The Pandemic Economy

November 23, 2020

Good morning. The next few months could be rough for the U.S. economy — but better times might not be far off.

Outdoor dining in Seattle.Ken Lambert/The Seattle Times, via Associated Press

‘Unnecessary hardship’

The next few months have the potential to be very unpleasant for the American economy.
Many states are reimposing coronavirus restrictions, which will likely lead to new reductions in consumer spending and worker layoffs. As Jerome Powell, the Federal Reserve chairman, recently said, “We’ve got new cases at a record level, we’ve seen a number of states begin to reimpose limited activity restrictions, and people may lose confidence that it is safe to go out.”
Adding to the economic risks, several of the government’s biggest virus rescue programs are scheduled to expire next month. It isn’t clear whether Congress will renew them, because congressional Democrats and Republicans disagree on how to do so. Democrats favor a larger rescue package than Republicans do.
Without a new stimulus package, a double-dip recession is possible. In an analysis circulating among President-elect Joe Biden’s aides, the research firm Moody’s Analytics predicted that the economy would shrink during both the first and second quarters of 2021, and the unemployment rate would approach 10 percent next summer, up from 6.9 percent last month.
By The New York Times | Source: Moody’s Analytics

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