weekly jobless claims typically amounted to only
about 225,000. Layoffs are still historically high,
with many businesses unable to fully reopen
and some, especially restaurants and bars, facing
tightened restrictions.
Consumers increased their spending last
month by just 0.5%, the weakest rise since the
pandemic erupted. The tepid figure suggested
that on the eve of the crucial holiday shopping
season, Americans remain anxious with the
virus spreading and Congress failing to enact
any further aid for struggling individuals,
businesses, cities and states. At the same time,
the government said that income, which
provides the fuel for consumer spending, fell
0.7% in October.
The spike in virus cases is heightening pressure
on companies and individuals, with fear growing
that the economy could suffer a “double-dip”
recession as states and cities reimpose curbs on
businesses. The economy, as measured by the
gross domestic product, is expected to eke out
a modest gain this quarter before weakening —
and perhaps shrinking — early next year. Mark
Zandi, chief economist at Moody’s Analytics,
predicts annual GDP growth of around 2% in the
October-December quarter, with the possibility
of GDP turning negative in the first quarter
of 2021.
Economists at JPMorgan Chase have slashed
their forecast for the first quarter to a negative
1% annual GDP rate.
“This winter will be grim,” they wrote in a
research note.
Zandi warned that until Congress agrees on a
new stimulus plan to replace a now-expired