Days before election, economic data reveals gradual improvement, gloomy
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[October 31, 2020] By
(Reuters) - With the presidential election
drawing near, a litany of data released this week shows the U.S. economy
continues to climb out of the recession caused by the coronavirus
pandemic, but progress is slowing.
Now, with infections on the rise, economists say many voters may be
weighed by a gloomy outlook when deciding whether to back the incumbent
president, Republican Donald Trump, or his challenger, Democrat Joe
"I would think the overall mood of the voter going in is not joyous
right now," said Kathy Bostjancic, chief U.S. financial economist for
The economic data released this week largely beat expectations and
showed incomes are rising, consumers are spending more and output is
increasing. It also revealed an economy still far from where it was
before the pandemic, with some consumers likely needing more help to
That divide was present in the pitches Trump and Biden made to voters
this week, with Trump vowing to deliver more growth in a second term and
Biden emphasizing the economy was still in a deep "hole."
Friday's report showed consumers' incomes are recovering slowly. It also
showed their spending is more concentrated on goods, such as cars,
clothing and shoes, while spending on services, including travel,
The pattern shows many consumers remain cautious about how they spend
because of budget constraints, fear of getting sick and activity
restrictions, said Bostjancic. Some who lost jobs are spending down
savings and dim prospects for more fiscal aid in the near future could
be impacting consumers' attitudes, she said.
The reports also show that after an historic third-quarter surge, the
economy is recovering more gradually now, said Jason Pride, chief
investment officer for private wealth at Glenmede. It could take time
for industries dependent on close human interaction to fully recover,
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A worker wearing a Trump 2020 campaign shirt sits among other
workers listening to U.S. President Donald Trump as the president
speaks at a Whirlpool Corporation washing machine factory in Clyde,
Ohio, U.S., August 6, 2020. REUTERS/Joshua Roberts
"We've been through the easy portion of the reopening," he said. "Now we're in
the slow grind upward."
Cooling temperatures heading into the winter could provide another hurdle for
restaurants and other businesses that have adapted by moving outdoors, Diane
Swonk, chief economist for Grant Thornton, wrote in a note on Friday. That slow
comeback for services could mean prolonged unemployment for the millions laid
off because of the crisis.
Getting the virus under control and helping people get back to work will be
among the largest challenges faced by the winner, analysts say..
While voters will weigh a range of issues in their decisions, some who are
unemployed may back who they hope will deliver more stimulus, said Pride. Those
doing well financially may not see such a need and could vote in the opposite
direction, he said.
If elected, Biden has pledged to lift the federal minimum wage, roll out more
stimulus and invest trillions of dollars in infrastructure and green energy
programs. But he will not get far without support in Congress.
Trump has signaled he is in favor of more federal stimulus, but has offered
fewer specifics on jobs.
(Reporting by Jonnelle Marte; Editing by Alistair Bell)
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