The shape of the recovery: A swoosh not a V. The Congressional Budget Office figures the economy won’t return to pre-recession levels at least throu
The shape of the recovery: A swoosh not a V. The Congressional Budget Office figures the economy won’t return to pre-recession levels at least through 2021. While the economy will hit bottom in the second quarter of this year, recovery will take years. By the fourth quarter of 2021, CBO figures the unemployment rate still will be 8.6 percent, and real economic output will be 1.6 percent lower than it was at the end of 2019. White House officials, however, continue to insist, at least publicly, that the economy will recover by Fall.
Fed Chair and Treasury Secretary disagree too. In a Senate Banking Committee hearing yesterday both warned that the US economy could suffer profound long-term damage because of the pandemic, but did not agree on how to repair it. Treasury Secretary Steven Mnuchin wants to reopen businesses and put Americans back to work with adequate protections. But Federal Reserve Chairman Jerome Powell suggested that people still might not shop or work without “pretty good confidence that it’s safe to go out.” As a result, he said, Congress may have to enact more fiscal relief while Mnuchin wants to “wait and see” if the country needs another stimulus bill. Mnuchin did promise to quickly distribute nearly $500 billion in already-enacted business assistance.
Will Treasury require companies to retain workers if they accept an emergency stabilization…