Will We See A Recession In First-Half 2021?

Making matters worse, new more transmissible mutations of the coronavirus have popped up in Britain, South Africa, and Brazil, prompting scientists to learn more about how those variants might be causing a worldwide increase in infections. On Sunday, Japan announced it had discovered yet another new mutation in four travelers arriving from Brazil.

More COVID Economic Lockdowns Ahead in the US?

Most forecasters now agree the economic lockdown of “non-essential” businesses last year was not effective at stopping the spread of the virus. They also seem to agree now that the lockdown led to the permanent closure of tens of thousands of small businesses.

As a result, most forecasters agree that a new round of lockdowns should be avoided this year. I couldn’t agree more. However, what I read this week says President-elect Biden has stacked his Coronavirus Task Force, and even some members of his Cabinet, with politicians who are largely not opposed to another round of economic lockdowns.

At this point, it is impossible to know if another round of lockdowns is likely just ahead. Let’s hope not, but it very likely depends on how much worse the pandemic gets before the vaccines get ahead of the epidemic. We’ll just have to see.

Early 2021 Economic News So Far is Not Encouraging

Here at mid-month, there is not a lot of economic news so far in the New Year, but what we have seen is not encouraging. Initial claims for new unemployment benefits announced last Thursday were higher than expected.

The unemployment rate report for December was discouraging. The Labor Department reported Friday that nonfarm payrolls fell by 140,000 last month. That was worse than expectations for a drop of only 50,000 jobs from economists surveyed by Dow Jones.

Job creation came to a halt in December as restrictions brought on by surging COVID-19 cases hammered virus-sensitive industries, particularly bars and restaurants, which lost nearly half a million positions. Fortunately, the official unemployment rate held steady at 6.7%.

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