With the holiday season in full swing, the number of people traveling and gathering with their family and friends is at an all-time high during the pandemic. As we are in the midst of a second wave, this spike in travel has worried economists around the country. They are concerned that Thanksgiving weekend will add another surge in the virus and will hamper the current recovery. Even more concerning, Christmas is around the corner which is likely to result in even more traveling and gathering, providing a further surge in the spread of the virus.
Experts have indicated that the economic data is troublesome. There are some indicators that are signaling a pending recovery while others are flashing red. One of the most alarming signs is the fact that weekly jobless claims jumped to a number that was higher than expected, 778,000, marking the second weekly increase in a row. “What we’re looking for at the moment is signs of cracks in what has been reasonably good economic growth,” said Gary Schlossberg, global strategist at the Wells Fargo Investment Institute. Another indicator is workers who have used the majority of their unemployment benefits. They have been rotating out of state programs and into emergency pandemic programs. This shows that more of the job losses caused by COVID-19 are becoming permanent.
If the United States decided to implement country-wide lockdowns once again, this could have devasting effects for both workers and the economy. As the pandemic grows worse, unemployment compensation programs are set to end the day after Christmas. According to David Wagner, “A lot of this data is really starting to slow down and become worrisome. There’s a lot of data that just came out today and yesterday that’s maybe showing more signs of slowing growth going into Q4, and maybe even Q1 right now.” Despite the red flags that economists are seeing, there is a potential silver lining.
One positive that could come out of the worsening conditions is the possibility that Congress will move faster to pass a stimulus package. If new jobless claims start to increase and the pandemic appears as though it is picking up again, it could drive more members of Congress to come to an agreement for a stimulus package. The introduction of a new stimulus package would help drive consumer confidence and spending and would help the country round the corner on the pandemic.