Mick Mulvaney wants Phase 4 dollars to get primarily directed at testing, arguing that Congress has done enough on the economic “symptoms” and should focus on the actual disease. Not everyone agrees, or at least not everyone thinks that three trillion dollars in various economic stimuli is sufficient. With COVID-19 cases spiking — and deaths in some states — economists warn that the country might tip immediately out of recovery mode when the programs run out.

The Washington Post’s David Lynch rounded up the latest harbingers of pessimism, if not doom, on Saturday evening. However, Lynch’s analysis is missing a key ingredient — metrics:

But without a uniform federal strategy, many governors rushed to reopen their economies before bringing the virus under control. Now states such as Florida, California, Texas and Arizona are setting daily records for coronavirus cases and more than 70 percent of the country has either paused or reversed reopening plans, according to Goldman Sachs.

After two surprisingly strong months, the economy could begin shedding jobs again this month and in August, Morgan Stanley warned Friday. Many small businesses that received forgivable government loans have exhausted their funds while some larger companies are starting to thin their payrolls in preparation for a longer-than-expected downturn.

Fresh labor market weakness would represent a profound disappointment for millions of American workers and President Trump, who is eager to highlight economic progress with only a few months remaining before the November election.

“ ‘Stalling’ is the word I’m using,” said Jim O’Sullivan, chief U.S. macro strategist for TD Ameritrade. “But the risk there is that the numbers start turning negative again.”

All of these sound as though they could happen, and indeed that’s precisely how Lynch frames it. The issue, he writes, is the soon-to-be-exhausted supply of government spending on economic backstops:

Millions of additional layoffs could come soon from cash-strapped state and local governments, unless Congress provides additional relief, and small businesses that have exhausted their borrowing under the Paycheck Protection Program. In a survey of its members, the National Federation of Independent Business said more than half of respondents had used up their loans and 22 percent planned to lay off workers as a result.

This is certainly the fear that is driving debate on Phase 4, but that’s all but certain to pass now. The only debate now is how much to spend and in what form. Republicans want to spend it on direct stimulus, Democrats want it directed at state and local governments, and Mulvaney wants it aimed at the disease itself. Likely we will see a mix of all three in the final bill, and it’ll probably come it at $2 trillion or higher.

At the moment, though, the economic indicators themselves still look pretty good. The markets had a big day today, at least in the first half, even with the COVID-19 spikes. Investors don’t see disaster in the near term, at least, and they got even more optimistic after news of a fast-tracked vaccine trial:

Stocks rose on Monday, pushing the S&P 500 into positive territory for the year, a mystifying comeback led by technology stocks that comes amid still rising coronavirus cases.

The S&P 500 gained 1.5% and was last higher by 0.05% for the year. Shares of Apple and Amazon rose 3% each to drive the Monday’s gain. Those two have also been the leaders of the market’s comeback. Pfizer jumped 5% on vaccine developments, also boosting sentiment.

The Dow Jones Industrial Average jumped 525 points, or 2%, and the Nasdaq Composite advanced 1.6%. The Nasdaq-100 — which is made up of the 100-largest nonfinancial companies in the composite — surged 1.7% to break above 11,000 for the first time. …

Pfizer and German biotech BioNTech SE were granted fast track designation by the FDA for two of the companies’ four vaccine candidates against the coronavirus. BioNTech jumped 15.2%.

Market brokers have become more bookies than real investors, but the amplitude of these gains today suggest that they’re not overly concerned at the moment. However, consumers have also been on board, and homebuilders just had their biggest June in a decade:

While the official government count isn’t out until the end of the month, sales of newly built homes jumped 55% annually in June, according to a monthly survey by John Burns Real Estate Consulting, which has historically mirrored the U.S. Census report. It was the largest annual gain since homebuilding began again following the epic housing crash a decade ago.

It is also the highest pace of sales growth since the height of the unprecedented housing boom in 2005. That expansion was driven by negligent lending in the subprime mortgage market. This boom appears to be driven by the coronavirus pandemic.

“The anecdotal evidence is overwhelming. Sales in the distant commuter areas are the most robust,” said John Burns, founder and CEO of JBRC. “I believe a lot of computer-oriented people have proven to their co-workers that they can be productive from home, and have sensed, or officially been given the green light, to work from home at least a significant portion of the time after a vaccine has been found.”

Forbes sees the economy starting a sustained recovery, not slipping back into recession. However, it’s worth noting that Jeffrey Schulze bases this in part on continuing and “tenacious” government support:

The proverbial unstoppable force is the tenacious determination of our policymakers, the U.S. Federal Reserve and Congress, to avoid the next Great Depression. The immovable object is the U.S. economy, extraordinarily fragile, facing headwinds of increasing coronavirus infections, an extremely weak labor market, rising surges of bankruptcies and hesitant consumers.

Financial markets are giving the unstoppable force the edge, so far, with policy support overwhelming economic weakness. These actions likely put in durable economic and equity market bottoms.

The National Bureau of Economic Research officially declared the current recession just four months after it began, the fastest on record. Now the swift, aggressive policy actions undertaken to combat the fallout from the vast economic shutdowns could make this recession the shortest in history (four to five months), eclipsing the six-month recession in early 1980.

Boosted by improvements in business confidence and financial conditions in June, we believe the U.S. economy is back in expansionary mode. This should confirm the recession’s brevity.

Schulze says the recovery might be sluggish, with labor markets struggling to recover quickly. That’s usually the case with recessions, though; job creation is a lagging indicator rather than a leading indicator. That is the reason that Congress and the White House threw so much money in the Paycheck Protection Program and similar efforts; it’s easier and less costly to preserve jobs than to re-create them later. Or so we hope, anyway.

At any rate, there aren’t any real metrics yet showing that the economy has dropped back into reverse. Is it possible? Of course, but we didn’t need these warnings to realize it.