During the first coronavirus wave in the spring, approximately 22 million Americans had no work. While a couple of months after that saw somewhat of an economic rehabilitation (thanks to record low interest rates and stimulus money) with the second wave things are plummeting further than the initial pandemic attack. According to High Frequency Economics Chief US Economist Rubeela Faroqi said:
“The layoffs are an additional headwind in an already weak labor market. As long as the virus isn’t contained, this is going to be an ongoing phenomenon.”
Businesses are being forced to reduce costs as demand for services in many industries is weakening. Consumer spending on goods on the other hand is increasing. People are eating and drinking more (short-term) and appliances (longer-term). Personal spending has increased (by about a percentage) and consumer confidence readings has expanded a little too. Between June and August there was a 2.1 percent jump in residential construction employment.
Still, there are way too many Americans still filing for unemployment. According to the Jobs Report put out by the US Labor Department, what was witnessed in September in labor market gain, is now beginning to dwindle with only an additional 661,000 jobs added in the month. August for example, saw an additional 1.5 million jobs.
Personal income fell in August and the growth in consumer spending was slower than it had been.
So it seems like the messages we are receiving are not straightforward at all and coming to any conclusion regarding the economic recovery is hard to measure.