We are sharing just a brief update on the economy and market here this week, and you will receive the quarterly newsletter that will arrive in your home via old fashioned U.S. Mail in the next few days. The quarterly newsletter has deeper analysis and bigger picture overview, while these weekly snapshots contain more timely economic updates.
Jobless claims up...and so are retail sales: The ‘K-shaped’ recovery continues, with the number of people who are filing initial claims for unemployment at a seven-week high. However, continuing claims for the 10.8 million people out of work have slowly trended lower. Sadly, in a recent survey, 47% of people said they would have a hard time managing a $250 unexpected expense right now. (Marketplace.org) Those people are on the bottom leg of the K-shape. Meanwhile, the people who have jobs are spending more in retail stores, particularly on their homes. Building material and garden equipment dealers were up 19.1% compared to year ago! (Seeking Alpha)
Producer Price Index increased more than expected:
Stimulus update: Senator McConnell indicated he will bring a stimulus bill to the Senate floor for $500 billion next week. Speaker Pelosi offered a $2.2 trillion bill, the White House is now saying “Go Big.” It is unclear whether a bill will be passed before the election, but likely there will be a stimulus package of some kind in the next month or two. The Federal Reserve continues to warn of a cold, dark winter even with some additional unemployment insurance spending and other household and small business support, and it continues to expect that another stimulus bill will pass in the next month or two.
Stimulus Around the World: you can see from Schwab’s Liz Ann Sonder’s chart below a picture of the stimulus spending across major regions of the world:
A raise, but it’s small: Government has announced that the increase in the Social Security benefit for 2021 will be 1.3%.
Corporations are paying down their (very high) loan balances:
A Double Whammy: UK supply chains struggled with the lockdowns and hoarding due to Covid-19. Now Brexit looms, and no one knows what the rules will be after the transition period ends on January 1, and regulatory requirements remain unclear. The British prime minister concludes a 2 day summit with the EU leaders today (Friday), and the EU is calling for further concessions from Britain. (Bloomberg)
Coming up in the Quarterly Newsletter: Year-to-date data, outlook, open enrollment, and....sourdough bread and a new baby. Watch for it in your mailbox!