As bad as things have been since COVID-19 disrupted workplaces, stores, schools and aspirations, most economists surveyed by the National Association for Business Economics don’t see them getting better until the end of the year or into 2021, and four out of five predict at least a 25% chance of a “double-dip” recession.
“Only 18% of economists believe the labor market will return to pre-crisis levels in 2021. Most expect the jobs recovery to take years: 41% expect payroll to regain their February level sometime in 2021, while 34% think it won't happen before 2023,” Megan Henney reports for FOXBusiness.
“Over the past three months, the economy has added back less than half -- about 42% -- of the 22 million jobs it lost during the pandemic, data shows. There are still 10.6 million more out-of-work Americans than in February,” Henney adds.
“The gloomy outlook, reflecting 235 respondents’ answers between July 30 and August 10, arrived as Congress stood frozen in stimulus negotiations. Economists have called for billions in fresh aid to keep businesses afloat and maintain expanded unemployment benefits. Four in 10 panelists deemed Congress' fiscal response to the pandemic ‘insufficient,’ and 37% labeled it ‘adequate’; only 11% called the stimulus ‘excessive,’ according to NABE,” Ben Winck writes for Business Insider.
“Respondents were far more positive toward the Federal Reserve and its monetary policy. About three-quarters of panelists said the Fed’s actions were ‘about right,’ while only 2% deemed them ‘too restrictive,’” Winck adds.
“Long-term unemployment helped define the Great Recession. Countless networks, relationships and skills that bound employee to employer were ripped apart in the global financial crisis. It took about eight years for the unemployment rate to recover from that brutal dislocation,” Andrew Van Dam writes for The Washington Post.
“Now economists fear it’s happening all over again. The devastating surge in unemployment in March and April was supposed to be temporary, as businesses shuttered to avert the greatest public health crisis in more than a century. Most workers reported they expected to be called back soon. But nearly half a year later, many of the jobs that were stuck in purgatory are being lost forever,” Van Dam continues, providing both anecdotal evidence and experts’ opinions to support the thesis.
“The Senate adjourned on Aug. 10 without coming up with its version of the COVID-19 relief packaged passed by the House of Representatives in May, and it isn’t scheduled to be back in session until Sept. 7,” Kathleen Howley observes for HousingWire.
“Sorry America, But The Second Stimulus Check May Not Happen After All,” is the even gloomier headline on financial planner Jeff Rose’s piece for Forbes yesterday.
“At this point, there will be no stimulus checks issued in August. There’s a slight chance they’ll go out in September. More likely, a bill will be passed sometime in September, with checks to be issued in October. Whether the timing –- just before the election –- will be intentional or accidental, will be the subject of future debate,” he writes.
Meanwhile, “with the federal government at a standstill on a stimulus package and the challenge of controlling the pandemic and establishing economic stability, the U.S. economy could spiral from a recession to a depression, according to a study by UC Berkeley’s Institute for Research on Labor and Employment,” Audry Jeong writes for The Daily Californian.
“Both California and the United States as a whole are struggling with record-breaking levels of unemployment, according to the study. Much of the economic outcomes California is facing, according to study co-author Sylvia Allegretto, are a result of COVID-19 transmission, testing, tracing and isolating protocol being handled ‘poorly,’” Jeong continues.
“The paper adds that the federal government must provide ‘significant relief’ for states to have the ability to balance their budgets [during] the COVID-19 recession,” Jeong points out.
“We need huge amounts of federal spending, as we did initially, in March and April, to continue until we get the virus under control, and then we can have [an economic] recovery. There’s no possibility of a robust recovery until the virus is under control,” Harvard economist Lawrence Katz tells The Atlantic’s Joe Pinsker.
“Though relief packages are extremely costly, Katz said, the country can certainly afford another one. On top of all the devastation the pandemic has already caused, many Americans are now on the brink of not being able to pay rent or put food on the table –- and all it’d take to stop that is money,” Pinsker adds.