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Special Report

National Economy - Beyond the Health Crisis

Summer 2020

Reopening the Economy Results in Balancing Act as COVID-19 Cases Surge Alongside Job Gains and Greater Consumer Spending

Consecutive months of retail sales growth spur excitement, the reemerging health crisis poses risks. Many states began reopening in May, which helped prop up the economy after a lengthy shutdown. Allowing consumers to shop in person contributed to the largest monthly retail sales jump on record in May, followed by another gain in June. Consumers have been willing to spend despite the uncertain economic environment as the unprecedented government support provided over the past months has helped solidify household budgets. Through June, restaurant bookings, air travel and hotel occupancy have all been on the rise, proving that many consumers are ready to get out of their residences and willing to spend money. However, rising COVID-19 case counts and hospitalizations in states that reopened earliest are representative of the national risk that comes with trying to kick-start an economic recovery this summer. Reopening too quickly could strain hospital resources and coax legislators to re-enact restrictions, as seen with California’s recent pullback, ultimately slowing the economic recovery in the long run. These trends exemplify why a medical solution is key to upholding consumer confidence and encouraging a return to pre-COVID-19 spending habits.

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