Weekly unemployment claims rose to 1.4 million in the week ending July 11 — the first increase since March. The worse-than-expected jobs numbers appear to be the result of increased COVID cases in the new southern hotspots of Texas, Arizona, and Florida.
The below graphs from Goldman Sachs Research use mobility data from Google and workplace-activity data from HR firm Homebase. Of late, the Sun Belt has seen significantly lower activity than the rest of the country — reversing the trend from before June.
The good news is that the labor market is recovering nationally. The bad news is that the recovery is stalling due to new outbreaks of the virus: Goldman researchers expect employment to be roughly flat in July. It looks like the recovery will be “U-shaped” — we’ll reach pre-pandemic levels of output and employment in a reasonable amount of time, but the interim period will be volatile, with intermittent reductions and pick-ups in economic activity.