The full scope of the pandemic’s toll on the U.S. economy was on display Thursday, when government officials reported that gross domestic product shrank the most on record in the second quarter and 17 million Americans claimed state unemployment benefits in mid-July. While the GDP drop — an astounding 32.9% when annualized — was widely anticipated at this point, the jobless claims figure was not. The almost 900,000 increase in the number of people claiming continued benefits provides the latest evidence that the nascent recovery from the collapse is being undermined by the resurgence of the virus across much of the U.S.

U.S. jobless claims rise for a second straight week

That’s particularly visible in rising continued claims from California, the most populous state, that may reflect renewed shutdowns and job losses. These figures indicate that even though third-quarter GDP could very well show a sharp initial rebound and give the appearance of a strong recovery, the gains could be short-lived.

“You’ve got this triple whammy coming through,” said James Knightley, chief international economist at ING Financial Markets. “One is the fear factor from Covid-19 on the rise and how that changes people’s behavior. Secondly, you’ve got unemployment rising because states are reversing course on their reopenings. And then, third, you’ve got the income squeeze” with expiring benefits.