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(Reuters) – A surge in COVID-19 cases in several US states and the rollercoaster prospects of new pandemic aid from Congress threaten to push the importance of traditional economic data to the back burner for the voters in the November 3 elections. .
Overall, likely voters continue to say they have more confidence in the ability of US President Donald Trump to create jobs than Democratic challenger Joe Biden.
But the former US Vice President leads voter assessments of each candidate’s ability to cope with the pandemic, and also has an advantage in the presidential race, according to the most recent Reuters / Ipsos poll https: // polling .reuters.com / topic / 2020-election.
Trump, who spent three days in a military hospital after being diagnosed with COVID-19 last week, canceled talks this week between the White House and Democratic Speaker of the US House of Representatives, Nancy Pelosi, about a new fiscal stimulus package.
The president, who is seeking reelection in the Nov. 3 vote, has partially reversed that stance, saying he would support piecemeal legislation to provide funding for small businesses and airlines and stimulus controls for individuals. On Thursday, he said that negotiations had restarted.
Trump’s fellow Republicans in Congress have resisted receiving new aid, in part because of concerns about increasing the federal government’s debt. Pelosi, who has led the Democrats’ push for a comprehensive package that includes aid for state and local governments and unemployed Americans, said Thursday that a deal was not closed.
Failure to pass additional government stimulus would slow the economic recovery and hit low-income families and communities of color especially hard, Federal Reserve Chairman Jerome Powell and several of his colleagues warned this week.
In this “broken crockery view, if the economy stays below average for too long, bad things happen and potential output suffers,” said Vincent Reinhart, a former Fed economist who is now the economist. Mellon’s boss.
One positive point this week in economic data was a report showing that the US services sector grew faster than expected in September.
But the number of Americans relying on some form of unemployment insurance remained stagnant above 25 million in the week ending September 19, and the number of people who filed new claims for unemployment benefits remained high during the week ending October 3.
Chart: Unemployment Claims Still High: https://graphics.reuters.com/USA-ELECTION/ECONOMY-JOBLESS/azgponxegvd/chart.png
An even bigger factor for voters may be the rise in COVID-19 infections in Wisconsin and a recent spike in Michigan, two key states on the battlefield in the presidential election. Nationally, infections continue to rise, data compiled by Johns Hopkins University shows.
The disease caused by the new coronavirus has killed more than 211,000 people in the United States, according to a Reuters tally.
“Our forecast remains that the pace of the economic rebound will continue to slow as long as the virus remains a threat and in the absence of additional fiscal stimulus,” JP Morgan economist Jesse Edgerton wrote in a note Thursday.
Economists at various Wall Street banks forecast some kind of stimulus package no matter which candidate wins, but they say a Biden presidency, if Democrats also regain control of the US Senate, will likely result in a bigger one.
Meanwhile, Edgerton noted, “We suspect that consumers and businesses would largely get ahead if the recent spike in virus cases continues, as it did over the summer.”
(Reporting by Ann Saphir; Editing by Paul Simao)
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