Name: Wall Street wonders how bad the economy has to get for Congress to act
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Wall Street wonders how bad the economy has to get for Congress to act

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Illustration: Aïda Amer/AxiosWall Street is working out how bad the economy will have to get for Congress to feel motivated to move on economic support.Why it matters: A pre-Thanksgiving data dump showed more evidence of a floundering economic recovery. But the slow drip of crumbling economic data may not be enough to push Washington past a gridlock to halt the economic backslide.What they're saying: "What I can't figure out is what what is going to need to happen to kind of light a fire under Congress to actually compromise and get something done," says Liz Ann Sonders, chief investment strategist at Charles Schwab, in an interview with Axios earlier this month.Catch up quick: It’s unclear what will happen when President-elect Joe Biden, who has championed support for a big relief package, takes office — particularly if Republicans hold onto the Senate.What's going on: While you were readying for turkey, a parade of data revealed a potentially troubling combination of rising layoffs, falling income and plummeting consumer confidence.But pick your economic narrative: Millions are suffering, but economic conditions haven’t completely buckled from the backdrop of an outbreak that’s worse than ever before. The data are nowhere as bad as they were when the pandemic first hit.Details: Regular state , which are an imperfect proxy for layoffs, rose to nearly 828,000. It’s the first time initial claims have risen for two straight weeks since July. Add in applications for the Pandemic Unemployment Assistance program, and new claims hit 1.1 million.Income: 0.7% from the prior month, while consumer spending rose 0.5% in October. That’s stronger than economists expected, but still the slowest spending pace since the recovery began.Consumer confidence: An index that measures consumers’ view of current in November from 85.9 last month, according to the University of Michigan.The backdrop: The shiny stock market — betting on a vaccine, ongoing support from the Fed and some sort of coronavirus aid package — is thriving.The bottom line: At the onset of the pandemic, previously unthinkable numbers of Americans were filing for unemployment and the stock market was cratering fast — pushing Congress to move quickly. The backdrop now is drastically different.What's next: The November jobs report — out Friday morning — is expected to show the economy added 433,000 payrolls, according to a FactSet estimate.The U.S. economy added 245,000 jobs in November, while the unemployment rate fell to 6.7% from 6.9%, the government said on Friday.Why it matters: The labor market continues to recover even as coronavirus cases surge— though it's still millions of jobs short of the pre-pandemic level. The problem is that the rate of recovery is slowing significantly. President-elect Biden faces a fragile recovery that could easily fall apart, as the economy remains in worse shape than most people think.Why it matters: There is a recovery happening. But it's helping some people immensely and others not at all. And it's that second part that poses a massive risk to the Biden-Harris administration's chance of success. Friday's deeply disappointing jobs report should light a fire under Congress, which has dithered despite signs the economy is struggling to kick back into gear.Driving the news: President-elect Biden said Friday afternoon in Wilmington that he supports another round of $1,200 checks.Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Illustration: Aïda Amer/AxiosWall Street is working out how bad the economy will have to get for Congress to feel motivated to move on economic support.Why it matters: A pre-Thanksgiving data dump showed more evidence of a floundering economic recovery. But the slow drip of crumbling economic data may not be enough to push Washington past a gridlock to halt the economic backslide.What they're saying: "What I can't figure out is what what is going to need to happen to kind of light a fire under Congress to actually compromise and get something done," says Liz Ann Sonders, chief investment...

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Wall Street wonders how bad the economy has to get for Congress to act

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