GDP and Unemployment Numbers Today

The initial jobless claims numbers are out, and they are not so bad

The number of Americans filing initial claims for unemployment insurance fell last week to the lowest level since the pandemic began, suggesting layoffs are easing despite a rise in coronavirus infections.

Initial jobless claims, a proxy for layoffs, fell by 40,000 to 751,000 in the week through Oct. 24, the Labor Department said Thursday. That was the lowest level of claims since mid-March, just before the pandemic shut down much business activity throughout the U.S.

But the other shoe dropped on the Covid front:

Daily virus infections reached new highs over the past week, and it is too early to tell how employers and consumers will respond.

Claims remain exceptionally high by historical standards. Last week’s new claims were more than three times the weekly average early this year, before the pandemic. Initial claims, which reflect the number of people laid off only recently and not those receiving assistance for more than a week, are just one measure of unemployment assistance. In total, more than 20 million Americans are still receiving unemployment benefits through regular state and emergency programs.

The GDP numbers for the 3rd quarter also came out today, and that initial report shows that the economy grew at 7.4% between July and September, which is impressive, but with the stimulus having ended, and Covid infections hitting new records, I am calling (as I always do) a dead cat bounce:

U.S. economic output increased at the fastest pace on record last quarter as businesses began to reopen and customers returned to stores. But the economy has climbed only partway out of its pandemic-induced hole, and progress is slowing.

Gross domestic product grew 7.4 percent in the third quarter, the Commerce Department said Thursday. The gain, the equivalent of 33.1 percent on an annualized basis, was by far the biggest since reliable statistics began after World War II.

The rebound was fueled in part by trillions of dollars in federal assistance to households and businesses. That aid has since dried up, even as the recovery remains far from complete: The economy in the third quarter was 3.5 percent smaller than at the end of 2019, before the pandemic. By comparison, G.D.P. shrank 4 percent over the entire year and a half of the Great Recession a decade ago.


Economists said the third-quarter figures revealed less about the strength of the recovery than about the severity of the collapse that preceded it. G.D.P. fell 1.3 percent in the first quarter and 9 percent in the second as the pandemic forced widespread business closures. A big rebound was inevitable once the economy began to reopen. The challenge is what comes next.

I do not think that the 4th quarter will come even close to the numbers, particularly with Covid exploding.

*It’s an old Wall Street saying, “Even a dead cat will bounce if it falls from a great height.”

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