November 25, 2020
The real question we’ve been asking ourselves is, is this momentum sustainable?
- Americans continue to shop despite the pandemic. Consumer spending increased .5% in October.
- An increase in spending is important for the economy as two-thirds of economic growth in the U.S. is determined by consumer spending.
- The U.S. is the largest economy in the world so what happens stateside has ripple effects.
- This barometer on the consumer spending is the lowest since April and down from the previous months.
- The number of Americans filing for unemployment increased. Jobless claims increased again in the latest week from the previous week: 778,000. This number is a five week high.
- The increase is notable because this weekly data point had shown some improvement (lower number of Americans filing for unemployment).
- Some analysis: “Weekly unemployment insurance claims are moving in the wrong direction with the first back-to-back increases since July. Together with a slower-than-expected drop in continuing claims, we’re seeing the effects of rapidly-rising Covid-19 cases across the country. ” Robert Frick, corporate economist at Navy Federal Credit Union.
- Why This Matters: American spending power fuels the U.S. economy and by proxy – adds momentum to the world economy as well. With COVID cases on the rise, and restrictions once again impacting not only business owners but would-be consumers, the focus turns again to Congress and whether or not another stimulus plan with support (added unemployment benefits, loans) will pass before the Christmas holiday.
by Jenna Lee,