December 2020 Economic Update

Winter is Coming

December 10, 2020


Public Trust Trading Desk

With positive developments on the vaccine front, a medical solution to the pandemic is now in sight, but the recovery path ahead remains challenging and prone to setbacks as illustrated by recent economic indicators. Daily COVID-19 cases surpassed 200k for the first time during the first week of December while consumer confidence indexes in November recorded their first monthly declines since July as new business restrictions across the country took effect.

November marked the seventh consecutive month of employment growth, but the steadily cooling pace of job gains suggests the labor market recovery is losing steam. As measured by the change in nonfarm payrolls, the U.S. economy added just 245k new jobs in November, well-below consensus and down meaningfully from the 610k print registered in October. The headline unemployment rate fell slightly to 6.7% although this is partly owed to a decline in the labor force participation rate.

With expanded unemployment benefits set to expire by year-end, market participants continue to pay close attention to the situation in Washington as congressional leaders work to craft a new relief bill. While Congress appears to be getting closer to a deal, talks of a potential $908 billion stimulus package remain hung up on disagreements over aid to states and liability protection for businesses. Bipartisan lawmakers have until December 18 to strike a deal or pass an extension on their holiday recess to avoid a government shutdown.

The recent surge in COVID-19 cases and subsequent tightening of business restrictions may signal a rough winter for Americans, but the vaccine offers hope for better days ahead. President-elect Joe Biden and his administration will be tasked with the unique challenge of vaccine production and distribution, sure to be the top agenda item when he and his appointees assume office in January. While the outlook for growth next year remains uncertain, one thing is for sure – 2020 is finally almost behind us.

Current Economic Releases

GDP QoQQ3 ’2033.10%
US UnemploymentNov ’206.70%
ISM ManufacturingNov ’2057.50
PPI YoYOct ’20-1.10%
CPI YoYOct ’201.20%
Fed Funds TargetDecember 7, 20200.00% – 0.25%

Treasury Yields


Agency Yields


Commercial Paper (A1/P1)



Source: Bloomberg
Data unaudited. Many factors affect performance including changes in market conditions and interest rates and in response to other economic, political, or financial developments. Investment involves risk, including the possible loss of principal. No assurance can be given that the performance objectives of a given strategy will be achieved. All comments and discussions presented are purely based on opinion and assumptions, not fact. These assumptions may or may not be correct based on foreseen and unforeseen events. The information above is not a recommendation to buy, sell, implement, or change any securities or investment strategy, function, or process. Any financial and/or investment decision should be made only after considerable research, consideration, and involvement with an experienced professional engaged for the specific purpose. Past performance is not an indication of future performance. Any financial and/or investment decision may incur losses.

Previous Monthly Reports

September 2020 Economic Update

The U.S. economy has shown considerable strength since contracting by one-third in the second quarter earlier this year. Consumer spending, accounting for roughly…

Stay in the loop

 Sign up to receive perspectives on markets, investment strategies, and economic outlook advice.