The number of initial claims for unemployment benefits last week was less than expected, and durable goods orders increased for seven months in November, showing that the economy is slowly recovering. However, personal consumption expenditures fell for the first time in April and personal income was worse than expected, reflecting the pressure on the economy caused by the resurgence of the New Guinea virus. The new wave of the epidemic and the new $900 billion bailout will affect the short- to medium-term outlook for the U.S. economy.
U.S. initial jobless claims fell unexpectedly last week, lower than economists expected, and significantly reduced compared with the previous week, reflecting employers are weighing the rising winter new crown epidemic and the $900 billion bailout package. The Labor Department announced on December 23, the week ended December 19, the number of first-time claims for unemployment benefits was 803,000, lower than economists’ estimates of 880,000, the previous week was revised to 892,000, the highest level since early September.
The U.S. Department of Commerce also announced that durable goods orders rose 0.9% in November, better than the market estimate of 0.6%, for the seventh consecutive month of increase, reflecting the U.S. manufacturing sector to get rid of supply chain disruptions related to the new crown pneumonia, continued recovery.
U.S. President Donald Trump is in a showdown with members of Congress; the U.S. Congress has passed a $900 billion bailout package on the 22nd, including a $600 check like most people and $300 a week in federal unemployment benefits; in addition, the size of the corporate bailout amounts to $320 billion.
However, Trump may not sign the bailout package, saying the bill contains “wasteful and unnecessary” plans, asking lawmakers to triple the amount of bailout intended for the American people.
The U.S. Department of Commerce announced on the 23rd that personal consumption expenditures fell in November for the first time in April, and personal income was also worse than expected, reflecting the increase in confirmed cases across the United States and dragging down economic growth. Consumer spending is the backbone of the U.S. economy.
Personal consumption expenditure in November decreased by 0.4%, in line with economists’ estimates, for the first time since April, and was revised to 0.3% in October.
U.S. personal income decreased by 1.1% in November compared with October, worse than the original estimate by economists of a 0.3% decrease, mainly dragged by the reduction in government social welfare benefits.
As for the kernel personal consumption expenditure (PCE) deflator in November, excluding food and energy prices, there was no change compared to the previous month, lower than the 0.2% climb in October, but also less than the expected 0.1% increase, from the Federal Reserve Board (Fed) set the 2% inflation target, still a big difference; kernel PCE deflator is the Fed’s preferred inflation pointer.
November kernel PCE annual growth rate of 1.4%, consistent with the previous month and in line with expectations.
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