Grasping Reality on TypePad, by Brad DeLong

The Macro News: Th 2020-12-10: Starting last June with every week the US economy got better—at least, the number of people continuing to claim unemployment insurance fell when we calculate it on a seasonally adjusted basis. Some of this was people who had been receiving unemployment insurance finding jobs. Some of this was people reaching the end of the benefits to which they were entitled. Nevertheless, if you were people were flowing into the pool of those receiving unemployment insurance payments then were getting out of it.

But this past week's numbers are a sign that that period has come to an end. While one frost does not make a winter, both the seasonally adjusted number of people continuing to receive and the number of people newly claiming unemployment insurance benefits jumped up last week.

The natural way to read this is that the third wave of the coronavirus plague is starting to send the economy into renewed recession. It is, as it was before, not because of lockdowns. As before, the principal cause of the economy turning down is people getting scared, and deciding that they will postpone spending that requires close personal contact off to next year.

The professional Republicans appear to have decided to claim that what the government needs to do is to keep people hungry this winter so that they think they must go to work will-virus or nill-virus, and to block government action to keep spending economy wide from declining.

It’s going to be a bad winter.