New jobless data released Wednesday morning underscored the still-grim state of the job market as the nation awaits President Donald Trump’s signature–or lack thereof–on a $900 billion stimulus package that would, among other things, extend unemployment benefits set to expire in mere days through the end of March.
Shortly after the open, the Dow Jones Industrial Average was up 60 points, or 0.2%, while the S&P 500 also edged up 0.2%, and the tech-heavy Nasdaq was virtually flat.
Another 803,000 filed first-time unemployment claims last week–down 89,000 from the previous week and about 10% less than economists were expecting but still well above pre-pandemic levels.
Additionally, 397,511 more people applied for benefits under the Pandemic Unemployment Assistance program for gig workers and self-employed individuals, which the new stimulus package plans to extend to March 14 from December 26.
Personal income fell a greater-than-expected 1.1% in November, on a month-to-month basis, after falling 0.6% in October; personal spending also clocked in worse than expected, falling 0.4% after months of increases, according to Bureau of Economic Analysis data released Wednesday morning.
Global markets were similarly tepid Wednesday morning, with Japan’s Nikkei 225 ending the day up 0.3%, while the United Kingdom’s FTSE 100 is virtually flat, and Germany’s DAX index ticks up 0.8%.
New weekly jobless claims began creeping back up in late November after months of remaining below 800,000 as the winter surge in Covid-19 cases forced additional business closures. Federal Reserve Chairman Jerome Powell warned during a press briefing last week that despite the hopeful prospects offered by the coronavirus vaccine, “the next few months are likely to be very challenging.”
“It’s called the Covid relief bill, but it has almost nothing to do with Covid,” President Trump said in a video posted to Twitter Tuesday evening in which he called the stimulus package a “disgrace.” He’s also doubled-down on a threat to veto a separate government spending bill. “I’m asking Congress to amend this bill and increase the ridiculously low $600 to $2,000 or $4,000 for a couple.” The government will shut down if a spending bill is not signed into law by December 28.
“If investors would like to dive down Trump’s latest–and one of his last–rabbit holes (his criticism, and implicit veto threat, of the stimulus bill) to help pass the time on an otherwise boring morning, they’re more than welcome, but it won’t alter the macro narrative,” says Adam Crisafulli, the founder of Vital Knowledge Media, adding that he believes Trump successfully pulling off a spending veto is unlikely. “The rally’s three core tenets–stimulus, vaccines and [corporate] earnings–remain in place.”
What To Watch For
Markets are closed Friday for Christmas and trading is set to end early on Thursday at 1 p.m. EST.
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