Millions of Americans are still jobless and those who work often stay home with half their salary. The coronavirus pandemic is still not under control and the virus keeps spreading all over the United States. And even though consumer sentiment doesn’t approach pre-pandemic levels, July sales grew third time in a row. This sounds like great news for the world’s strongest economy, yet everything will depend on how long shopping appetite of Americans persists.
Households can still rely on the unemployment benefit of $600 per month, but the amount is likely to be reduced by half as president Donald Trump recently decided in his executive order. While receiving half of the amount is still better than receiving nothing, it’s difficult to imagine that the reduction would not be reflected on household consumption expenditures. If benefits will be reduced, the impact would be reflected in third or fourth quarter in worse numbers that gross domestic product.