The American economic recovery from the far-reaching impacts of COVID-19 is underway. Yet some states may be forced to adjust their reopening efforts as cases surged toward this week’s end. States like Arizona, Texas and Florida saw shocking increases in new cases, further complicating economic expansions.After an unprecedented domestic and global economic contraction from March to April, citizens and governments alike share a common goal - limiting the financial impacts of the pandemic.
The pandemic has affected all facets of GDP growth - from hiring and capital investment decisions to consumer demand and household disposable income. As states have clawed back restrictions on non-essential business openings and operations in recent weeks, the surge in new cases will force some municipal governments to reimpose original restrictions, or at the very least, adjust their timelines for phased economic reopenings. The Bureau of Labor Statistics’ June jobs report was released on July 2, offering some insight into labor market conditions as the pandemic stretches on. The jobless rate fell to 11.1% in June, as close to 5 million jobs were added in the U.S. A large increase in leisure and hospitality jobs accounted for 2.1 million of the new jobs added, around 40% of the total non-farm jobs added last month. Yet with accelerating new cases in southern states, the leisure industry is at greatest risk for a second round of layoffs and furloughs. Retail and education also tallied large employment increases, adding 740,000 and 568,000 jobs respectively.
It must be taken into account that despite positive jobs numbers calculated by the BLS, the extent of small businesses and local chains permanently closing has a dramatic effect on the American recovery. President Trump on July 4 signed into law a temporary extension to the Paycheck Protection Program - a small-business subsidy effort aimed at easing the financial burdens of small businesses particularly affected by COVID-19. The deadline of June 30 for subsidy applications was extended to August 8. About 4.9 million small businesses have received forgivable loans under the PPP, totalling more than half a trillion dollars, according to the Small Business Administration. The Trump administration also agreed to release the names of borrowers receiving more than $150,000 through the subsidy program. The list of names will further be sent to congressional oversight committees as well as the Government Accountability Office (GAO). Individual loan amounts will not be disclosed, merely, borrowers will be categorized into buckets of five tiers of loans amounts under which they were approved.
As the COVID-19 pandemic continues to wreak economic damage on all aspects of the US economy, the federal government along with the Federal Reserve remain flexible in adjusting and implementing fiscal and monetary policy measures to stabilize as much of the economy as they can.