An increase in confirmed COVID cases reignited concerns and damped optimism in the US as troubling numbers from Texas, Florida, and Arizona (among others) were reported. Due to the increase of reported cases, rules on mask-wearing have been reintroduced while states such as Texas have begun rolling back their reopening plans. Consumer balance sheets took a hit in May with personal income declining 4.2% and Personal Spending bouncing up 8.2% in May. The change follows dramatic income gains and spending reductions from April, which were primarily due to government relief actions and the shutdown. The return in consumer spending is welcome, and the May report was the largest percentage gain in over 60 years. However, it is important to note that although the percentage gain was historic, overall spending remains nearly 12% below the pre-COVID levels reported in February. Consensus expectations for weekly unemployment claims pointed to more gradual improvement with an estimate of 1.32M. However, those expectations ground to a halt as 1.48M claims were reported on Thursday, a number close to the previous week’s 1.51M claims.
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