While the number of U.S. COVID-19 cases is on the rise, consumer spending in advance of the holiday season is boosting the economy, The Wall Street Journal reported. The U.S. economic recovery has continued as Americans keep on spending on consumer goods.
According to economists surveyed by the paper, consumer spending likely rose in October for the sixth straight month. That’s even while household income likely declined as the effect of pandemic stimulus programs faded and Congress failed to enact new government aid programs.
The Journal said consumer spending rebounded this summer, but the increase was less in the fall. It was, however, good enough to keep the pandemic recovery moving forward.
The economy went into a tailspin in the spring as the coronavirus took hold in the U.S., triggering various lockdowns and business shutdowns across the nation. Layoffs took off as the economy shrank.
Consumer spending, in fact, amounts to more than two-thirds of economic activity in the U.S. The WSJ said that, in fact, job growth in October was strong, as the economy continued its recovery.
The economic signals are mixed, however, Although the Dow has crossed the 30,000 mark, the stock market boom has become more detached from what’s going on in the economy.
The Conference Board on Tuesday (Nov. 24) issued its new Consumer Confidence Survey report, which gave a gloomier picture. The Consumer Confidence Index fell in November after holding steady in October, the nonprofit think tank reported.
On the other hand, the results may have been dragged down by pessimism in early November over the outlook for finally getting COVID-19 under control. The cutoff date for the preliminary results for The Conference Board’s Consumer Confidence Survey was Nov. 13.
Since then, more news has come out about vaccine breakthroughs, leading to a more optimistic outlook for Americans, if only preliminary.
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