Weekly economic review & outlook
Growth to be boosted by new stimulus
JAN. 04, 2021
You Need to Know
Week in review
Pending home sales slip again, suggesting a further moderation in existing home sales
Pending home sales edged lower, suggesting that December existing home sales will slip a tad – but remain solid.
Additional pandemic stimulus funds will boost growth for 2021
The new pandemic stimulus bill should boost real GDP growth in 2021 by nearly half a percentage point to a strong 5.0 percent.
Another slowdown for the job market
Nonfarm payroll growth should slow further for December, as the overall economy slows with a pickup in new coronavirus infections, but with the unemployment rate down a tick.
ISM surveys should move in opposite directions but still show growth
The manufacturing survey from the ISM should move a bit higher for December with the services survey down a tad, but with both over 50.
The pandemic stimulus bill signed into law by President Trump last week serves two primary positive purposes (albeit at the cost of an even larger federal budget deficit). First, it creates a bridge to a period of stronger economic growth and an ebbing of the coronavirus later in 2021 for the large number of people still unemployed as a result of the COVID recession and smaller businesses at risk of shutting their doors in the near term. And second, it will boost economic activity for the year, especially early in the year when it is needed most as the stimulus payments are front-loaded.