Congress passed a Phase 4 relief bill this week with $900B in relief to counteract the economic damage from COVID. The bill includes a $600 direct assistance payment, extended unemployment insurance, and payroll protection programs, among a host of other programs as well. Later in the week Trump unexpectedly threatened to veto the bill, saying the direct assistance payments were too small and should be $2,000. Efforts in the House to adjust the package have so far failed as of Thursday morning, leaving the aid package in question.
Late in the week the EU and UK announced they had reached a trade deal in the 11th hour, after the status of the negotiations looked bleak with the potential for major disruptions in the new year. At a high level, the deal removes the risk of major trade disruptions and secures tariff-free trade and ends the free flow of workers as well as London’s financial firms’ guaranteed access to European markets.
In a shortened, relatively quiet economic data week, the Q3 GDP figure was slightly revised upward to 33.4% (from 33.1%) and initial jobless claims came in at 803K, beating expectations of 880K and improving upon the week prior’s 885K
Personal Income and Spending both declined in November more than expected with spending down 0.4% and income down 1.1%. The income decline was significantly below consensus expectations and will likely put downward pressure on overall demand in Q4 as well as inflation.
Some fears arose over findings of a mutated variant of COVID in the UK, prompting over 30 countries to ban flights from the UK and a rush to study if it reacts differently to treatments and vaccines.