By Jeffry Bartash, MarketWatch
More telling is the withdrawal of a few trillion dollars in federal support. The third-quarter surge was fueled largely by generous unemployment benefits, emergency business loans and $1,200 checks for most American families. Unlike in prior recessions, incomes actually rose in the spring and early summer.
“There is plenty of uncertainty surrounding the outlook [for the fourth quarter], but one thing is clear,” Gregory said. “GDP growth is going to be meaningfully slower.”
How slow? For clues Wall Street /zigman2/quotes/210598065/realtime DJIA -0.57% will pay close attention next week to the consumer confidence data in October and the weekly totals on how many people applied for unemployment benefits.
By a variety of measure confidence rose in to a pandemic high in the early fall, but another increase in coronavirus cases across the country could curb the optimism.
Weekly initial jobless benefit claims, meanwhile, fell to a pandemic low in October and dropped below the 800,000 mark for the first time since the pandemic began in March.
Yet new claims could back up again if the viral pandemic triggers fresh business restrictions or more companies announce layoffs in the absence of another round of federal aid.
In short, the forecast for the economy is cloudy — and the upcoming presidential election is further reducing the visibility.
The future path of the economy could be very different depending on who wins given the sharply contrasting plans of Democratic and Republican candidates in the Nov. 3 election.