Markets rise on stimulus hopes; GDP down but job figures up; lockdown is leading people to save: Here's how today's headlines could affect your money.
The major indexes rose Wednesday morning on optimism that Treasury Secretary Steven Mnuchin can make progress on negotiations with House Speaker Nancy Pelosi about the latest proposal for a coronavirus stimulus package. "I think we're hopeful that we can get something done," he said at a conference co-sponsored by CNBC and Institutional Investor.
Leading the rally: stocks sensitive to the economic recovery, including airlines, banks, and cruise operators.
The U.S. Gross Domestic Product (GDP) for the second quarter of 2020 — April, May, and June, when much of the country was in lockdown — decreased at an annual rate of 31.4%, according to the latest revised figures from the Bureau of Economic Analysis.
The sale of "private goods" was down 34.4% as people reduced overall economic activity. In other words, Americans were spending less money.
In better news, private companies added 749,000 jobs in September, well ahead of the Dow Jones estimate of 600,000, according to the ADP's monthly report.
Video by David Fang
Since the pandemic started, savings rates have gone way up: In March, the personal savings rate was 12.7%. In April, it shot up to a record 30%. In July, the most recent figures available, it was 17.8%.
While a high national savings rate can be challenging for the economy, it can be great for you to have more cash on hand, as long as you use it to achieve goals like paying down debt and bolstering your emergency fund.
The GDP, which stands for gross domestic product, is the total monetary value of all goods and services produced in a country's economy over a specific time period. It's arguably the most important indicator of the health of the economy.
Although the daily news can have an impact on your wallet, remember to take a long-term outlook when it comes to decisions on spending, saving, and investing.
More from Grow: