Tag: U.S. economy

A Collapse That Wiped Out 5 Years of Growth, With No Bounce in Sight

New York Times logoThe second-quarter contraction set a grim record, and it would have been worse without government aid that is expiring.

The coronavirus pandemic’s toll on the nation’s economy became emphatically clearer Thursday as the government detailed the most devastating three-month collapse on record, which wiped away nearly five years of growth.

Gross domestic product, the broadest measure of goods and services produced, fell 9.5 percent in the second quarter of the year as consumers cut back spending, businesses pared investments and global trade dried up, the Commerce Department said.

The drop — the equivalent of a 32.9 percent annual rate of decline — would have been even more severe without trillions of dollars in government aid to households and businesses. Continue reading.

Coronavirus pandemic pushes U.S. economy to worst-ever contraction

Axios logoThe U.S. economy shrank at an annualized 32.9% rate in the second quarter — the worst-ever contraction on records that date back to 1947, the government said on Thursday.

Why it matters: Widespread lockdowns to contain the spread of the coronavirus pandemic from ravaged the economy in a way that’s never been seen in modern times, and hope for a swift recovery has been dashed as cases have surged nationwide.

Between the lines: The staggering contraction beats the last record set in 1958, when GDP shrank at an annualized 10% rate. Continue reading.

Yale study on $600 unemployment lifeline championed by Democrats destroys GOP’s favorite talking point

AlterNet logoA new study by Yale economists out this week debunks the repeated GOP talking point that the $600 federal expansion of unemployment benefits has disincentivized people from returning to work—findings published the same day Senate Republicans released a coronavirus relief proposal which critics condemned as an “utter disgrace” that will “unleash widespread suffering” on people nationwide.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act that Congress passed and President Donald Trump signed in late March provided those who qualified for unemployment insurance (UI) with an extra $600 per week on top of state benefits, a boost that meant total payments for some low-wage or middle-class workers exceeded their normal weekly incomes. With the GOP in the Senate now refusing to pass an extension approved by the Democrat-controlled House, those added benefits are set to expire on July 31.

Despite polling that shows the public popularity of the added boost—and economists warning that taking it away would spell financial catastrophe for the country—the Trump administration and GOP lawmakers who oppose an extension claim it encouraged layoffs early in the pandemic and deters people who make more from UI benefits than their former job from returning to work as businesses reopen. Continue reading.

GOP hunts for ‘Plan B’ as coronavirus talks hit wall

The Hill logoRepublicans are hunting for a backup plan on coronavirus relief as bipartisan negotiations tasked with finding a deal appear to be making no measurable progress.

The discussions come as Treasury Secretary Steven Mnuchin and White House chief of staff Mark Meadows have met every day this week with House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Charles Schumer(D-N.Y.) but are, in their own words, “nowhere close to deal” and “very far apart.” 

With the clock ticking — the House was supposed to start a five-week break on Friday and the Senate on Aug. 7 — Senate Republicans and the White House are floating myriad alternative ideas as they try to figure out how to break the logjam. Continue reading.

Fed chief: New surge in cases is beginning to weigh on the economy

Washington Post logoThe Federal Reserve is keeping interest rates unchanged at close to zero, but the Fed is also extending programs to buy Treasuries and mortgage-backed securities.

The head of the Federal Reserve said Wednesday that rising numbers of coronavirus cases since mid-June are beginning to weigh on the economy, reinforcing that the fate of the recovery depends on the pandemic.

“On balance, it looks like the data are pointing to a slowing in the pace of the recovery,” Federal Reserve Chair Jerome H. Powell said during a news conference on Wednesday. “I want to stress it’s too early to say both how large that is and how sustained it will be.”

Job gains from May and June came “sooner and stronger” than expected, Powell said. But those encouraging signs were closely followed by a surge in coronavirus cases nationwide. Powell said that at the same time people’s lives depend on containing the public health crisis, it is also important to “deal with the economic ramifications.” Continue reading.

Biden announces plans to boost black and Latino finances

Washington Post logoWILMINGTON, Del. — Joe Biden, the presumptive Democratic presidential nominee, announced a plan Tuesday to spend tens of billions of dollars to help people of color overcome inequities in the economy, a move that comes amid financial and racial upheaval nationwide.

The plan calls for dedicating $30 billion of previously proposed spending on a small-business opportunity fund for black, brown and Native American entrepreneurs. Biden also proposed tripling the goal for federal contracting with small disadvantaged businesses, from 5 percent to at least 15 percent of all spending on materials and services by 2025.

“We need to make bold, practical investments to recover from the economic mess we’re in and to rebuild for the economic future our country deserves,” Biden said, adding that his plan would “deal with systemic racism and advance racial equity in our economy.” Continue reading.

Tens of thousands of shuttered US businesses now closing permanently after GOP refuses urgent relief for Main Street

AlterNet logoWith Republicans in Congress intent on drastically reducing aid for unemployed Americans and altering the Paycheck Protection Act in the next coronavirus relief bill, workers across the country are rapidly losing hope that they will ever be able to return to their jobs, according to new polling.

A survey released Friday by AP-NORC found that while 78% of workers who were furloughed or laid off in the early days of the pandemic believed in April that they’d be able to return to work eventually, just 34% are optimistic about their prospects now. Just 18% have already returned to their jobs, and 47% say they no longer believe their old jobs will be available ever again.

The same poll found that 72% of Americans would still rather see the federal, state, and local governments impose restrictions aimed at preserving public health rather than prioritizing reopening economies while the coronavirus continues to spread across the country. Continue reading.

‘This whole house of cards is gonna collapse’: GOP shutters Senate with US on verge of economic catastrophe

AlterNet logoAs Senate Republicans headed home for the weekend without extending unemployment insurance benefits or approving other economic relief programs that could help millions of Americans weather the ongoing financial catastrophe of the coronavirus pandemic, progressives and congressional Democrats warned that disaster is on the horizon.

“This whole house of cards is going to collapse,” Rep. Dan Kildee (D-Mich.) warned during a press conference Friday afternoon.

As Common Dreams reported, the departure of the GOP-controlled Senate for the weekend without a resolution to the benefits questions earned the upper chamber’s leadership a harsh rebuke in a speech from Sen. Ron Wyden (D-Ore.), who called the decision by Senate Majority Leader Mitch McConnell to recess until Monday unacceptable. Continue reading.

Congress set for brawl as unemployment cliff looms

The Hill logoCongress is barreling toward a showdown over federal unemployment benefits, with millions of Americans hanging in the balance.

As part of the March $2.2 trillion coronavirus bill, Congress agreed to a $600-per week boost of unemployment benefits, but those are set to start expiring in a matter of days.

What to replace it with is shaping up to be a clash as lawmakers and the White House prepare to negotiate the fifth coronavirus bill. Continue reading.

Mnuchin says GOP has ‘fundamental’ deal on $1T coronavirus relief package

The Hill logoThe White House and Senate Republicans on Thursday reached a “fundamental agreement” on a coronavirus package, according to a top negotiator.

Treasury Secretary Steven Mnuchin — after a meeting with Senate Majority Leader Mitch McConnell (R-Ky.) and White House chief of staff Mark Meadows — said staff were now trying to finalize text of the agreement, which is expected to be released as a group of bills instead of one piece of legislation.

“We just had a very productive discussion with the leader. We do have a fundamental agreement between the White House and the Republicans in the Senate,” Mnuchin told reporters. Continue reading.