Up, down and sideways: a voter’s guide to U.S. economic data

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In the countdown to the Nov. 3 U.S. presidential election, the state of the economy is a key concern for many voters.

FILE PHOTO: People line up outside a Kentucky Career Center hoping to find assistance with their unemployment claim in Frankfort, Kentucky, U.S. June 18, 2020. REUTERS/Bryan Woolston/File Photo

Americans face a barrage of data, from this Friday’s monthly jobs report to what in all likelihood will be a blockbuster economic activity scorecard a mere five days before Election Day.

No one is debating that the United States has been struck by a recession of historic magnitude because of the coronavirus pandemic.

Rather, President Donald Trump says he is best placed to lever signs of a nascent recovery into a return to economic health. Democratic presidential nominee Joe Biden, meanwhile, argues a lack of leadership by Trump – on containing the virus in particular – has made the slump worse than it needed to be.

With two months to go before the election, and less time than that for those planning to mail in their ballots, here is a voter’s guide to some of the biggest economic data to watch for.

JOBS

The most highly anticipated read on the state of the labor market comes from the U.S. Bureau of Labor Statistics’ monthly jobs report here Just two more are scheduled before Nov. 3.

Next due: Sept. 4, Oct. 2.

What to look for: U.S. businesses probably created 1.4 million jobs last month, economists polled by Reuters say. Massive, yes, but in fact it would be the smallest monthly increase since the economic rebound began in May. And the economy would still be short about 11 million jobs compared with February.

“If we continue to see deceleration into the September report released on Oct. 2, the message that we are probably in for a long slow recovery might start to sink in,” said JP Morgan economist Jesse Edgerton.

What to skip: Average weekly wages, included in the jobs report, have risen dramatically. Usually a sign of a strong labor market, this time it simply reflects bigger job losses among low-wage than high-wage workers, skewing the average upward. As low-wage jobs return, expect wage growth to drop.

Bonus data: A tally www.dol.gov/ui/data.pdf released each Thursday shows the number of people receiving unemployment insurance, currently more than 29 million, with fewer than 1 million filing new claims on a seasonally-adjusted basis in the latest week for just the second time since March. Those numbers remain many times higher than pre-crisis norms.

GRAPHIC: Jobs fell off a cliff Jobs fell off a cliff – here

Reuters Graphic

SPENDING

Retail sales are back to where they were before the crisis, buoyed by the extra $600 in weekly unemployment insurance benefits paid from March to July. With that payment now down to $300, economists expect that spending fell in August.

Next due: Sept. 16, Oct. 16.

What to look for: Continued gains in retail sales, as reported by the Commerce Department, would suggest unexpected underlying strength among consumers, whose purchases account for about two-thirds of economic activity.

Bonus data: The Conference Board releases monthly reads on consumer sentiment, which dropped to a six-year low in August, a signal that spending could be set to weaken. The next reads are released on Sept. 29 and Oct. 27.

GRAPHIC: Retail sales rebound – here

Reuters Graphic

INFLATION

With so many millions of Americans out of work, there is little chance of a sustained surge in prices anytime soon. Indeed, the Federal Reserve is concerned inflation is too sluggish and is keeping borrowing costs low to help nudge it upward.

Next due: Sept. 11, Oct. 13.

What to look for: The Consumer Price Index, a widely followed measure of inflation, tracks prices for a broad basket of goods and services. “We are seeing these increases in inflation for goods that matter to the average household” like groceries and rent, said Gregory Daco, chief U.S. economist at Oxford Economics. If people feel they have less purchasing power, he said, that tends to hurt the incumbent party.

GRAPHIC: Inflation creep – here

Reuters Graphic

MANUFACTURING

Factory activity, accounting for just 11% of U.S. output but having a big impact on sentiment about the economy, has fared better than many sectors during the pandemic, in part because manufacturing sites have been able to adapt to social distancing guidelines and other measures to stop the spread of the virus.

Next due: Oct 1., Nov. 2.

What to watch for: A reading above 50 for the Institute for Supply Management’s manufacturing index means that factory output is increasing; a reading below 50 means that output is shrinking. The latest report showed output at a 21-month high in August.

Bonus data: Within the report is an index for new orders, which can signal the trajectory of future demand for goods.

GRAPHIC: Factories churning out more goods – here

Reuters Graphic

HOUSING

Even as many people struggle to pay rent, July data from the National Association of Realtors showed the median price of an existing home shot above $300,000 for the first time.

Next due: Sept. 22, Oct. 22.

What to look for: Further increases to home prices could deliver a boost to the financial stability and spending power of homeowners.

GRAPHIC: Amid health crisis, home prices rocket to record – here

Reuters Graphic

GROSS DOMESTIC PRODUCT (GDP)

While the U.S. economy shrank at an annual pace of 31.7% in the second quarter – its worst showing since the end of World War Two – it is expected to rebound in the third quarter.

Next due: Oct. 29.

What to watch for: It’s hard not to see this coming in as a whopper of a number. Republicans and Democrats undoubtedly will spin the data, with Trump likely pointing out, correctly, that it is the biggest quarterly gain ever for the world’s biggest economy, and Biden countering, also correctly, that U.S. economic output is still way down from last year.

CORONAVIRUS CASES

Arguably the single most important piece of data driving the economic outlook. The number of new daily coronavirus cases has moderated in the United States, but a resurgence in the fall could trigger fresh restrictions on economic activity.

Next due: Every day.

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