Faltering confidence Consumer confidence fell in August to a new pandemic low after the increase in COVID-19 cases throughout the summer increased pessimism about an economic recovery. The index that reads consumers’ feelings about the economy right now fell from 95.9 in July to 84.2 in August. The index that reads consumers’ feelings about the economy six months from now fell from 88.9 in July to 85.2 in August – not nearly as steep of a fall but still a new pandemic low.  Moral of the story: Americans have somewhat figured out how to live in the midst of COVID-19 – people are returning to restaurants and movie theaters –…

The haves and have-nots  The government-mandated shutdowns throughout the spring and early summer had a very pronounced impact on retailers – those who were deemed essential and permitted to keep their doors open lived through a much different COVID-19 experience than those who were forced to close. This was abundantly clear as retailer earnings rolled through this week (idk how it’s still earnings season). Walmart sales increased 9.3% and ecommerce sales increased 97%. Target’s same-store sales (sales at stores that have been open for at least a year) increased 24.3% and ecommerce sales tripled. Home Depot’s same-store sales increased 25%. Sales for Ross, however, fell 32.5%. You get the picture.  Moral of the story:…

Coincidences  New weekly jobless claims fell below 1m last week for the first time in almost five months (let’s take a moment to recognize it takes less time to learn a coding language than it has taken for us to learn how to wear masks and listen to medical experts). Remember how jobless claims were somewhat plateauing for almost 9-10 weeks? This is the second week of large declines in jobless claims. It almost coincidentally lines up with when the $600/week federal unemployment benefits ran out.  Moral of the story: The decrease in claims is probably a combination of two things – the economy reopening and the expiration of federal unemployment benefits that likely…

Second wave impacts  We added 1.76 new jobs in July, which is about a third of the jobs that were gained in June. This checks out given rising COVID-19 cases toward the end of June caused much of the country to shut down again. Restaurants and retailers added the most jobs in July, but at a much slower pace than in June. These two sectors were the hardest hit due to government-mandated shutdowns and accounted for over 8m of the total job losses. As of July, only about half of those jobs have come back.   Moral of the story: In aggregate, we lost over 22m jobs during the peak…

A Truly **Gross** Domestic Product  Second quarter GDP literally plummeted into the depths of the deepest oceans. Down by an unprecedented 32.9% for the quarter, last quarter’s GDP marked a new record. To put this into perspective quarterly GDP never fell more than 10% in previous recessions. COVID-19 has resulted in y-axes in literally all economic charts to be recast, and it’s a real first-world problem. Consumer spending fell by 34.6% – it was most pronounced in services spending (travel, tourism, restaurants, bars, etc.) where consumption fell 43.5% while spending on goods only declined 11.3% as Americans bought more cars, groceries, and electronics to facilitate working from home. Federal spending was the only piece…