US Economy is Improving, Weeks Before The Election. Will Donald Trump Benefit?
Job vacancies, a measure of labour demand, climbed to 6.6 million in July, almost to their pre-crisis level, a Labor Ministry report showed this week.
The U.S. labour market and the US economy, in general, made gains this week, which history says should be good news for President Donald Trump’s re-election campaign.
But the gains may be overshadowed by the tens of millions of Americans still out of work amid coronavirus-related closures and growing concerns that no new government relief program is insight.
Job vacancies, a measure of labour demand, climbed to 6.6 million in July, almost to their pre-crisis level, a Labor Ministry report showed this week.
The strong rebound in job vacancy inflation strengthened last month, overcoming fears of growth-retarding deflation. More frequent data on people’s visits to stores and restaurants also indicated an economic recovery.
However, the economy is far from turning the corner of recovery. At least 29.6 million people were still receiving unemployment benefits as of Aug. 22, according to a report released Thursday, and the number of new jobless claimants was stuck at a high level at 884,000.
Jobless claims have further elevated the stalemate in Washington because a new budget relief bill could mean it’s as good as things get for the economy for a while. On Thursday, the Senate failed to pass a Republican bill that would have provided around $ 300 billion in novel coronavirus relief. Democrats are calling for a $ 3 trillion bill.
# 8220: Part of the healthy recovery is due to generous fiscal stimulus policies that have started to fade, ”Bank of America economists said in a note on Friday. “It has become unlikely that another round of fiscal stimulus will be passed before the election.”
A $ 600-a-week supplement for the unemployed, provided as part of the $ 2.3 trillion government assistance package adopted in March, expired in July, and most of the hundreds of billions of dollars intended to cover Small business wages also provided under the aid program have now been spent.
This could weigh on voters if the job market fails to gain more strength, causing “some problems for the outgoing trader,” said Michael Arone, chief investment strategist at State Street Global Advisors. A new weekly benefit of $ 300 for the unemployed, authorized by Trump, could provide a cushion, although the funding only covers six weeks of payments.
New U.S. cases of COVID-19 have declined since July, but the virus continues to circulate at rates high enough that many businesses are only allowed to operate at reduced capacity, and some not at all. This limits the potential economic growth of the nation as a whole.
“The better the economy is and the more hope people have that there will be a rebound, it probably works for Trump,” said Steven Englander, managing director of Standard Chartered Bank. But with government aid declining as November 3 approaches, “this could be a pretty bad time for the president.”
