Tag: economic recession

Biden Team, Pushing Quick Stimulus Deal, Prepares for Renewed Recession

New York Times logo

Economists warn that lawmakers must pass aid now, as a renewed coronavirus surge chills consumer spending and business activity.

WASHINGTON — Advisers to President-elect Joseph R. Biden Jr. are planning for the increasing likelihood that the United States economy is headed for a “double-dip” recession early next year. They are pushing for Democratic leaders in Congress to reach a quick stimulus deal with Senate Republicans, even if it falls short of the larger package Democrats have been seeking, according to people familiar with the discussions.

Until now, Mr. Biden, Speaker Nancy Pelosi of California and Senator Chuck Schumer of New York, the Democratic leader, have insisted that Republicans agree to a spending bill of $2 trillion or more, while Senator Mitch McConnell of Kentucky, the majority leader, wants a much smaller package. The resulting impasse has threatened to delay additional economic aid until after Mr. Biden’s inauguration on Jan. 20.

Many of the president-elect’s advisers have become convinced that deteriorating economic conditions from the renewed surge in Covid-19 infections and the looming threat of millions of Americans losing jobless benefits in December amid a wave of evictions and foreclosures require more urgent action before year’s end. That could mean moving at least part of the way toward Mr. McConnell’s offer of a $500 billion package. Continue reading.

The United States Is Not Ready for a Recession, But It Can Be

Center for American Progress logoThe United States is currently experiencing one of the longest periods of economic expansion in its history.1 However, the expansion has not reached all households and many are struggling to cover the costs of basic emergencies.2 At the same time, economic growth appears to be slowing, and there are warning signs that a recession is possible in the near future. While downturns are difficult to predict, policymakers have a responsibility both to assess whether the country is prepared for the next recession and to implement approaches to protect Americans from the worst outcomes.

Fortunately, the Federal Reserve and the U.S. government has a variety of tools available to help pull the national economy out of a recession. These tools generally fit into two categories. First, there is monetary policy, which is conducted by the Fed, the independent central bank responsible for setting interest rates, among other things. Second, there is fiscal policy, which is conducted by the executive and legislative branches of the U.S. government. However, these tools may prove less effective in the next recession, in part because the Fed has less room to cut interest rates, its traditional tool to tackle downturns.3 And fiscal policy, while still potentially effective, relies on politicians’ willingness to use it in the right way, which has not always been the case. For example, during the Great Recession, Congress engaged in austerity measures, reducing spending well before the economy fully recovered.4 Continue reading “The United States Is Not Ready for a Recession, But It Can Be”

Slowing job growth raises 2020 stakes for Trump

The Hill logoAn underwhelming August jobs report is adding to fears of an economic slowdown, raising the stakes for President Trump‘s reelection bid.

The U.S. added roughly 130,000 jobs in August, according to federal data released Friday, undershooting economists’ expectations as the labor market continues to slow.

The resilient job market has been one of Trump’s top selling points as he attempts to win re-election on the strength of the U.S. economy. But the disappointing August jobs report threatens to undercut Trump’s message ahead of a critical stretch for the economy.

View the complete September 6 article by Sylvan Lane on The Hill website here.

Recession warnings pile up as shutdown wraps up fourth week

Maryland resident Rosa Marquez displays her bills while standing near other furloughed security officers and custodians outside Senate Majority Leader Mitch McConnell’s office. An extended shutdown could push first-quarter growth close to or even below zero. Credit: M. Scott Mahaskey, Politico

The impasse is triggering alarms about an already fragile economic environment.

The partial government shutdown was supposed to be a brief non-event for the economy. Now it’s starting to look like a serious crisis that could nudge the U.S. toward recession and threaten President Donald Trump’s economic message during his reelection campaign.

Across Wall Street, analysts are rushing out warnings that missed federal paychecks, dormant government contractors and shelved corporate stock offerings could push first-quarter growth close to or even below zero if the shutdown, which is wrapping up its fourth week, drags on much longer.

Their broader fear: The protracted impasse could convince consumers and businesses that the federal government will spend all of 2019 on the brink of crisis — whether on the border wall, trade with China or the debt limit. That could choke business investment and consumer spending, bringing an end to one of the longest economic expansions on record.

View the complete January 17 article by Ben White on the Politico website here.