Dear Clients and Friends,
On a bright note, new jobless claims came in better than expected, beating estimates by about 100,000 at around 1.3 million new claims. This continues the trend downward, but it’s still a big number. Even more positive, continued claims also fell, which shows that even with the roughly 1.5 million people filing new claims, more than that are returning to work, at least as of two weeks ago.
While this is good news, this spooked the market as we are expecting another stimulus package to come out in the coming weeks. If the economic data were truly terrible, then we could expect a bigger package. The better the economic picture, the more pushback there will be against further spending and stimulus plans.
I found this article to be interesting as it seems to show that the previous stimulus package is running out of steam, at least in terms of consumer spending. The chart also breaks down the partial impact on spending by wealth. The data in the coming weeks will be closely watched, and it may be that the better the data, the worse the market performs as it means less free money from the Government.
As always, please contact us if you would like to discuss your specific situation.