Consumer spending is losing momentum and jobless claims are ticking up once again, suggesting that the United States path to economic recovery remains uneven as it approaches the holidays amid a resurgence in the COVID-19 outbreak.
Today, the Department of Labor reported that seasonally adjusted initial claims for the week ended Nov. 21 totaled 778,000 — an increase of 30,000 from the previous week’s upwardly revised level and topping economists’ predictions for 733,000 new applications. Still, it marked the 13th consecutive week that filings were below the one-million mark and the sixth straight week that they were below 800,000.
The report came a day after The Conference Board posted a drop in its Consumer Confidence Index for the month of November after remaining relatively flat last month. According to the nonprofit research group, the indexes indicating consumers’ assessment of current business and labor market conditions as well as their short-term outlook for the economy logged declines.
“Heading into 2021, consumers do not foresee the economy, nor the labor market, gaining strength,” senior director of economic indicators Lynn Franco added. “In addition, the resurgence of COVID-19 is further increasing uncertainty and exacerbating concerns about the outlook.”
Over the past several weeks, a surge in cases has threatened certain parts of the U.S., leading some cities to impose new restrictions that have affected businesses such as restaurants, gyms and retail stores. Since March, more than 12.59 million people in the U.S. have been sickened by COVID-19, while at least 259,900 have died.
However, Wall Street has recently shown signs of optimism: Yesterday, the Dow Jones Industrial Average closed at an all-time high of 30,000 points, driven by promising COVID-19 vaccine news and reports that President-elect Joe Biden’s transition into the White House is underway. Just this week, United Kingdom-based AstraZeneca PLC and the University of Oxford joined the race of highly praised vaccine candidates that showed at least 90% efficacy in preventing the novel coronavirus without serious side effects. Plus, a federal agency yesterday ascertained Biden as the winner of the presidential election more than two weeks after he was widely declared the new U.S. president.