The outlook for the U.S. economy has dimmed in the run-up to the presidential election, according to a Reuters poll which showed that a recent resurgence in novel coronavirus cases ran a high risk of halting the economic recovery.
New coronavirus infections have touched record levels in the United States recently, and the number of hospitalized COVID-19 Americans jumped to a two-month high, leading to further restrictions. In Europe, many countries have also reimposed measures to curb the disease’s spread.
The result of the Nov. 3 U.S. presidential election, if available promptly, could swiftly end the gridlock on a second fiscal stimulus bill.
“The pace of the recovery is already slowing as households and businesses are struggling with the impact of the lockdown and the virus,” said Philip Marey, senior U.S. strategist at Rabobank. “Meanwhile, the extension of the fiscal stimulus has yet to arrive, is late, and is likely to be modest.”
“The outcome of the election will likely dictate the trajectory for additional stimulus,” noted Michelle Meyer, head of U.S. economics for Bank of America Securities.
“A clear victory could accelerate stimulus negotiations. In the event of a contested election, the political environment creates a challenge for additional stimulus.”
But one of the biggest economic worries accruing from the pandemic is high unemployment. Over 80%, or 41 of 49 respondents, said the U.S. jobless rate would not return to pre-COVID-19 levels until 2023 at least, including two respondents who said it never would.
The wider poll showed the jobless rate averaging 8.3% this year, 6.8% next and 5.5% in 2022. It was 3.5% earlier this year before the pandemic took hold.
The economy contracted in the second quarter at an annualized 31.4% pace, its sharpest decline in at least 73 years. It is forecast to grow 4% this quarter after an expected record rebound of 31% last quarter.
But growth is now forecast to slow further during each quarter next year, and much more than predicted last month.
Reference: Reuters
Thai
Eng