The U.S. economy is like a semi-trailer truck. No one likes being stuck behind a semi at a stoplight because big trucks don’t go from zero to 60 in 2.5 seconds. Neither does the U.S. economy.
When the pandemic brought our economy to a near virtual standstill early in 2020, the U.S. government and Federal Reserve (Fed) took extraordinary measures to help the economy get going again:
- Congress passed the CARES Act stimulus, which gave Americans and American businesses badly-needed fuel to support economic recovery. Businesses were able to stay open and people had money to spend. That’s important because consumer spending accounts for almost 70 percent of U.S. economic growth.
- The Federal Reserve paved the road and gave it a downward slope by creating a supportive interest rate environment and implementing special lending facilities intended to support businesses, as well as state and local governments. Some programs were funded by the CARES Act.
Government and central bank stimulus helped the American economy get going again.
Is slower growth ahead?
In recent weeks, however, there have been signs economic recovery may be losing momentum and the virus may, once again, be responsible.
Recently, the United States passed a grim milestone. The number of deaths attributed to COVID-19 surpassed 250,000. For perspective, that’s roughly equivalent to the population of Winston-Salem, North Carolina; Irving, Texas; or Buffalo, New York.
Last week, some economic data came in weaker than expected and initial unemployment claims ticked higher. Lucia Mutikani of Reuters reported:
“U.S. retail sales increased less than expected in October and could slow further, restrained by spiraling new COVID-19 infections and declining household income as millions of unemployed Americans lose government financial support…‘Fed officials are saying they might have to do more and today’s data may turn that thinking into a reality.’”
The Treasury curbs the Fed
The tools available to the Fed changed last week. The U.S. Treasury announced it will let several of the Fed’s Treasury-funded special lending programs expire at the end of 2020. Alexandra Scaggs of Barron’s reported the programs include:
- The Main Street Lending Program for small-to-mid-size businesses and non-profits
- The Municipal Liquidity Facility that lends directly to state and local governments
- Corporate Credit Facilities that purchase corporate bonds
For these programs to reopen in the future, Congress will need to appropriate new funds. One economist cited by CNBC said, “U.S. Treasury Secretary Steven Mnuchin’s decision to allow key pandemic relief programs to expire is like stripping the lifeboats from the Titanic.”
Not everyone agreed. “Programs like the municipal bond program and the Main Street Lending Program have not worked, in part because the Fed is a central bank. And when you demand that it take on fiscal government tasks…it does that very carefully, and, frankly, very badly,” explained an analyst interviewed on Marketplace Morning Report.
Despite changing monetary support, U.S. stock markets remained resilient. Ben Levisohn of Barron’s attributed the stock market’s resilience to positive vaccine news, which “…might not have pushed the stock market higher, but it sure was a reason not to sell.” Major indices finished the week slightly lower.
Disruption and Innovation – Thanksgiving Style
Thanksgiving is going to be a lot different this year – and Americans are rising to the challenge. Some are cooking up their favorite recipes and peppering the table with screens so they can share the event from afar with friends and family members. Others are taking the opportunity to move away from turkey and introduce new entrees. No matter what will be on the table, people are finding opportunities to give and reasons to be grateful:
“In my neighborhood, we have decided to divide the Thanksgiving dinner up. Each neighbor participant makes something to share…We will package up our dishes in individual containers to be left on each neighbor’s porch at a determined time. The people who are having a difficult time getting by don’t have to contribute anything – neither do the veterans. We will all enjoy our meal in our separate homes but will definitely be grateful for the kindness and generosity of our neighbors and friends.”
–Sheryl Smetana, an Axios AM reader
“I’m going to have an amazing Thanksgiving all by myself,” Gabriel said. “I will sit on a park bench, and I will think about the great Thanksgivings that I’ve had in my life and be thankful for them. One bad Thanksgiving out of 63 amazing Thanksgivings – that’s pretty good odds. Maybe we should be a little more thankful for what we do have than constantly be complaining about what we don’t have.”
–Person at a food pantry, interviewed by CBS News
“Everyone loves her father-in-law’s potato salad but the family cannot congregate this year to enjoy it…Walker says she resorted to desperate measures. “I reached out to him and asked whether we could maybe send the potato salad in the mail,” she confesses. Because no one wanted to add side servings of botulism to the holiday menu, Walker says, her father-in-law decided to tell everyone how to make the potato salad instead. Numerous long-coveted, heavily-guarded family recipes are being shared for the first time in 2020.”
–Cora Faith Walker, interviewed by NPR Weekend Edition Sunday
Ways to Give Thanks and Improve Your Well-Being
According to the Mayo Clinic, positive thinking can actually make you healthier. Giving thanks – thinking of the blessings and happy moments you experience each day – can improve your life. The many benefits of being grateful include:
- Reducing stress levels
- Improving resistance to colds
- Reducing the risk of coronary artery disease
- Improving breathing in patients with some lung diseases
2020 has been a difficult year for people all over the world. With the pandemic surging and vaccines a few months away, it might be hard for you to stay focused on the positive especially when being with family can even be risky.
Try boosting your physical and mental health by identifying things and people you’re grateful for. Doing one (or more) of these activities should do the trick:
- Keep a gratitude journal
Every day write down the things for which you are grateful – a beautiful sunset, a warm home, the companionship of family or friends. Only positive thoughts go into a gratitude journal.
- Practice mindfulness
Mindfulness is paying attention to the here and now by observing your thoughts without being critical or judgmental. Mindfulness has its roots in Buddhism and has been adopted by many people as a means of managing stress and staying positive.
- Think about the people in your life
It’s easy to be thankful for the people we love and enjoy being around. You may even want to be thankful for people who have made your life more challenging because they may have caused you to accomplish things you might not have otherwise.
Allow yourself to be grateful, and to express your gratitude to the people who contribute to your life and your well-being. We’re grateful to have you in our lives and part of the Bradley Wealth family.
Sending you the warmest of Thanksgiving wishes, and positive thoughts!