Popular Economics Weekly
The US economy must first survive this pandemic before it will benefit most Americans. Some sectors are doing better but ignore the financial market swings, which benefit 401(k)s, but not most Americans.
Advance estimates of U.S. retail and food services sales for September 2020, adjusted for seasonal variation and holiday and trading-day differences, show an increase of 1.9 percent from the previous month, and 5.4 percent above September 2019 as an example.
This is a huge bump in spending as consumers left their confined spaces in July, which is mainly why GDP growth rose 33 percent in Q3 from its second quarter pandemic low, since consumers account for most GDP activity.
But it was mostly in so-called durable goods—autos, planes, appliances that last more than three years. The majority of services businesses, such as restaurants, lodgings and travel, will be suffering through much of next year until most Americans are vaccinated and feel it’s safe enough to re-engage with the larger world. Appliance sales are booming, for instance, because most of us remain at home during the pandemic out of caution.
The real question will be how much more will Americans suffer this winter due to the pandemic.
As a prelude to Friday’s official unemployment report, payroll data processor ADP reports a smaller increase of 365,000 new nonfarm payroll jobs in October, mostly in the service industries and down from 753,000 the prior month.
Last month’s US payrolls reported by the Labor Department increased by 661,000 nonfarm payroll jobs last month with an unemployment rate of 7.9 percent, so job creation may be declining in the government’s official report this Friday.
“The labor market continues to add jobs, yet at a slower pace,” said Ahu Yildirmaz, vice president and cohead of ADP Research Institute. “Although the pace is slower, we’ve seen employment gains across all industries and sizes.”
But that still begs the question of what will happen with coronavirus infections now reaching 100,000 per day and the infection rate rising to 9.3 percent, which means a faster community spread.
According to the Washington Post, Deborah Birx, one of the White House's most senior coronavirus advisers, issued her warning in an internal memo on November 2, saying that "We are entering the most concerning and most deadly phase of this pandemic ... leading to increasing mortality." And the White House, she wrote, is not doing enough: "This is not about lockdowns -- it hasn't been about lockdowns since March or April. It's about an aggressive balanced approach that is not being implemented."
The U.S. counted 92,660 new cases on Tuesday, according to a New York Times tracker, and at least 1,130 fatalities. In the past week, the U.S. has averaged 88,168 cases a day, up 46% from the average two weeks ago.
Does anyone believe things can get any better before this pandemic is controlled?
Harlan Green © 2020
Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen
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