Increasing COVID cases alters holiday, travel plans. Economists revise Q4 GDP forecasts downward as more restrictions likely.

Yesterday Washington saw a 72% increase in weekly unemployment claims. While that may anomalous, it may be a warning of things to come, as The Seattle Times reports.

Washington led the nation in new unemployment claims last week, and while that may be just a seasonal fluke, economists say the state could be headed for another wave of pandemic-related job losses.

“I suspect we are seeing the beginnings of a second major wave of layoffs to rival what we saw in March and April, and driven by a spike in COVID cases that looks much worse than what we saw then,” said Jacob Vigdor, an economist at the University of Washington Evans School of Public Policy and Governance. 

State leaders are stepping up efforts to stop the spread. Gov. Inslee, along with the governors of California and Oregon, is urging interstate travelers to self-quarantine for 14 days. Inslee has also called on Washingtonians to “rethink these holidays.” 

Inslee and his wife, Trudi, said their own family would forgo its traditional in-person Thanksgiving of a potluck, touch football and turkey sandwiches due to the danger of the pandemic.

They urged people to not gather with friends or family outside their households.

The new warnings are being received favorably. 

Some business leaders welcomed Inslee’s focus Thursday on private family gatherings and on personal actions — and hoped it signaled fewer business restrictions in any future COVID-19 response by the state.

“We can’t afford to go backwards on this issue … and close more companies,” said Kris Johnson, president of the Association of Washington Business. “We can’t afford to go backwards and have more people lose their jobs.

“Wear a mask, save a job, take personal responsibility for your actions at home,” he added.

Already, economists are revising downwards their expectations for fourth quarter growth, reports Calculated Risk.

Most economists are revisiting their Q4 forecasts. In their previous forecasts, many assumed some additional disaster relief in Q4, and many underestimated the current surge in COVID.

CR adds,

One well known private forecaster (with a great track record) in now forecasting negative GDP in Q4. Depending on further delays in disaster relief, and the impact of the COVID surge, we might see others move to negative GDP soon.

The ST story on Inslee’s warnings on holiday gatherings contained an upbeat message.

Inslee expressed confidence this would be a one-year sacrifice by families, saying a vaccine should be on the way by next year.

The sooner the better.