Delta Decline

While clearly destructive, the US economy is proving surprisingly resilient against the Delta variant. August M-o-M retail sales rose a strong 0.7%, initial weekly unemployment claims just hit their two lowest readings since the pandemic, and manufacturing activity is steadily strengthening. While spending on travel and concerts slid, Americans pivoted by again boosting spending on goods. Thus, 21Q3 GDP will probably tumble by at most two percentage points to 4.5%.