Pent-up demand from households that have been cooped up over the last eight months could drive a spending boom in the spring, providing a big boost to the economy.
U.S. employers added 638,000 jobs last month as the unemployment rate dipped to 6.9%. A winter spike in coronavirus infections threatens to further weaken job growth.
The U.S. is expected to report record-setting economic growth in the most recent quarter. But that won't repair all of the damage done during the spectacular downturn three months earlier.
The Federal Reserve left interest rates near zero Wednesday and pledged it was ready to use all of its available tools to support an economic recovery that appears to be weakening.
Consumer spending rose 1.9% last month — but the rebound slowed from May and June. Unemployment benefits continued to prop up spending in July, but that may change in August.
As Congress debates whether to renew supplemental unemployment benefits for people thrown out of work by the pandemic, new research shows those benefits offer a critical boost for the U.S. economy.
Applications for jobless benefits are up again. "What we're seeing now is that lots more people who are unemployed are going to be unemployed for a longer period of time," economist Nick Bunker says.
The committee tasked with marking U.S. business cycles says the economy peaked in February and has since been in a recession triggered by the pandemic. But it says the recession could be short-lived.
The president said it would be "rocket fuel for our economy," but the Republican tax cut passed in 2017 did not pay for itself as promised — nor did it deliver a sustained boost to growth.
The Federal Reserve is widely expected to cut interest rates by a quarter percentage point. That could give a lift to the stock market but may not do much to help the economy amid the trade war.
