As the US layoff wave fades, spending ramps up, Biden gets some respite.
New data released Wednesday indicated that Americans are spending their way into the holiday season, while jobless claims have fallen to historic lows, providing some relief for President Joe Biden as he navigates the recovery from the Covid-19 outbreak amid skyrocketing inflation.
A slew of surveys create a picture of a society where employers are increasingly clinging to their employees and workers are directing their salaries to enterprises all over the world, all while coping with the uncertainties posed by rapid price hikes.
New jobless benefit filings fell below their pre-pandemic levels last week, hitting a low not seen since 1969, according to the government.
Meanwhile, last month’s expenditure and incomes both exceeded expectations, though prices surged 5% from October 2020, the largest increase since November 1990.
In a statement, Biden praised the employment figures, calling them “historic” and noting that “more Americans are getting back to work, and more Americans have money in their pockets.”
According to Gregory Daco of Oxford Economics, expenditure and incomes have also risen above pre-pandemic levels, thanks in part to enormous spending initiatives passed in Washington.
“As we look ahead to Thanksgiving,” he wrote in a note, “there is much to be thankful for in this fiscally-stimulated recovery.”
“However, the recovery process is far from complete, with service spending substantially below pre-pandemic levels, and the transfer from public to private-driven growth will be difficult.”
Since the beginning of what would become the world’s largest Covid-19 outbreak in March 2020, when more than 20 million people lost their jobs, the US economy has come a long way.
Weekly unemployment benefit filings soared into the millions before leveling out for the majority of the year. With the availability of Covid-19 vaccinations in 2021, they were able to return to levels reached prior to the epidemic.
The newest Labor Department statistics puts the well monitored index of employment market health back below where it was before the layoffs began on March 14, 2020.
Analysts, however, were skeptical. Claims fell by 71,000 from the previous week, reaching a level not seen in generations, according to Pantheon Macroeconomics’ Ian Shepherdson, who ascribed the drop to a “seasonal adjustment oddity” that “will dramatically reverse next week.” In a study, he said, “That said, the trend in claims is obviously dropping.”
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