The novel coronavirus has affected many economies around the world, and the U.S is no exception.
Just when things were about to get stable, the second wave of COVID-19 is concerning many economists about the country’s financial future. Many countries, including the UK, have already announced another lockdown. With a rapid increase in the number of cases, experts are recommending another lockdown which is bad news for the economy.
In the third quarter, the US was able to show some economic stability with a record of a 30% surplus. After the first lockdown got lifted, the manufacturers started mass production, and the opening of offices showed a silver lining. Moreover, the economy showed signs of betterment when families and businesses got aid from the government.
However, with the news of rampant growth in the cases, analysts fear that the next three months are crucial for America’s economy. According to them, another economic downturn is around the corner.
Many big employers like Disney and American Airlines have started cutting off jobs. They have also declared that if they don’t get aid anymore, they won’t be left with any other option than laying off their employees to sustain the losses.
During the first phase of the lockdown, around 2.6 million people lost their jobs already, and if the same thing happens again, then consumer spending will have devastating effects. It will simultaneously affect the economy as well.
According to the chief economist of Bank of the West, Scott Anderson, if the unemployment rate rise again, people won’t be able to spend, and this can cause significant stress on the economy. Household spending covers around 70% of the US economy according to the scorecards.
Fearing another dip in the economy, many economists are urging the government to pass another relief package worth multi-trillion dollars. To escape from the harsh times of facing double-dip-recession.
Moreover, due to the elections of 2020, many things are unclear and are at stake. The results will also affect the economy. Due to so many things happening simultaneously, both the Democrats and the Republicans are biting their fingers to come up with a stable plan to restore the losses and bring back economic stability.