Other real-time measures capture economic activity more broadly. The share of small firms which have temporarily closed is probably rising. Consumer spending in the week ending November 22nd was down by 5% compared with the one before, according to Cardify, a data provider. Using mobility data from Google, The Economist has constructed an economic-activity index measuring visits to workplaces, transport hubs and places of retail and recreation. After rising steadily during the autumn, the index has fallen back—though America still looks better than Europe, where the economic-activity index has crashed as governments have imposed another round of lockdowns. JPMorgan Chase, a bank, produces an estimate of monthly American GDP growth from a range of real-time data. In a report published on December 2nd, it suggests that output stopped growing in November.
Three factors explain the slowdown. To some extent it was inevitable. Loosening lockdowns had allowed millions of people to return to work and start spending again. But there was no comparable loosening of coronavirus restrictions after that. So it was never realistic for America to repeat the 7.4% quarter-on-quarter GDP growth that it saw in July to September.
Fiscal policy is the second factor. Another reason the economy bounced back so quickly in the summer was the enormous generosity of the stimulus packages agreed by Congress in the spring, worth some $3trn (or 14% of GDP). Yet Congress has so far failed to agree to another one, even though the most bullish forecasters still reckon a package worth over $500bn is required to help the economy back to some semblance of normality. A programme set up by President Donald Trump to raise unemployment- insurance (UI) payments by $300 a week, which had boosted aggregate household incomes by 1.5%, wound down in October. States and local governments, facing a severe budget crunch, cut over 1m jobs in the first six months of the pandemic, more than they lost even during the financial crisis of 2007 to 09.
The third and most important reason for the slowdown is the virus itself. Until recently many Americans, especially in Republican- leaning areas, seemed oddly happy to go about their business as normal. In South Dakota in September and October, for instance, visitors to sites of retail and recreation were 1.5% higher than usual for that time of year, even as coronavirus infections surged. Analysis by The Economist, drawing on Google data and work by Mark Muro and colleagues at the Brookings Institution, a think-tank, found that in the summer and autumn people in pro-Trump areas were half as likely to avoid public places as people living in areas that had voted for Joe Biden.