Americans Still Running on Fumes of Stimulus, Now Vanishing

Income sags from eerie stimulus-spike. But consumers hadn’t spent all their stimulus & unemployment money, instead paid down credit cards & padded bank accounts. Now they’re drawing on them.

By Wolf Richter for WOLF STREET.

This is how Americans “in aggregate ” – all mixed together, with all class and wealth inequalities mercifully blurred out of the picture – are navigating this twisted economy that has been powered by stimulus payments, extra unemployment payments, and support payments for companies so that they don’t lay off their people. Personal income from all sources – stimulus payments, unemployment payments, wages and salaries, Social Security payments, rental income, dividend income, etc., but not stock market gains – spiked to an eerie record in April and has been dropping ever since.

But those stimulus payments have been drying up as only a few million stragglers hadn’t received them by the end of July. While the extra $600 a week in unemployment benefits expired at the end of July, actual payments dragged into August. Some of these payments that dragged into August were lump-sum payments, covering many weeks, issued by overloaded unemployment offices working through their backlogged chaos, such as California. And the replacement $300-a-week started arriving mostly in September.

Personal income from all sources in August fell by 2.7% from July to a seasonally adjusted annual rate of $19.5 trillion, according to the Bureau of Economic Analysis today. This was still up 2% from February, but down 7.4% from the eerie stimulus spike in April:

Income from unemployment benefits.

The unemployment insurance component in personal income had exploded from $28 billion in February to $493 billion in April, to $1.36 trillion in May, and to $1.40 trillion in June (all annual rate figures). In July, income from unemployment ticked down to $1.32 trillion. But in August, after the extra $600 a week had expired, it plunged by over half, to $633 billion:

Personal income from wages and salaries alone.

This is what people earn from their jobs or self-employment activities. It ticked up 1.3% in August, from July, to $9.28 trillion (annual rate), but was still down 3.9% from February:

This 3.9% decline in wages since February by category (in annual rates):

  • Government employment: -2.2% (to $1.45 trillion)
  • Private sector, goods producing: -4.7% (to $1.49 trillion)
  • Private sector, services: -4.1% (to $6.34 trillion)

Personal income from major other sources.

Supplements to wages and salaries – contributions by employers to pension plans, health and other insurance plans, and government social insurance – fell by 2.2% from February to $2.2 trillion (annual rate), the infamously expensive employee benefits.

Interest and dividend income fell by 3.4% from February to $2.88 trillion (annual rate).

Proprietors’ income – nearly half of which is rental income of persons (individual landlords) – fell by 5.7% from February to $1.66 trillion (annual rate).

Government transfer payments excluding the above unemployment benefits – so from Social Security, Medicare, Medicaid, Veterans’ benefits, etc. – jumped 11% from February to $3.49 trillion.

Social Security ticked up 1.4% as some people who’d lost their work likely switched to retirement status. But there were big increases starting in May in Medicare and particularly Medicaid payments, possibly due to the surge in coronavirus cases, and the related treatment costs. These healthcare costs that are paid by the government to healthcare providers are counted in personal income because individuals are the beneficiaries.

Consumers still splurged on Goods, still scrimped on services.

The first thing to remember is that consumers didn’t instantly spend the stimulus money and the extra unemployment money the day they received it in April or May or whenever. Much of it went into paying down credit card balances to create room for later purchases. But the process of paying down credit cards has now ended:

Other amounts were deposited into checking accounts to be spent later. And this “later” includes August.

Total consumer spending in August, despite the decline in income, rose 1% from July to $14.37 trillion (annual rate), further slowing its recovery, and was still down by 3.4% from February:

Consumers plowed a record amount into durable goods over the summer, including laptops and other electronic equipment to work and learn from home, and on sprucing up the home with new appliances, furniture, and the like, and some retailers boomed, online sales exploded, while other retailers, such as department stores failed to hang on. Then in August the spike in spending on durable goods slowed (+0.9% from July), but was still up 12.0% from February, to another record of $1.74 trillion (annual rate):

Consumers backed off on nondurable goods, which had spiked to a record in March, under relentless panic-buying of certain items, then plunged, then recovered. The New Normal means that people work and study more from home, which shifts purchases, such as meals and infamously toilet paper, from office towers and schools to households. In August, spending on nondurables edged down by 0.1% from July, to $3.09 trillion, but was still up 2.3% from February.

Note that none of this is adjusted for inflation, and there have been some big price increases in a wide variety of these high-demand goods that consumers are chasing down.

But the biggie, services, is still way down. Services include rent, health care, insurance of all kinds, plane tickets, cruises, lodging, cellphone services, cable TV, broadband, electricity, sewer, haircuts, auto and home repairs, and the like. Normally, around 67% of total consumer spending goes into services.

In August, spending on services ticked up 1.4% from July but remains down 7.4% from February. Even during the Great Recession, spending on services held up fairly well. But this time it plunged, and despite the recovery so far, is only back where it had first been in April 2018:

The stimulus-fueled Pandemic-economy:

Stimulus payments and extra unemployment benefits drove spending among those Americans who spend essentially everything they take in and who carry credit card balances as a form of cash-flow management. And this a large part of the population.

But they didn’t spend all this money right away. They used some of it to create room on their credit cards, and they have some of it in their bank accounts, and so the power of the stimulus money will continue to add to consumer spending for a while longer, but in decreasing increments until it has vanished entirely.

Spending has shifted from businesses and educational institutions to households due to the shift to working and learning at home, thus deducting from business spending and adding to consumer spending, though consumers likely pay higher prices than businesses pay their suppliers.

And by spending record amounts on goods, particularly durable goods, many of which are imported, consumers are sending part of their stimulus and unemployment money to manufacturers in other countries. But the costs of imports are a negative for the economy and get deducted from the US GDP calculations. Ah yes, not a sign of strength, but of big economic distortions. Read…  Powered by Stimulus & Rent/Mortgage Payments “Not Made,” US Trade Deficit Hits Record Worst Terrible Level Ever

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  85 comments for “Americans Still Running on Fumes of Stimulus, Now Vanishing

  1. MonkeyBusiness says:

    Online Sales Boom still not over. Amazon usually holds their Prime Day in July, but this time around they are doing it this month, 2 weeks from now. They expect customers to be flush and this is Amazon we are talking about.
    Their analytics is top of the class.

    People are flush with cash and there’s no need for any extra benefits.

    • Wolf Richter says:

      “They expect customers to be flush…”

      Yup, what I’m saying. “Flush” meaning also that they have room on their credit cards that they didn’t have before the Pandemic. That’s all Amazon cares about since everyone pays by CC.

      • Anthony A. says:

        Yep, 146 orders from Amazon for us this year (so far). I think this has been our biggest year from them. Oh, that’s my account only. My wife has a separate one and I’ll bet she has over 50 orders this year so far.

        However, we are now doing more price shopping and find that Amazon is not always the best choice from a pure price perspective.

        • Zantetsu says:

          I’ve been extremely disappointed in Amazon though. For the first time ever I cancelled two orders and went over to Walmart.com to order. Amazon’s shipping is now 4 – 12 days for almost every item. Walmart.com is still managing two day delivery. I paid for Amazon Prime and I feel that they are not delivering the service they promised. Amazon is an incredibly rich company, they have the resources to do better, and by choosing to not do better, I think they are going to lose some business.

        • Wolf Richter says:

          Anthony A.,

          Try some of the other big retailers, from Best Buy for tech products to Walmart for whatever, plus the little guys for specialty products or US manufacturers for stuff they make, if they have a retail store. They’ve gotten very good in my experience. I now buy very little from Amazon.

          I’ve gotten burned by their third-party sellers. Will NEVER EVER buy a tech product from Amazon again — if you buy from a third-party vendor who isn’t an authorized dealer, the manufacturer may not honor the warranty, but the crook on Amazon doesn’t tell you that, nor will Amazon. You will find out when you need that warranty.

        • Bobber says:

          That’s a lot of extra packaging and fossil fuel burning.

        • Zantetsu says:

          Au contraire Bobby, it’s a more efficient way to shop. One person driving one vehicle to deliver 100 packages is much more efficient than 100 people driving separately to the store and back.

        • Anthony A. says:

          Wolf, most of those orders were for household products and things like dog food, etc. We did buy a new 44″ TV from Best Buy two months ago. I try not to buy any third party or Chinese crap products from Amazon. Some stuff we bought from Amazon recently:

          Propel water
          Bar soap
          Purina Dog food (50% less than WM)
          New socks
          Wife’s shampoo
          6 pack of toothpaste
          Cell phone covers
          etc

          The convenience factor is good for what we buy. WM is one mile from us and that’s where we get food and things not priced well at Amazon. Big items like the TV are bought locally to avoid the risk in shipping.

          Bottom line though, we have been placing a lot of Amazon orders, maybe due to Covid 19 lockup time.

        • Petunia says:

          Wolf,

          Third party sellers on Amazon are also a no no for me. Burned twice, once on a watch that didn’t work and turned out to be a fake, and recently on a CD which never arrived from CA. I got a refund for the watch but it was a big hassle. I didn’t even complain to Amazon about the CD because I thought the small shop probably closed due to covid and I didn’t want to make it worse for them. But I am never buying from one of their third parties again.

        • wizer says:

          I spent my stimulus on women and coke, the rest I wasted on Amazon packages.

        • MCH says:

          Amazon is there because of convenience. It’s the place you go to first, as been indicated by others, you can get better deals if you have time to look. But time is one commodity that is more important than money. So, one always has to ask, is it worth it to save a few extra bucks at the cost of however much time it is to search? Hence Amazon is a winner.

        • Lawefa says:

          Amazon has turned into a joke. Deliveries have always been late during pandemic, 3rd party quality control filtering is non-existent, they’ve allowed the Chinese garbage products to flood their website, their prices are not the lowest, and the positive reviews are rigged for fake 5 stars. Amazon is becoming a no-go for me at this point.

        • DeerInHeadlights says:

          @WR

          I find eBay to be much better for tech.

        • paul easton says:

          I used to pay a premium to bestbuy over walmart because of the tech support, but now they are charging for it.

        • Winston says:

          “We did buy a new 44″ TV from Best Buy two months ago. I try not to buy any third party or Chinese crap products from Amazon.”

          If you didn’t actually need that almost certainly made in China TV, the CCP thanks you for your continued support.

      • MonkeyBusiness says:

        Well as long as they money’s in their account and there’s no chargebacks, presumably everything is good from the point of view of Amazon. That’s probably another reason the Fed’s telling banks not to give out dividends/do share buybacks for another quarter i.e. so that Amazon will have a fantastic quarter?

        Otherwise the Fed could simply tell the banks to reduce their credit lines even further.

      • Silver Belle says:

        That’s why I will only accept Coronavirus Relief in Gold.

        Please contact your local Congress people and tell them that they will get to keep their jobs if they give we the people 1 oz of gold for Coronavirus Relief

    • Lawefa says:

      Running on fumes? The whole dang system is cavitating gasping for anything at this point.

  2. Harrold says:

    K shaped recovery for sure.

  3. The learning curve on this crisis has been pretty steep. The impasse on round two stimulus reveals that both sides see how well it worked; one side wants more, the other said, hey that was enough. I guess it is possible to run a main street economy from the basement of the ME building, while the Wall St economy takes a bit more negotiating. May give the MMT people more ammo, just pay everyone’s rent and grocery bills, and the rest is discretionary income. A round of corporate booyahs! I started the Free Gas for Everybody Party in 2003, I reserved all the money USG wanted to spend on the war in Iraq and gave everyone a free energy voucher. This Covid thing makes my plan peanuts, and the bear market in energy did a lot for consumers. The double bottom looms. Economy is going to explode out of this like an Elon Musk, Space X rocket.

  4. Seneca's cliff says:

    Here on Oct1 first I feel a distinct downshift. The roads seem emptier, the eating areas outside restaurants at lunchtime seem emptier. The big box parking lots seem emptier. The first of this month is the beginning of the end for pandemic stimulus and it sure feels like it.

    • Trinacria says:

      Oh don’t worry !!! The fed will pull more rabbits out of the hat as they seem to have more tricks than all the hookers of the world combined; so the disease of consuming continues. Logic would dictate that we are long past the day of reckoning, but best not to use logic in these times. Somehow, health restoring recessions to clean out the dead wood have become dirty words and so it goes…

    • Anthony A. says:

      Around here it’s like back to normal. Traffic everywhere, food places full and people shopping like mad.

      This is The Woodlands, Texas.

    • Island Teal says:

      Agree…during my travels yesterday there was far less crazy people rushing about. The AM is certainly quieter with fewer SUV and mini Van traffic. October is the big change month and now especially with the positive test results having a profound effect.

  5. Yort says:

    Note that if we do not get another stimulus bill in the next 23-48 hours, there is a chance there is no bill until December 13th, 2020 when the Govt funding bill signed today runs out. Honestly, I could see the next stimulus, if not passed soon, not happen until after inauguration January 20th, 2021. How that will be if it doesn’t take “Months” to determine a winner. We really need the stimulus in the next 48 hours, the top 1% needs it for Market gains, the bottom 50% need to to not starve, the middle 49% could use it to survive. The next 48 hours could be critical to how well people behave over the next 3 months of election volatility, etc…

    On the consumer spending side, I’ve never seen so many neighbors put in a pool this year in my development. I’m not sure if it is a “F” it moment of pandemic public avoidance, or if they are feeling wealthy. Odd since we have two olympic sized pools in our community, that half the time are completely empty. Pools cost about 1/5 the house costs where I live, so it is a big ticket item. One guy who almost lost his $450k house to the bank 2 years ago just put his pool in this year, so weird how people behave during uncertainty. Guess it is good for the economy, even if they really can’t afford it? I’m guessing it is the mortgage “cash out” refinancing that is driving the pool spending spree. The pool companies should send J-Pow a fruit basket…

    • Zantetsu says:

      Why do you say we need stimulus if it’s just money to be spent on swimming pools? We don’t need to mortgage our future for that.

      • Cem says:

        The vast majority of the population isn’t going to be spending stimulus on swimming pools. Bottom 90% I’d bet will use it to stay afloat.

        • MonkeyBusiness says:

          Nope, you keep ignoring that retail sales have been booming.

          Apparently staying afloat nowadays means brand new iPhones, consoles, etc.

          No more stimulus.

          And yes, people are skipping on rent to splurge.

      • Yort says:

        Zantetsu – I am a super-saver myself, yet I have come to the realization that even if every one of my neighbors get their house, autos, college tuition, food, rent, phone, etc “bailed out”, I myself win along with them as the alternative is complete and utter society chaos, anger, resentment, depression, etc and I will be in the middle of a very volatile and unhealthy environment, hiding that I have money to spare. It took me a while to let go of the emotions and only view it logically. Logically this printing press era could last a good while, with some sort of global jubilee reset at an unknown future point. Personally I just attempt to stay one step ahead of the process, and at the very least not get steam-rolled by the evolution of capitalism driven by the debtor govt system changes and voting patterns. I have a 1 year, 5 year, and 10 year plans. As long as I stay in front of the wave, why not just ride it instead of trying to fight through and end up with at the very least emotional trauma. Attempting to reason human behavior is my definition of insanity, so I just go with the flow and enjoy what life offers…

        • bungee says:

          you are correct of course. but remember, we need to trash the dollar in order to keep our society. if you are a super saver i hope it isnt in dollars.
          and the same goes for Zantetsu- we arent going to make the debtors pay in real terms. it would tear us apart. we will sacrifice our money instead. its a terrible store of value anyways.

      • David Hall says:

        They stopped going to restaurants, hotels, amusement parks, sporting events and casinos. They paid down debts. They stopped boarding airplanes and cruise ships. They spent money close to home.

        Some got sick and ran up huge medical bills.

    • The Original Colorado Kid says:

      “so weird how people behave during uncertainty”

      Extinction burst?

    • Seneca's cliff says:

      Pools are fun, and certainly expensive, but not the greatest investment. In the burbs west of Portland any pool that is less than brand new does not seem to add to the value of the home at all. I think that around here they are such big energy and maintenance sinks that the attraction is tempered by the costs and risks. You can generally tell how well-to-do a family is by the shape the pool is in. White plaster, smooth decks and blue water takes lots of work or a big fee to the pool man. Dingy Green water, moldy plaster and a bottom full of pine needles is a sign that things are tight in that household.

      • roddy6667 says:

        As a former Realtor and appraiser, I can say that pools don’t add to the value of a house. Half the buyers will refuse to buy it simply because there is a pool, and the other half will buy. On an appraisal, it is given a value of $1 because you have to put something in the blank spot.

    • Old School says:

      I worked in the pool business. It competes with the cruise and vacation business. People are basically redirecting vacation money to the backyard. It’s mostly borrowed money I think.

      • Frederick says:

        I just built two new homes on a property that I recently purchased along with a pool and pool house Paid cash for everything You can’t rent a nice house here without a pool The vacationing Brits require it to lay around drinking beer in order to cool off occasionally

  6. polistra says:

    If the graphs aren’t reflecting artifacts, it looks like job income has returned to 2019 levels after briefly blipping upward before the crash. 2019 isn’t terrible, and certainly isn’t a depression.

    • nick kelly says:

      ???
      People who are furloughed but are still being paid by the gov (e.g. airlines) still have the same job and job income as far as the stats are concerned. Of course things look normal. Trillions of dollars worth of goods and services evaporated but the Fed injected trillions back in. Net: no big change as far as some stats are concerned. But in reality everything has changed.

      We know two things: the Fed can’t keep handing out a trillion a month. Second: we are unlikely to have a good vaccine developed, tested and administered before the bailouts have to be greatly tapered.

      Thus the title of the piece: ‘running on fumes’

  7. Lance Manly says:

    Note core PCE is up 1.6 y/y. Jerome should be happy savers are getting punished, he only wishes he could punish them some more.

  8. Fat Chewer. says:

    Wolf, I was wondering if perhaps you could condense all the individual article comment sections into a common comments section. Or perhaps keep individual comment sections and add a common open topic comment section. I find it difficult to keep up with the daily stream. I have to re-read the entire comments section to find newly posted comments.

    It also seems that once a new article is posted, the last article’s comment section becomes redundant since attention has moved to the new comment section and posting a comment in the current article referring to an earlier article seems a bit off topic.

    I guess it would be noisy to combine so many comments into one section, so I would understand if you didn’t want to change it.

    Thanks for your consideration. And just because I probably don’t say it often enough, deep heartfelt thanks for everything you do. Wolf Street has saved my sanity on many occasions.

    • Zantetsu says:

      Since the comments section is mostly a place to vent (for myself included), it sometimes seems better that comments are obsolete almost as soon as they are written, and forgotten completely as the next article arrives.

      That being said, if the goal is to have real and long term discussions, then I agree with all of your points.

      • Fat Chewer. says:

        With all of my venting, I should have thought of that! You could be right.

        I actually was talking about longer term discussions, but the thought of Wolf Street becoming random like Quora is making me rethink that. It would also involve much curating and tending and moderating that would take Wolf’s precious beer time away.

        I often think of us Wolf Street aficionados as being a bit like characters from “The Ship of Lost Souls” that Homer Simpson is very briefly a member of. I would never want to change that!

    • bungee says:

      was just today thinking Wolf’s comment section could use an upgrade. i second your points and hope Wolf considers different layouts that might encourage deeper discussion and a way to more easily check new comments. a simple first to last might be all it needs?

  9. George W says:

    America is not running on fumes.

    All the pandemic has shown is that the working class does not matter. Stimulus or not and you would still have the same economic outcome in the US.

    25% unemployment mattered during the great depression as work was the primary source of income in the US.

    Economic realities have been turned upside down.

    Today the US economy is driven by the 60% – 70% of
    the population that does not work. Their incomes are not dependent on work and were not affected by the pandemic. Their spending continues unabated.

    The US economy is not running on fumes but on the expectation that debt does not matter.

    • Zantetsu says:

      I’ve often had thoughts along these lines. If the entire country can continue on like this indefinitely, then there are a lot of people whose work product was completely superfluous.

      What I wonder is, at what point do foreign entities no longer want to take U.S. dollars in payment for all of those foreign made goods now streaming into the USA? Does the dollar’s purchasing power just go into freefall? Does that end up making all assets within the USA that foreigners are allowed to buy (housing and higher education come to mind) super cheap for them, putting US citizens at a disadvantage when purchasing homes and educations within their OWN country?

      Or has that already happened?

      • California Bob says:

        re: “What I wonder is, at what point do foreign entities no longer want to take U.S. dollars in payment for all of those foreign made goods now streaming into the USA?”

        I don’t think they have much in the way of options; who else are such profligate consumers/spenders as US citizens? Newly affluent Chinese, perhaps, but who wants the yuan (maybe someday)?

        • MCH says:

          Right, affluent Chinese who bought up parts of Manhattan real estate to park their money in safe haven, only to see that it doesn’t take much to trash the place and turn it into a ghost town.

          Oh my, I guess it’s onto New Zealand and Australia. Those places are safe enough to park money from China. Something any moderately intelligent mainlander with money would do, ensure there is an escape plan… even true for the daughter of the found of Huawei.

    • Old School says:

      I think a reality as well is a lot of people will drop out and do austerity as for them it’s a better lifestyle choice. If you work in a competitive industry for a lot of people it’s just not worth it after 50 or 55 if you have the means to get out and slow down.

    • paul easton says:

      I don’t work and I can’t spend much and my credit is maxed out. I am glad to say I hardly contribute at all to the consumer economy.

  10. Paulo says:

    One point about stats being misleading, and this is NOT a criticism of the article or Wolf’s distillation of facts. When it says down 2.7% or 4% it is really quite misleading, imho. I’m sure most of us can accept a 2-3 even 10% decline in wages/income. It’s never fun, but it’s only a belt notch adjustment. But these are averages and what the numbers represent are a whole lot of people with suddenly nothing at all; little to no income, not enough food in the house, a car payment with no money to pay for it, and maybe no rent or mortgage cash. And then there are many people who aren’t missing a beat, at least for now. And as the article and comments point out, temporary measures paper over a real mess.

    If the Govt cannot get its act together and provide a real lifeline for the down and out, it won’t be pretty this fall and winter. Perhaps the dole should be done at a local level with foundation funding done by Federal borrowing/printing. Some area codes should get absolutely nothing, and other locales need more. Of course this would require trust and cooperation so I guess it’s just a pipe dream.

    regards

  11. MCH says:

    Appropriate, following up on the article of how the stimulus has increased the trade deficit, we now have an article on the need for more stimulus.

    Indeed, the rest of the world needs more US stimulus, to boost up their economy via exports. Life is just full of ironies, the PRC endorses the stimulus plan first and foremost, more the merrier, so Americans can buy more iPhones with the majority of the value going to the Americans can buy more iPhones with the majority of the value going to PRC, and by the way, don’t forget all the other consumer-electronics brought to you courtesy of the red and yellow. (AKA tomato with eggs… you will get that reference if you are Chinese, just not the ones born outside of China)

    • Wolf Richter says:

      MCH,

      “… we now have an article on the need for more stimulus.”

      Some people would look at the article the other way around: that the economy doesn’t need more stimulus.

      • sunny129 says:

        Who wants stimulus or NOT!?

        Top 10% owning almost 90% of Wall St wealth vs bottom 90% with less than 7%!

        No surprise here!

        • sunny129 says:

          More DEBT to cure the ills of DEBt since March of ’09!

          No one is worried about the deficit or the DEBT!

          Now Fed is thinking of ‘giving’ money (by pass Congress & the Banks) directly to consumers/citizens by creating Digital$ and deposit each American’s individual account at the Fed!

          All in the name of financial ‘stability and smooth functioning’ of the mkts!
          Their dream of inflation and some will come true!

      • MCH says:

        Sorry, “need for stimulus” was not quite the right wording, but I was in a bit of a rush.

        The economy I think needs stimulus, but properly directed, and properly thought out. I know, everyone should laugh at the last line since the US government does anything but. The haphazard approach is even worse than throwing darts against a board to decide how stimulus is directed.

        The current idea of stimulus from Congress and the Executive branch is just totally insane, better not to have that than more of the same garbage. More stimulus to households, while extending rental moratoriums and loan forbearance. It’s a recipe for disaster, and nobody calls out those retards from Washington on it.

        It’s sad, but realistically, who is in charge doesn’t matter come November. The boat will still be filling up with water, and our leaders will still be busy trying to beat down the opposition, either to hold down to power or to gain power. This crap is even worse than the House of Cards. If you gave me Frank Underwood, at least I’d know I’m getting a total jackass who is only out for himself.

        • paul easton says:

          The D Party want to send me money. The R Party don’t. Who should I vote for? Duh

        • Wolf Richter says:

          paul easton,

          You’re confusing me. The R party (controlling the Senate) and the R White House already DID send me money… just months before the election. So who should I vote for? duh

        • MCH says:

          The jackasses and dumbos both want to send money, just to different people.

          As for me, since I don’t get money from either…. I am not going to vote for either.

  12. Josap says:

    Today the airlines laid off a combined 50K people. Disney laid off 28K people. Other large firms laid off people due to the end of their loan/grant agreements. These were the “good” jobs.

    50% to 60% of businesses on Yelp have closed permanently.

    It doesn’t look like there will be another stimulus bill until after the election or possibly the first of Feb.

  13. MonkeyBusiness says:

    Tomorrow will show the unemployment rate going down again.

    • Wolf Richter says:

      It will turn negative. That’s my forecast 🤣

      • MonkeyBusiness says:

        Yep, because people will not be unemployed anymore. They will be on “stand by”.

        I too have a “stand by” ticket for after the Big Event on November. Just in case.

      • paul easton says:

        “The unemployment rate fell to 7.9 percent, in part because nearly 700,000 people left the labor force.” per NYT.

      • Lisa_Hooker says:

        Not until enough people have 2nd and 3rd jobs.

  14. Richard says:

    When US dollar gets created out of thin air, not only the middle class Americans gets robbed but also almost everyone in the world gets robbed. Before we suggest that the thousands of rich Americans can use a little more market gain, and millions of poor Americans can have iPads for Christmas. Why not take a little survey from the billions of outsiders getting screwed constantly for decades on how they feeling about another USD stimulus package that will shrink their wealth one step closer to none?

    • Dollars are not being created, the only way that would happen is if the government printed cash to pay their bills and they are not doing that. The dollar base is expanded through credit, when treasury bills are monetized for the purpose of government spending, and held off balance sheet in the Fed account. Otherwise they are free to issue all the bonds the market wants to buy. Providing stimulus does not absolve them of the need to fund the underlying borrowing through debt. Dollar policy runs on the twin deficits. The issue then isn’t how many dollars it is revenue to expenditures, GDP, and the nations credit rating. Running the world’s reserve currency the US gains strategic advantage, the ability to generate growth (and military superiority) through deficit spending, subsidized by foreign governments. The US assumes the role of policeman of the world, and in places like Europe, Japan,Taiwan, South Korea, that help is greatly appreciated. Current POTUS has questioned US debt, the cost of these alliances, but the policy does not turn around easily, and the US is generally considered a positive force in the world.

      • Richard says:

        “… that help is greatly appreciated” and “… US is generally considered a positive force in the world.” That sounds like the kind of fancy words the British would say about themselves during the age of imperialism, colonialism and slavery.

  15. YuShan says:

    Just imagine you are one of these poor suckers who worked hard their entire life, avoided debt and lived prudent and within your means and set enough money aside for retirement…

    Now it turns out that MMT folks can simply print money and hand it out to everybody without consequences! So that means you worked and saved all your life for nothing. Bummer! Why didn’t we think about this before?!

    • Lisa_Hooker says:

      Sucker here. By no means poor, but as you point out, a prudent sucker nonetheless.

  16. Old School says:

    I suspect the virus recession will just about take US to European state of being where it’s just impossible to get any decent GDP growth and we start having to deal with member states being insolvent. Also, less opportunities for young people and advantaged French type government workers with private sector mom and pops even in worse shape.

  17. Optimist_Tim says:

    Checking Statistics Canada for similar numbers, something else caught my attention.

    Using February 2020 as a baseline of 100%, in May salaried employment was down 8% but hourly employment was down 25%.

    The latest numbers in July show salaried employment down 5% while hourly employment is down 14%.

    So managers are protecting their jobs about three times better than they protect their employees. Surprise! :)

  18. DanS86 says:

    Geek Squad Complete $199:

    My friend used this to have two tvs mounted and wired thru wall. Because of some wall damage (hidden) the $49 was waived. Did a good job.

  19. Denise says:

    Chase reported today that Boomers, those born prior to 1964, only charged in August of 2020 just 59% of what they spent in August of 2019. Less travel, eating out and less medical. This is not a good sign as we move into the cooler months inside months. The number of people still alive born 1964 and earlier is around 92.13 Million. That is a lot of economy.

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