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US economy facing deepest crisis since Great Depression

US economy facing deepest crisis since Great Depression

Aug 08, 2020

Washington [US], August 8 (ANI): As the coronavirus cases continue to surge in the US, the economy is facing its deepest crisis since the Great Depression.
Citing a report by Pew Research, The Washington Post reported that the US citizens are growing more pessimistic about how their leaders have handled the virus and the nation's ability to contain it, which only digs a deeper hole for the economy.
The constant fear of virus resurgence has led to the business owners not opening their establishments. They fear that customers will not return if the establishments are opened or they will have to shut down again amid the surge in COVID-19 cases.
While the bulk of the federal government aid for small businesses and unemployed has expired, Congress and President Trump have been unable to come to a deal on more relief, thus, adding to the uncertainty.
Economists believe that there is a heightened risk of backsliding.
"Households and businesses are really fragile right now. This is not a recovery that we should be confident in," Wendy Edelberg, director of the Hamilton Project at the Brookings Institution and former head of the commission that investigated into the 2008 financial crisis, was quoted as saying.
"Government policy is not making it better right now. The policy is exacerbating uncertainty."
The Washington Post reported that business investment fell to the lowest level in 68 years this spring and consumer spending has stalled in recent weeks.
"I've been calling this the 'lost year'...There are always business cycles, but this is unnatural. We just don't know what is going to happen," Gayle Brock, a small manufacturer outside Las Vegas, Nevada, was quoted as saying.
The Washington Post reported that the Trump Administration on Friday celebrated news of another 1.8 million jobs returning in July, but it was the weakest rebound so far. Nearly 60 per cent of jobs that were lost amid the COVID-19 pandemic have not returned.
Currently, the US has reportedly only 5.4 million job openings, which is not nearly enough for the more than 30 million currently receiving unemployment benefits.
"If we don't get something reasonable out of Washington quickly, this is going to get even worse. As the economy loses momentum, we're setting ourselves up for an even more vulnerable position economically, especially if there is a second wave," Scott Minerd, global chief investment officer at Guggenheim Investments, was quoted as saying.
Despite facing such a slump in the economy, Larry Kudlow, Trump's top economic aide, has reiterated that this will be a quick "V-shaped" recovery.
"This is a self-sustaining recovery and the job numbers are stronger than anyone thought possible," Kudlow was quoted as saying to the Fox Business. (ANI)