GDP and Initial Claims

We had two more economic reports this morning. First, the government said that fourth-quarter GDP grew in real terms by 4%. The estimate was for 4.3%.

For the year, the US economy shrank by 3.5%. That made it the worst year for economic growth in 74 years.

The initial claims report was for 847,000. That’s down from last week’s total of 914,000.

Still, the latest claims report showed that the total of Americans receiving unemployment benefits actually rose, jumping to 18.28 million, an increase of 2.29 million from the prior week. That increase is related to the latest fiscal package passed in December, which included extended benefits for displaced workers.

The bounce in consumer spending that had revived job and economic growth through the summer and fall has shown signs of fatigue, as household spending declined for the first time in seven months in November.

That slowdown, thought to be a function of colder weather and record-setting Covid cases, has led to a string of higher-than-expected jobless claims and stagnant unemployment figures.

Posted by on January 28th, 2021 at 11:04 am


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