Unemployment remains high: US citizens are losing interest in shopping

Unemployment remains high
US citizens lose interest in shopping

The Christmas business is likely to be a little more modest for many retailers in the USA this year. The consumer mood is worse than it has been since the summer. As early as November, they cut their spending to a surprisingly large extent.

In view of the new corona wave, US citizens have lost their interest in shopping. Their consumer spending was 0.4 percent lower in November than in the previous month, according to the US Department of Commerce. That was the first drop since April. Economists had expected a minus, but had only assumed 0.2 percent. In October there was an increase of 0.3 percent.

With their spending, consumers form the backbone of the US economy, which reported record growth in the summer: gross domestic product rose by 33.4 percent over the year, with consumers in particular providing a strong boost. For the fourth quarter, experts expect an increase of less than five percent.

Over 800,000 new unemployed people each week

The main reason for consumer reluctance is likely to be the persistently high level of unemployment. In the past week, 803,000 Americans re-applied for unemployment benefits. That was 89,000 fewer than in the previous week, but the numbers remain at a high level. Millions of jobs have been lost in the Corona crisis and have not yet been regained. For comparison: before the crisis, the weekly applications were mostly around 200,000.

The ongoing uncertainty is dampening consumer confidence, and at the end of the year the mood deteriorated more sharply than it has been since August. The barometer for consumer mood fell surprisingly in December to 88.6 points from 92.9 points in November, as the Institute Conference Board determined. The barometer tends to be well below its level before the outbreak of the corona pandemic: In February it was at a good 132 points.

With the increase in the number of infections, several states had recently tightened restrictions on the fight against the corona virus – such as the ban on eating in restaurants. According to the latest figures, a total of around 20.4 million people in the USA received some form of unemployment benefit. A year earlier it was only around 1.7 million.

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