Europe's Economy Set to Outpace U.S. in Upending of Past Roles

The euro area economy is for once set for a sprightlier recovery from crisis than the U.S., thanks to starkly different responses to the coronavirus. America’s failure to get a grip on the pandemic is putting the brakes on its rebound compared with Europe, where many former virus hot spots managed to resume economic activity without causing a similar surge in infections.

Crucial for a sustainable recovery is confidence that the virus is no longer out of control, and Europe’s relative success may help encourage shoppers to spend and businesses to invest, further propelling demand and growth. The region has also done a better job of protecting jobs and incomes, with furlough programs keeping millions of workers on payrolls.

In the U.S., a jump in cases across the South and West has led several states to halt or even reverse reopening plans. Measures of mobility and restaurant bookings have plateaued, and more than 1 million applications for unemployment benefits continue to be filed each week. The U.S. economic situation could worsen if lawmakers don’t extend — in some form — the extra $600 per week in unemployment benefits that have supported incomes and spending in recent months.

In the U.S., the $2 trillion rescue package that Congress passed in March ranks among the most aggressive in history, but the distribution has been patchy and uneven. Unemployment offices were overwhelmed with claims, and many jobless Americans have still yet to receive the unemployment benefits they’re owed.

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