Consumer spending, manufacturing and business investment are still far below pre-pandemic levels. Brendan Smialowski/AFP via Getty Images

Powell to give Congress another economic assessment

Mitchell Hartman Jun 17, 2020
Consumer spending, manufacturing and business investment are still far below pre-pandemic levels. Brendan Smialowski/AFP via Getty Images

Federal Reserve Chair Jerome Powell will be speaking about the “pandemic economy” with Congress again today.

On Tuesday, he told the Senate Banking Committee there are some signs of stabilization in the economy, and he reiterated the Fed’s intention to keep monetary policy as helpful as possible to aid the recovery.

But, he also said the decline in second-quarter economic growth will be the “most severe on record.” And he warned of long-term risks, from high unemployment to a rising wealth gap.

So, how’s this economy actually doing right now?

Retail sales are up more than 17%. Small businesses and consumer confidence is up strongly heading into summer.

“A lot of the recent headlines have made it seem like things are really good,” said economist Matt Speakman at Zillow.

Speakman said the economy is starting to turn around, after the historic declines of March and April.

“But, in reality, we have a long way to go,” he said.

Consumer spending, manufacturing and business investment are far below pre-pandemic levels. Unemployment is still higher than any time since the Great Depression.

And Mark Zandi at Moody’s Analytics said consumers and business owners still need help.

“If policymakers — Congress and the administration — can’t come up with another fiscal rescue package pretty soon, at least by their August recess, I don’t think the economy will continue to perform well, recession risks will rise,” Zandi said.

Powell has warned of other risks: the continued spread of COVID-19 infections and a surge in business bankruptcies.

COVID-19 Economy FAQs

What are the details of President Joe Biden’s coronavirus relief plan?

The $1.9 trillion plan would aim to speed up the vaccine rollout and provide financial help to individuals, states and local governments and businesses. Called the “American Rescue Plan,” the legislative proposal would meet Biden’s goal of administering 100 million vaccines by the 100th day of his administration, while advancing his objective of reopening most schools by the spring. It would also include $1,400 checks for most Americans. Get the rest of the specifics here.

What kind of help can small businesses get right now?

A new round of Paycheck Protection Program loans recently became available for pandemic-ravaged businesses. These loans don’t have to be paid back if rules are met. Right now, loans are open for first-time applicants. And the application has to go through community banking organizations — no big banks, for now, at least. This rollout is designed to help business owners who couldn’t get a PPP loan before.

What does the hiring situation in the U.S. look like as we enter the new year?

New data on job openings and postings provide a glimpse of what to expect in the job market in the coming weeks and months. This time of year typically sees a spike in hiring and job-search activity, says Jill Chapman with Insperity, a recruiting services firm. But that kind of optimistic planning for the future isn’t really the vibe these days. Job postings have been lagging on the job search site Indeed. Listings were down about 11% in December compared to a year earlier.

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