The foundations to this recovery are cracking under the weight of a mismanaged health crisis. Our Recovery Tracker fell for the third time in five weeks in the week ended July 10. The health index declined for the fourth consecutive week; demand fell for the second consecutive week, its largest decline in four months; and employment was unchanged.
While the rebounds in retail sales, employment, and industrial production through June were alluring, policymakers should not fall under the spell of rear-view-mirror economics. As of mid-July, the economy is emerging quite frail from its first rehabilitation phase, and the risks of a renewed downfall are real. More fiscal aid and adequate health policy are necessary to ensure a sustainable recovery in H2 2020.