- Various metrics tracking the US
economic reopening pared gains after Labor Day spending proved short-lived. - The holiday weekend lifted Goldman Sachs'
reopening scale to five out of 10 last week as spending on restaurants, hotels, and travel improved. - The gauge sank back to four out of 10 this week, with the bank citing losses in several back-to-normal categories including sports TV ratings and commute times.
- Oxford Economics' recovery tracker erased late-August gains on the first week of September. Tech stocks' tumble slammed the gauge's financial component, and mild gains to the demand segment were led by a "transitory" Labor Day boost, the firm said.
Gauges tracking the US
The holiday weekend fueled gains across hotel, restaurant, and travel spending last week. Goldman Sachs' US Reopening Scale improved to five out of 10, marking a symbolic halfway point in the nation's recovery 19 weeks after the bank began tracking progress.
Yet new readings suggest the Labor Day bump was short-lived and did little to place the economy on a stronger foundation.
Oxford Economics' recovery tracker erased end-of-August gains and fell 0.3 points to 80.9 over the first week of September. While a drop in new COVID-19 infections lifted the gauge's health component, credit card spending metrics fell and demand gains were concentrated in "transitory" holiday activities. The S&P 500's tech-led slump over the period eroded Oxford's financial segment.
Goldman's gauge showed a similar trend, falling back to four out of 10 for the week of September 16. Several "back-to-normal" categories including sports TV ratings, commute times, and dining spending retraced Labor Day gains, the bank said. Strong use of video conferencing apps and online payments pointed to steady stay-at-home activity.
The composite score underlying Goldman's Reopening Scale sank 6 points this week to 68 from a revised reading of 74. The decline is the biggest single-day drop for the gauge since the onset of the
The two trackers' declines arrive as other economic indicators moderate after months of healthy improvements. New US jobless claims made over the week ended Saturday fell to 860,000, the Labor Department announced Thursday. The decline is smaller than those seen through the summer, and the reading missed the consensus economist estimate of 850,000 filings.
Several economists point to the slowdown as a sign additional fiscal stimulus is needed to keep the rebound on track. Legislators have made little progress in reaching a compromise on a new spending measure. Senate Democrats blocked Republicans' $500 billion bill last week, and the two parties remain hundreds of billions of dollars apart in their proposals.
Republicans argue a larger bill could ratchet up the US deficit to dangerous levels. Democrats, on the other hand, believe a bill around the size of March's $2.2 trillion CARES Act is necessary to keep millions of jobless Americans afloat.
The White House inched closer to meeting Democrats' goal on Wednesday. The administration indicated it is open to a $1.5 trillion measure, up from its previous target of $1.3 trillion. Still, such a sum would require swaying some Republicans who oppose a bill larger than $1 trillion.