The relentless rise in Covid-19 cases in the U.S. represents a growing downside risk to its economic recovery, warns Fitch Ratings.
In a new report, the rating agency said that, while U.S. economic activity started ramping up in May and June, the recent spike in Covid-19 infections poses a threat to third quarter growth.
The number of new cases being reported in the U.S. each day is now above 60,000, compared with the previous peaks in April at under 40,000 daily cases.
This, in turn, has prompted renewed lockdown measures, or delays in reopening, in some of the largest U.S. states (by GDP), including California, Texas and Florida.
“Re-opening delays and renewed social distancing disruptions are a material downside risk to our forecast of a 4.6% rise in U.S. GDP in Q3,” said Brian Coulton, chief economist at Fitch.
The report also noted that data indicate retail visits started to decline again in July.
“A renewed sharp and sustained fall in mobility across the country would weigh very heavily on the leisure and hospitality sector,” the report stated.