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 convinced some people to stop collection and return to work. We’ll see how this changes as new rounds of relief get approved (maybe) in Washington.
Congress, where are you?
US retail sales increased 1.2% in July, compared to economists’ expectations of 2%+ growth. Sales indicate strength for electronics and appliance purchases as well as spending at bars and restaurants. Online shopping, which was booming in the peak of quarantine, has come down pretty significantly as physical stores have started reopening.
Moral of the story: Even though sales have returned to pre-COVID levels, the growth has tapered off and could be under pressure given Congress just left the house without coming to an agreement on the federal relief package. It’s literally their job to make sure their constituents are being cared for – not only could they not get past their partisan gridlock, it blows my mind they just up and left for vacation without reaching a resolution. The deceleration in spending indicates the economy still needs some form of fiscal support, so we’ll see what Washington can accomplish after their time in the sun.
In the off chance you’ve had the wonderful opportunity of being totally shut off from the world this week, Biden officially announced Kamala Harris as the VP on this ticket. Fun fact, “kamala” means lotus, and is an homage to her Indian descent. From a diversity perspective, I love the concept of Kamala Harris. I don’t totally love her stance on policy – if you’re not familiar, take a look. This Cali Senator is much more progressive than Biden, so she strategically makes sense on the ticket to harness the support of the far left that is becoming louder in the Democratic Party. For example, she introduced a proposal that would provide $2k monthly for individuals, $4k for those filing jointly, and $2k for up to 3 dependents – which would result in $10k/month for a family of 5. Guys. That’s $120k a year. What minimum wage worker would ever return to work if they were bringing in $120k a year for their household?! If that sounds like something Bernie Sanders would bring forward, you’ll be unsurprised to know he cosponsored the proposal.
Moral of the story: Obviously, the POTUS dictates White House policy, but it’ll be interesting to see how far left Biden is willing to go. If this duo makes it to the White House, I assume we’re going to see increases in corporate taxes, changes in immigration policies, and honestly probably an unraveling of many policies put in place by the Trump administration. At the end of the day, I hope Biden’s moderate views remain the north star.