Economist, Pooja Sriram, Barclays, on a Slight Rise in Consumer Spending Last Month – the Data Released on the Same Day as the u.s. Reported an Increase in the Number of Americans Filing for First-Time Unemployment.

November 25, 2020
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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,