On Tuesday, the United States President Donald Trump moved off talks on another government aid package. Thus, economists say that it will further weaken an economy straining to recover from an epic collapse. Moreover, they say that it will deepen the hardships for struggling businesses and jobless Americans.
Half of all small businesses need more aid from the government over the next twelve years. They need it for survival. That is according to a survey of the right-leaning NFIB. The National Federation of Independent Business said that about one-fifth of small companies are still down fifty percent or more from pre-pandemic levels.
Roughly twenty-five million laid-off Americans are receiving unemployment aid. For them, two-thirds of weekly payments have shrunk. It is because a $600-a-week federal benefit expired more than two months ago. For six weeks, Trump provided an extra $300. Nevertheless, that money has run out.
Economists warn that without further aid situation will harden. In the coming months, families across the country will struggle to avoid eviction, afford food, make rent, and pay bills. Also, it can reduce the overall incomes of Americans to below pre-pandemic levels by year’s end. Therefore, it will slow economic growth and reduce spending. On Tuesday, Federal Reserve Chair Jerome Powell made a speech. So, he thinks that recovery is at risk of derailing unless the government supplied additional support that will come.
Joe Brusuelas is a chief economist at tax advisor firm RSM. Brusuelas said that they now attach a fifty percent probability of a recession over the next twelve months, given what looks to be a growing probability of a second wave of the coronavirus pandemic.
Brusuelas added that the likelihood of a downturn would fall if a massive stimulus is adopted early next year.
Oxford Economics projects that without further federal aid, the economy will eke out just one percent annual growth rate, down sharply from its previous expectation of four percent in the current quarter.
On Wednesday, Trump opened the door to the possibility of a narrower aid package. It would bolster specific industries, notably airlines. Or it will distribute another round of $1,200 stimulus checks to most adults. The prospect sent stock prices surging. It happened a day after they had tumbled in the wake of Trump’s tweet ending talks. Yet, on Wednesday, there was little sign that even a scale-agreement would be reached.
Loretta Mester is the Federal Reserve Bank of Cleveland’s President. She said in an interview on CNBC that the recovery would continue without it. Nevertheless, it will go in a much slower recovery. Furthermore, Mester added that they are still in a big hole.
Nevertheless, Kelly said that it was comfortable to read Trump’s tweet to support immediate additional aid for airlines. He said that he hopes it will get done. Nevertheless, there are critics of aid to his industry. However, Kelly insists that it is not a bailout. It is like a WWII (World War II).
A Census Bureau released a survey on Wednesday. According to it, one-third of adults struggle to pay for their usual expenses.