utilized by around 12 million people, as of Thursday's report.

Go deeper: The (near) cashless society arrives

Go deeper

The price of Washington's stimulus failure

Illustration: Eniola Odetunde/Axios

America's elected representatives have failed America.

Why it matters: The bipartisan inability to deliver economic stimulus could impede economic growth for months to come. It will create widespread damage across America — from small businesses to large industries to schools and day cares — and leave many Americans without jobs or homes.

Sep 21, 2020 - Health

U.K. upgrades COVID alert level as Europe sees worrying rise in infections

British Prime Minister Boris Johnson leaves Downing Street on Sept. 21. Photo: Leon Neal/Getty Images

The U.K. could see up to 50,000 coronavirus cases per day by mid-October if current growth continues, top scientific advisers warned in a televised address from Downing Street on Monday.

The big picture: The U.K. has upgraded its coronavirus alert level from three to four as infections appear to be "high or rising exponentially." Meanwhile, recent European Center for Disease Prevention and Control (ECDC) data shows that over half of all European Union countries are seeing an increase in COVID-19 cases.

Updated 22 hours ago - Health

World coronavirus updates

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Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Axios Visuals

A coalition of 156 countries agreed Monday to a "landmark" agreement aimed at the fair distribution of COVID-19 vaccines around the globe, the World Health Organization announced Monday.

The big picture: 64 higher-income countries, including European Union members, are among the signatories to the deal, known as "COVAX." The U.S. is not participating in the scheme.

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