US economic forecasts grim amid escalating COVID-19

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By PYMNTS

Fears of economic freefall are mounting as the US continues to post an alarming increase in the number of new COVID-19 cases without word of any additional government stimulus, according to a report in The Financial Times (FT) on Monday, November 16.

The accelerating cases are triggering further reductions in business operating hours and new commercial lockdowns, yet there has not been news of additional financial assistance from the federal government.

Congress and the Trump Administration were unable to reach a decision on what type and how much aid should be extended to businesses and the public during this second wave of the pandemic.

“From a health perspective and as a result from an economic perspective we’re really not in a good place, there’s really no way to sugarcoat it. We have essentially a fairly long winter ahead of us,” Gregory Daco, chief US economist at Oxford Economics, told FT.

“The vaccine news, the pent-up savings, the possibility of coming back to a new normal in six months’ time are all very encouraging, and a source of optimism, but they do nothing for us today,” Daco added.

November coronavirus cases in the US exceeded 1 million so far and some areas of the country are facing severe burdens on healthcare resources.

US president-elect Joe Biden and vice president-elect Kamala Harris are scheduled to address the nation on Monday, November 16 regarding the country’s economy, according to a statement from the transition team, per FT.

Last month’s economic recovery forecasts pointed to continued cause for concern, Shimon Steinmetz, chief financial officer at Merchant e-Solutions, said in a PYMNTS interview. But housing sales and mortgage applications are up, a positive sign as new virus cases soar.

Steinmetz also said that he believes that once a COVID-19 vaccine becomes widely available, people will go back to their old habits.

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