Vaccine trials by Pfizer, AstraZeneca, and Moderna have highly encouraged many. The numbers of the great surge of infections are threatening to overwhelm hospitals. This has promoted and triggered new measures for a lockdown. For businesses staring at a lockdown is not good. All these measures slow down economic growth. This is a worrying signal on the recovery of the fragile economy. It could backtrack for months or slow the recovery, Moody’s said.
The hospitals are quickly filling up with the daily rise of cases. It is very difficult for the economy not to be affected. With the current surge of infections that might overwhelm hospitals, close to 1.3 million people might lose their jobs. The next few months are critical in the employment sector. The US now has more than 5 million infections and more than quarter a million deaths.
Retail sales have done more than expected. This is because of the fact that during this pandemic, the businesses have relatively recovered well. The limited physical activities due to cold weather are another negative factor. These cause a further negative impact on the economy. They might also hurt short-term prospects for the business. Economic recovery might backtrack if federal reserves and lawmakers don’t provide relief. In Zandi’s assumptions, Congress and Biden administration might sign $1.5 trillion. This money is going to be a stimulus package for the economy by February.
At least 25 million people will be vaccinated before Mother’s day. This is based on a positive forecast by Moody’s. In the first quarter, widespread inoculation might happen.
He concluded that a double-dip recession must be avoided. This gives a better chance for economic recovery by late spring. Medical experts have warned of a second wave of coronavirus from the start of the pandemic. This is now a great threat that could hinder economic recovery. Many people are likely to face unemployment due to the strained economy. New coronavirus cases have jumped to 193000 daily.
Despite positive expectations due to expected vaccine, experts warn that there may be a difficult time in winter. There will be gatherings, parties and celebrations during the holiday. This is likely to keep the coronavirus cases going up.
Moody estimates that Americans will have a rental debt of $70 billion by January. This is in the event that the lawmakers don’t come up with a solution to this problem. Moody’s notes $1.4 trillion student loans government-backed expires on 31 December.
The rate of unemployment in October was 6.9%. This is slightly lower than in April that was 15%. However, at the same time, it is below the 4.7% average that has been recommended by the United Nations. Last month there were 11.1 million unemployed people in the United States.
Lawmakers must pass the budget by 11th December. The passing of the legislation will be critical to avoid a government shutdown while in the lame-duck session. Such a shutdown has happened in almost all administrations within the last 5 presidents of the United States.