The most recent economic indicators paint a grim picture of what could be lying ahead for the United States economy after President Donald Trump egregiously mishandled the coronavirus pandemic and the government has failed to provide greater financial support for its own people.
Unemployment claims posted its first weekly back-to-back increase since July and Americans’ savings and income have fallen as fiscal support dries up, according to Bloomberg. University of Michigan’s consumer sentiment rating has also hit a three-month low.
Claims for Pandemic Unemployment Assistance, which helps gig workers, rose by about 466,000 to 9.15 million. The Pandemic Emergency Unemployment Compensation, which helps those with long-term unemployment, has been used by 4.51 million Americans. Both of the programs are set to expire at the end of the year and could leave tens of millions of Americans without much-needed support.
The weakness of the labor market is going to drive the whole economy down, but sectors like manufacturing might keep the economy from officially entering a recession, said Global chief economist at Citigroup Catherine Mann via Bloomberg.
“If claims continue to move higher in the coming weeks, the chances of the U.S. economy tipping back into a contraction will intensify,” said Bloomberg economist Eliza Winger.
The pressure is on the government to act swiftly and pass the fiscal stimulus. Americans are hurting, losing jobs, and are just over one month away from losing vital financial support without any fiscal stimulus package on the horizon to lessen the blow.
With the bleak reality of the American economy, President Donald Trump still marched out on Tuesday to make sure the whole world knows that the Dow Jones Industrial Average broke 30,000 points for the first time.
The stock market does not represent the economy. So don’t listen to Trump when he says the stock market is at an all-time high as he uses that statistic to suggest that the American people and the economy is at an all-time high too. It is not true.
The economic data suggests a somber picture for the American people. And just like the stock market got financial support from the federal reserve, the American government needs to do the same for its own people and pass a fiscal stimulus bill now.
About Ryan Lipton
Ryan is a student at the University of North Carolina at Chapel Hill majoring in Business Journalism. He has written in the past for SB Nation’s Silver and Black Pride, USA Today Sports Media Group, North Carolina Business News Wire, the Daily Tar Heel, and has worked with Ice Cube’s BIG3 basketball league. Ryan is also a regular contributor to MeidasTouch.com