Reported on November 19 that the website of the Daily Congress Hill published an article entitled “Concerns about the double-dip recession increase with coronavirus cases” on November 15. The full text is excerpted as follows:
It seems increasingly unlikely that congressional leaders will reach agreement on another pandemic relief package, and another important round of unemployment benefits will expire in the coming weeks.
Economists from various political parties have been warning that sustained economic growth depends on the control of the coronavirus epidemic. Now, in the face of the increase in cases, many people are more worried.
“To put it lightly, it’s worrying,” said Beth Ann Bovino, chief U.S. economist at S&P Global Ratings. “If this spreads and the government is forced to take a new lockdown, the very fragile recovery right now is bound to fail,” she said.
Earlier this year, S&P Global Ratings predicted several scenarios for the economic recovery. The baseline forecast is a 4% drop in GDP — assuming Congress passes a limited $500 billion relief bill and the surge in coronavirus cases in the winter is under control. But the truth is that there is no pandemic relief plan, and the number of cases is soaring.
There is likely to be a sharper economic contraction, with a decline of up to 5.1%. “It won’t be as much as we’ve experienced in the first half of this year, but it’ll be going to bottom out twice,” Bovino said.
The surge in COVID-19 cases will affect two important aspects of the economy: business operations and consumer confidence.
Incumbent Trump has been strongly opposed to lockdown measures at any government level, and President-elect Biden’s transition team has also said that they support blockade measures targeting hotspots rather than the whole country.
States like Michigan, New York, Oregon, and Virginia have announced more restrictions to curb the spread of the outbreak, including limiting the number of people gathering in individual venues and limiting the opening hours or receptions of bars, gyms and restaurants.
Such measures will help avoid a double-dip recession and avoid a full-scale lockdown like the one imposed in most parts of the country when the pandemic prevailed in April, said Ben Ayers, senior economist at the National Insurance Company.
However, New Mexico ordered a two-week blockade on the 13th, indicating that other regions may soon adopt stricter restrictions. Consumer confidence has fallen by nearly five percentage points this month, almost entirely based on consumer expectations of the future economic outlook, according to preliminary data from the University of Michigan.
Federal Reserve Chairman Powell insists that fiscal stimulus remains one of the most important factors affecting the recent trend of the economy. But House Speaker Pelosi and Senate Majority Leader McConnell are still very divided on reaching agreement on more pandemic relief plans. Pelosi supported a $2.2 trillion bill passed by the House in October, while McConnell hoped that the bill would be close to $500 billion. The possibility of reaching an agreement is decreasing, disturbing millions of people who are still unemployed and thousands of struggling small business owners.
A major small business loan program — the Paycheck Protection Program — has expired, and federal aid to states’ unemployment benefits has largely stopped. If Congress doesn’t act, the remaining federal unemployment benefits program for self-employed and gig economy workers will also expire on December 31. These two plans alone cover 13.5 million Americans.
At a food distribution point in New York, the United States, workers carry free milk.
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