It seems highly unlikely that the US economy will be able to recover until next year. The coronavirus cases are increasing again, and Congress is in stalemate on a new financial rescue package to stimulate the economy.
Moody’s Analytics has developed an index to measure the performance of the economy in comparison to its performance before the pandemic. It’s called the ‘Back-to-Normal’ Index (BNI).
It consists of numerous economic statistics provided by the government and third-party sources. Presently, the index score is a little over 80%. The interpretation for this score is that as compared to the beginning of the pandemic in March, economic activity is now below 20% of that level.
This index also shows that the economy is recovering at a dwindling pace because in June the score was at 75%, which means it has not improved as quickly. The rising coronavirus cases have played a major role in the slowing recovery of the economy.
The crisis that resulted from the pandemic has a direct relationship with the economic crisis. As the number of cases continues to rise, the economy becomes weaker.
According to CNN Business, the spike in cases has also led to an increase in unemployment rates and lesser jobs. There has not been much difference between states that did not shut down businesses and states that did.
A common misconception is that the recession was a result of the lockdown and businesses being shut down. However, that is not the case because businesses were forced to limit their activities due to the pandemic whether a lockdown had been imposed or not.
Even though In Europe they had managed to decrease the coronavirus cases by imposing strict lockdowns, their economy is weakening again. This is because of the second wave of coronavirus cases.
The biggest problem that the country is facing right now is Congress delaying the release of another stimulus package to aid the people who are struggling because of the pandemic as well as to stimulate the economy.
The already weak economy will be severely affected without fiscal support from the government. However, it seems that the American citizens will not be receiving any such aid until after the elections are over and the President and Congress take office.