With a month before the election situation, the U.S. Here is the situation facing the economy: Job growth is stalling. The reversal is mounted. And no more help.
American homes and businesses are helping the economy grow in the spring without two months of increased unemployment benefits, low-interest loans and other programs. And now, after President Trump announced Tuesday that he is cutting off provocative negotiations until after the election, the wait will continue for at least another month – and possibly until the start of the next presidency in 2021.
That can be a dangerous delay.
Already, many furloughs are turning into permanent job losses, and big companies like Disney and StLustet are starting new rounds of layoffs. The hotel industry is warning thousands of shutdowns, and thousands of small businesses are weighing whether to close in on the good. An estimated one in seven U.S. small businesses closed permanently by the end of August – 50,000,000 in all – according to data from marketing platform Vamplay. The deeper the wound, the longer the economy will heal.
“The risk of waiting is that if we find ourselves in a place where we’re unable to turn back, we’ll hit a tipping point,” said Karen Diana, an economist at the Harvard and Treasury Department, during the Obama administration.
Federal Reserve Chairman Jerome H. Powell echoed those concerns in a speech Tuesday, arguing that failing to act quickly carries risks to the economy.
“Too little assistance will lead to poor recovery, which will also create unnecessary hassle for homes and businesses,” he said. “Over time, domestic bankruptcy and business bankruptcy will increase, hurting the productive capacity of the economy and holding back wage growth.”
Failure to meet that aid will cripple the economy.
“The economy needs a second phase of financial support with the help of homes, small and medium-sized companies and states,” said R. Glenn Hubbard, an economist at Columbia University who is chairman of the White House Council of Economic Advisers under President George W. Bush. “Failure to act will have real economic consequences.”
Following Mr. Trump’s announcement, the stock index, which has risen in recent days on signs that negotiations could move forward, and several major major street banks have said in recent days that they will lower their growth forecasts if talks stop.
Mr. Trump will be listening. In a series of tweets late Tuesday night, he urged both houses of Congress “Soon” To revive the delayed loan program for small businesses and for funding for airlines and second round approval Checks the arousal. It remains unclear if his tweets reflect a desire to resume talks.
Gridlock in Washington Washington is a change from the spring, when Congress will vote by a majority to provide millions of dollars in housing and industry for fear of an imminent economic collapse. The effort was largely successful: households began to spend again, companies began to bring in workers, and the tide of forecasting for evacuation and closure largely failed to materialize. The unemployment rate, which rose to about 15 percent in April, fell to 7.9 percent in September.
But most of the support programs have run out over the summer period, and economic benefits have waned in recent weeks. Economists across the ideological spectrum agree that the momentum loss is likely to worsen if more aid does not come soon.
“We had a bridge that took us until about September, and now the question is whether we will complete the bridge or not?” Former Chief Economist of the International Monetary Fund Raghuram G. Rajan, who is now a professor at the University of Chicago, said. Without further ado, he said, “Basically whatever was on that bridge falls off the cliff.”
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European stocks remained lower on Wednesday as investors embraced the news that US monetary stimulus would not be possible anytime soon. But Wall Street futures turned upwards, indicating that stocks will rise when trading begins, after President Trump tweeted overnight that he wanted to revive some stimulus measures. Asian markets changed little.
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The move sharply reversed in financial markets on Tuesday after Mr. Trump unexpectedly announced the end of negotiations with Democrats over a new economic aid package. Mr. Trump later appeared on the backtrack and said on Twitter that he would be willing to allow more stimulus checks and spending on programs for airlines and small businesses.
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The Stocks Europe 600 index is down 0.1 percent. U.S. Treasury bonds fell, with the 10-year yield rising 0.03 percent as some traders moved away from safe havens. The dollar rate changed slightly.
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“We’re back in the familiar gridlock area,” said Suzanne Streiter, an analyst at Hargreaves Lansdowne. “There is little doubt that the surprise plan will eventually be obtained by the Senate, but if we are getting closer to the vote, it is more likely to be signed before the election. It will touch a lot and go especially for airlines. ”
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Shares of the airlines rose in premarket trading after the uproar on Tuesday. American Airlines, Delta Air Lines And United Airlines More than 3 percent of all.
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On Tuesday, the S&P 500 erased its gains and ended 1.4 percent lower after Mr. Trump’s announcement on Twitter. Shares of retailers fell. Federal Reserve Chairman, Jerome H. The announcement sparked outrage in other markets just hours after Powell called on lawmakers to do more.
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Mr. Powell and other economists have been warning for some time that sustained economic recovery is dependent on Washington’s higher spending, and investors have recently begun to grow optimistic that Speaker Nancy Pancy Lossi and Treasury Secretary Steven Munuchin will resume discussions after a debate. Had given. Potential agreement.
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The focus on potential stimulus plans has only intensified as more companies have said they will quit or retire, and the number of coronavirus cases has risen again.
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Investors will find the key to what the Fed does next in minutes at the central bank’s September policy meeting, to be released on Wednesday.
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These concerns are not specific to the United States. On Tuesday, the chief economist of the European Central Bank warned that the eurozone would probably not recover from the epidemic by 2022 and that tourism-dependent countries would suffer the most as infection rates rise again. The assessment reinforces expectations that the European Central Bank will take additional steps to stimulate the eurozone economy when its governing council meets on October 29.
Amazon Sets the rules for digital commerce, and Apple Favors its own apps and services on its devices. Facebook Has a monopoly power “firmly involved” on social networking. Google It retains its search dominance by stealing third party information without permission to modify search results.
Some of the findings in a successful report by House legislators accuse the world’s four largest tech companies of abusing their market power. The document, released Tuesday, completes a 15-month investigation.
Read more about our coverage of the report:
House lawmakers condemned Big Tech’s ‘monopoly power’
In the House 44ic-page report, which was presented by the Democratic leadership of the House Judiciary Committee, lawmakers said the four companies have turned from the “screaming” start to the kind of monopoly we’ve seen in the era of “oil barons and railroad tycoons.” That companies abused their influential positions, setting prices and rules for commerce, search, advertising, social networking and publishing, and often giving rules.
To improve inequality, legislators recommended restoring competition by effectively dismantling companies, bringing concentration to the police markets, and encouraging agencies to create barriers for companies to acquire start-ups. They also proposed amendments to the antitrust law in the largest possible shift since the Hart-Scott-Rodino Act of 1976 created strong reviews of major mergers.
12 Allegations in Deming Report on Amazon, Apple Pal, Facebook and Google
Amazon Cut out sales and product data from its market to see hot-selling items, copy them and offer its own competitive products, especially at lower prices.
Apple The results use its control over the store to punish competitors, including low ranking them in search results, banning how they communicate with customers and removing them from the store altogether.
Facebook Has grown so overwhelming that internal findings suggest that its biggest competition is within itself.
Google Maintains a monopoly on search results by capturing information from third parties without permission.
The Department of Defense last month honored a handful of unpredictable and inexperienced companies with multimillion-dollar contracts to produce disposable medical gowns to protect workers on the front lines of the coronavirus epidemic.
Now those companies are working to produce millions upon millions of gowns in a matter of months.
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One deal, for 32 3,323 million, was a small business run by JL Kaya, a Florida warehouse, whose previous federal contracting work was a માટે 7,296 project to build a gauze.
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The company, founded six months ago by a former Trump administration official, went on a બે 194 million contract in Health Supply U.S.
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And the 88 88 million contract for the gown went to Maddox Defense, which says it has done government sub-control work but has never been able to manage its own big deal.
Questions have been raised in Washington about the administration’s selection of inexperienced companies for critical jobs. In phone calls and letters, trade groups for major textile manufacturers have filed a complaint with the Defense Logistics Agency. And at least one company has filed a complaint about a gown agreement with the Government Accountability Office, a watchdog agency investigating federal spending.
