Get the latest market trends in your inbox

Stay on top of the latest market trends and economic insights with the Axios Markets newsletter. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Minneapolis-St. Paul

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa-St. Petersburg news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa-St. Petersburg

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Aïda Amer/Axios

If the impasse between House Speaker Nancy Pelosi and the White House on a new stimulus deal is supposed to be a crisis, you wouldn't know it from the stock market, where prices continue to rise.

  • That's been in no small part because U.S. economic data has held up remarkably well in recent months thanks to the $2 trillion CARES Act and Americans' unusual ability to save during the crisis.

By the numbers: The median jobless worker received unemployment benefits "equal to 145% of their pre-job loss wages, compared to 50% in normal times" thanks to the CARES Act's $600-per-week unemployment supplement, a report from the JPMorgan Chase & Co. Institute found.

  • Additionally, the creation of special pandemic unemployment programs allowed millions more out-of-work Americans to access jobless benefits, which amounted to 7% of total personal income in June — a record far exceeding the 1.3% peak during the Great Recession.
  • Unemployed Americans "roughly doubled their liquid savings over the four month period between March and July 2020." The report notes, however, that they "then spent two-thirds of the accumulated savings in August alone."

The results: The percentage of people who said their ability to afford household goods had improved was the highest since early June in the latest Axios/Ipsos nationwide poll, tied for the best since the survey began in March.

  • National Multifamily Housing Council data show that 94.6% of Americans paid their rent by month-end in September, nearly matching the 95.5% who did so in September 2019.
  • U.S. retail spending rose for the fifth straight month to its highest level on record in September.
  • And the average U.S. credit score improved during the pandemic, reaching the highest in July since FICO began keeping track in 2005. Early estimates suggest scores held steady through mid-October.

The big picture: "The CARES Act worked. It delivered a massive amount of financial support and put a huge financial safety net under families very quickly," David Wilcox, senior fellow at the Peterson Institute for International Economics, tells Axios.

  • "And then Americans were smart — they did rational things that an economist would’ve told them to, which is to hedge against the possibility that that $600 benefit might not be a permanent thing."

Yes, but: Not all the data have been so rosy. A study of the pandemic's impact on food insecurity found that in April 22.8% of U.S. households were food insecure, and 34.5% of households with children.

  • For households with children, that's more than triple the rate economists had projected before the pandemic began.
  • A separate study found overall household food insecurity at similar levels in July.

What's next: The economy has held up much better than experts had predicted, but the numbers are starting to show strain. Job gains have slowed considerably since May, manufacturing and production are contracting and 26.5 million people are receiving unemployment, with 14 million at risk of losing benefits when pandemic programs expire at year end.

  • "Eventually, without further government support or significant labor market improvements, jobless workers may exhaust their accumulated savings buffer, leaving them with a choice to further cut spending or fall behind on debt or rent payments," analysts at JPMorgan said in their report.

The bottom line: At worst, passing a stimulus bill would be a form of insurance on the recovery, Mike Fratantoni, chief economist of the Mortgage Bankers Association, tells Axios.

  • "If you listen to the public health experts there is a real risk that we see a second or third wave and the course of the pandemic could get worse from here."
  • "If you’re a policymaker, having that insurance or risk management mindset makes a lot of sense right now."

Go deeper

Dion Rabouin, author of Markets
Dec 1, 2020 - Economy & Business

Everyone's bullish

Illustration: Sarah Grillo/Axios

Following positive vaccine news and the run-up in global equities punctuated last week by the Dow hitting 30,000 points, investors are again throwing caution to the wind and growing more uniform in their bets that stocks will continue to rise.

Between the lines: The resurgence of traders' risk appetite has some urging caution, as unanimity in either excitement or fear historically has proven to be a contrarian signal for the stock market.

4 mins ago - World

Israeli parliament opts for early elections in preliminary vote

Netanyahu (C) arrives in parliament today. Photo: Alex Kolomiensky/Pool/AFP via Getty

After six months of a dysfunctional power-sharing government, Israel is headed for its fourth elections in less than two years, most likely at the end of March.

Driving the news: The Knesset voted 61-54 today to approve the preliminary reading of a bill to dissolve the parliament and call new elections. Benny Gantz's Blue and White party supported the bill while Prime Minister Benjamin Netanyahu's Likud and the rest of the coalition voted against.

1 hour ago - Sports

The end of COVID’s grip on sports may be in sight

Illustration: Aïda Amer/Axios

Packed stadiums and a more normal fan experience could return by late 2021, NIAID director Anthony Fauci said yesterday.

Why it matters: If Fauci's prediction comes true, it could save countless programs from going extinct next year.