As virus roars back, so do signs of a new round of layoffs

A sign outside the West Alabama Icehouse shows the bar is closed Monday, June 29, 2020, in Houston. Texas Gov. Greg Abbott shut down bars again and scaled back restaurant dining on Friday as cases climbed to record levels after the state embarked on one of America's fastest reopenings. (AP Photo/David J. Phillip)

WASHINGTON — The reopening of Tucson’s historic Hotel Congress lasted less than a month.

General manager Todd Hanley on June 4 ended a two-month coronavirus lockdown and reopened the 39-room hotel at half-capacity, along with an adjoining restaurant for outdoor dining. Yet with reported COVID-19 cases spiking across Arizona, Hanley made the painful decision last weekend to give up, for now.

“We are closing everything,’’ he said. “We are going to live to fight another day.’’

The move means that once again, most of Hanley’s employees will lose their jobs, at least temporarily. Except for roughly a dozen who are needed to maintain the century-old property, more than 50 workers he had recalled will be laid off for a second time.

A resurgence of confirmed COVID cases across the South and West — and the suspension or reversal of re-openings of bars, hotels, restaurants and other businesses — is endangering hopes for an economic rebound in the region and perhaps nationally. At stake are the jobs of millions of people who have clung to hopes that their layoffs from widespread business shutdowns this spring would prove short-lived.

On Thursday, the government is expected to issue another robust monthly jobs report. Economists have forecast that employers added 3 million jobs in June, on top of 2.5 million added in May, clawing back a portion of the record-high 21 million that vanished in April at the height of the viral shutdowns.

Yet any such news might already be outdated: The jobs report won’t fully capture the impact of the COVID upsurge in the South and West and the desperate steps being pursued to try to control it.

“We’re still in a very deep hole,’’ said Diane Swonk, chief economist at the firm Grant Thornton. “This makes the June employment report backward-looking instead of forward-looking.’’

Eager to jump-start their economies, governors in several states across the Sun Belt had lifted their lockdowns before their states had met reopening guidelines that were set — yet largely shrugged off — by the White House.

Reported infections quickly spiked.

The governors began to backtrack. Texas Gov. Greg Abbott last week ordered all bars closed. Arizona Gov. Doug Ducey told residents to stay home and declared that the state was “on pause’’ as the COVID cases stacked up. Florida also banned alcohol consumption at its bars.

The jarring reversals underscore what many economists had been stressing for months: That the economy and the job market can’t regain their health until business shutdowns have lasted long enough to reduce infections and most Americans feel confident enough to return to restaurants, bars, hotels, shopping malls and airports.

“It is the virus, not lockdowns, that dictates the course of the economy,” said Yongseok Shin, an economist at Washington University and a research fellow at the Federal Reserve Bank of St. Louis. “We cannot have a full economic recovery without reining in the epidemic.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.