President Trump’s poll numbers are a factor in predicting the probability of a second stimulus. … [+]
Second-stimulus checks are all the rage these days with experts parsing the pronouncements of the president and others in an attempt to read the paid tea leaves. The reality is that the odds of a second direct payment remain low, with resistance among Senate Republicans and skepticism even among Senate Democrats. However, instead of relying on rhetoric, a better way to measure the probability of a second stimulus check is to focus on three interlocking factors.
# 1: renewed outbreaks of coronavirus
The current economic slowdown was directly caused by the coronavirus pandemic, which forced large areas of the nation to close. While most states have begun to reopen at least partially, there have been renewed outbreaks of coronavirus in many states. The Covid-19 revival will stifle both business and consumer demand, which are critical to catalyzing the economy. Consumer spending, for example, is still moderate compared to pre-Covid-19 levels.
“The renewed outbreak will make recovery difficult,” said Carl Tannenbaum, chief economist at the Northern Trust in Chicago. The New York Times. “I can’t help but think that consumers’ willingness to be in crowded places has decreased. It’s going to be a long way to get back to where we were before the pandemic. “On Wednesday, the US reported the highest number of cases in a day since the coronavirus arrived. Currently, 29 states have an increasing number of cases, According to a New York Times database, with a high concentration in the south and west, several states, including Texas, Arizona and Florida, have been forced to pause their reopening plans.
Texas, which has seen an increase in new cases coupled with an increase in hospitalizations, serves as a good case study. The increase in cases has alarmed officials and caused Governor Greg Abbott to “pause any other phase to open.” “There has literally been an explosion in the number of covid-19 patients,” said Abbott, noting that the “massive increase in spread” has affected small communities and large cities alike. These breaks will undoubtedly delay recovery in Texas. As an example, Abbott banned elective surgeries in four counties to preserve beds for coronavirus cases. This is a smart move, but it will have economic repercussions by causing already struggling hospital systems to incur even greater losses.
Relationship with a second stimulus control:
The first round of stimulus checks was backed because the immediacy and severity of the economic decline left millions without a paycheck. “We wanted to get money out quickly. We use rebate checks to do that, ”said Senator Ben Cardin (D-Maryland). Since most states were in the process of reopening, Cardin commented several weeks ago that it may be time to use a different fiscal policy solution. However, with renewed outbreaks and possible state closings, or at least delays in reopening, senators may reconsider.
Similarly, many members of Congress had conditioned their support for a second stimulus check and a larger stimulus package on what is needed to help Americans. “I am open to anything that helps Main Street if we need to help them move forward,” said Rep. Greg Pence (R-Indiana). “I think it is a little premature in my state, the economy is very good, we are very sure of the virus, so I think we have to go slowly, we do not go ahead with a second stimulus package.” With renewed outbreaks and a virus chart that’s anything but flat, Pence and others may have a change of heart.
The result:
An increase in coronavirus cases and continued outbreaks in the United States will stifle economic recovery. If a rapid resurgence continues, expect increased demand for Congressional intervention and a second stimulus check.
# 2: unemployment rate
There will be a strong relationship between the renewed outbreaks and the type of economic recovery the United States will have. “There is a lot of turmoil in the job market, a lot of turnover,” said Joel Prakken, chief US economist at research and consulting firm IHS Markit. “The improvement in cases is worrisome.” More specifically, the unemployment rate will be used as a measure to measure the speed of recovery and the size of the additional stimulus measures that are needed.
We have already seen politicians take advantage of unemployment data to frame the debate on the upcoming stimulus bill. When May’s unemployment data was released and showed a decline in the unemployment rate, Republicans quickly used it to curb the push for more coronavirus relief aid. “It takes a lot of wind from the sails of any phase 4, we don’t need it now,” said Stephen Moore, economic adviser to the White House. “There is no reason to have a higher expense bill. The sense of urgent crisis dissipates greatly in the report. ”
Relationship with a second stimulus control:
June unemployment data will be released on Friday, July 2. If you show a further decrease in the unemployment rate, the probability of a second stimulus control will continue to decrease. However, an increase in the unemployment rate predicts a greater probability of a second stimulus check.
Initial unemployment claims in regular state programs decreased slightly this week, although it was also the fourteenth week in a row with a million or more claims. At the same time, companies have continued massive layoffs, including Macy’s recent cut of 3,900 corporate jobs. Other companies, including Tapestry, the parent company of Coach, Barnes & Noble, General Electric, Uber and Airbnb, had also announced that they would fire thousands of workers. These layoffs should be reflected in the June unemployment data to be released. Additionally, a recent survey by the National Federation of Independent Businesses found that 14 percent of employers “planned to cut workers after availing loans from the Paycheck Protection Program.”
The result:
The possibility of a second stimulus check may largely depend on the sentiment created by the upcoming unemployment rate and the jobs report.
# 3: Trump poll numbers
How ForbesAndrew Solender reported: “A total of 19 oscillating state voter polls from four different pollsters were released Thursday, with former Vice President Joe Biden leading President Trump in each, including in historically Republican states like Arizona, Georgia and Texas”. “This included a Fox News poll showing Trump crawling into another key state, Florida.
The new polls reinforce the deterioration of the president’s position in the last six months. In six battlefield states, Trump has lost ground to Biden. Biden’s leadership has grown from two percentage points to nine since October, according to Times / Siena polls. While 42 percent of voters in the battlefield states approve of how Trump is handling his work, 54 percent disapprove of it, according to New York Times polls.
Interestingly, there is one area in which Trump is outpacing Biden: the economy. Trump “maintains a substantial advantage in the economy, which could become an even more central issue in what has already been a volatile electoral cycle.” Trump has a 56 percent approval rating in the economy, compared to a 40 percent disapproval rate, which is almost a perfect inverse of his overall approval rating.
Relationship with a second stimulus control:
If the economy is all Trump has left you ahead of Biden, you can try pulling out all the stops to catalyze it, including an aggressive push for a second stimulus check.
“President Trump told attendees that he strongly supports sending Americans another round of stimulus checks, expressing the belief that the payments will boost the economy and help their reelection chances in November,” according to The Washington Post.
The result:
The more the Trump poll numbers drop, the more likely he is to push for a second stimulus check.
Additional related readings:
Second stimulus checks: 3 most critical dates to consider
Second stimulus check update: skepticism from an unexpected source
President Trump alleges that the next stimulus check (or package) will arrive in ‘a couple of weeks’; Do not hold your breath
Don’t wait for the next stimulus bill until the end of July
Second stimulus check and an additional unemployment benefit of $ 600 in life support after Jobs’ May report
Sorry, Republicans refuse to compromise in the second round of stimulus checks
The HEROES Act passes into the house; Skip $ 2,000 recurring stimulus checks and other notable items
Don’t be fooled by the official unemployment rate of 14.7%; The actual figure is even scarier
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