Real GDP rose by an annualized 4.0 percent in the fourth quarter, in line with expectations, as capex and residential investment both remained in outsized recoveries. Consumption was higher by 2.5 percent, although this likely overstates the trend into the end of the year given the sharp declines in control retail sales in November and December. In fact, the GDP figures more broadly have never been less relevant than they have been in this cycle, as they are lagging an economy that is shifting rapidly and is increasingly better represented by a growing set of higher-frequency indicators. That said, GDP still provides the most comprehensive view of the economic activity at large and still reflects the bigger-picture narrative. And on that score, at least, this remains a fairly normal recovery despite the unique underlying dynamics. Real GDP has now retraced more than three-quarters of its decline during last year’s recession, not far removed from the long-term median for the first two quarters of an expansion and quite a bit stronger than the turnaround coming out of the last downturn. It is also a good bet that the comparisons will turn even more favorable as the pandemic recedes in the quarters ahead and this young expansion again gathers steam.
Jobless claims fall
Initial unemployment claims fell for a second straight week, moving lower by 67,000 to 847,000. There is still a great deal of sclerosis in the labor market -note the spike in PEUC benefits in this morning’s report, for example- but the headline here is a tentative sign that the worst of the recent COVID wave’s impact on employment may be passing. In what has been a very eventful week, the most consequential news for the near-term outlook has been the continued decline in the new case count and the attendant re-openings in several state and local economies.
What did Thomas Jefferson want explicitly restricted in the Bill of Rights, calling them “the sacrifices of the many to the few”?
What company briefly became the largest in the world by market cap in 2008 when it soared by more than 350 percent in less than two days due to a buying spree by its largest shareholder and a subsequent short squeeze?
Originally published by Nationwide, 1/29/21