Tags: moody’s | zandi | economy | virus | pandemic

Moody's Zandi: 'Pretty High' Risks of Economy Backtracking as Virus Surges

By    |   Friday, 06 November 2020 08:52 AM

Mark Zandi, chief economist of Moody’s Analytics, warns that the U.S. economy could backtrack given the intensifying spread of COVID-19 and the lack of additional fiscal stimulus support.

“I think the risks are pretty high here that the economy backtracks,” he told CNBC.

“We are suffering a very significant reintensification of the virus. I mean 40,000 daily confirmed infections four, six, eight weeks ago and we’re now close to 100,000 — that’s going to start doing some damage,” he said

Zandi said a likely “split government” in the U.S. means a “big fiscal rescue package” would not happen.

“And then we have no additional fiscal support, at least not on the near-term horizon, at least not until … the presidential inauguration in January, in all likelihood. So that leaves the economy pretty vulnerable here,” said Zandi.

Meanwhile, official U.S. government data seem to support that the economy isn't running at full force.

Fresh signs the U.S. economic recovery may be faltering surfaced over the last week with high-frequency measures of retail traffic and jobs both ebbing amid a record-breaking surge in coronavirus cases, Reuters reported.

Millions of formerly employed Americans remain sidelined by the recession triggered by the virus, and uncertainty over the future direction of the country - politically and economically - remains especially high in the shadow of this week's still-unsettled U.S. presidential election.

The Federal Reserve kept its loose monetary policy intact on Thursday and pledged again to do whatever it can in coming months to sustain a U.S. economic recovery threatened by the spreading coronavirus pandemic.

Elsewhere, U.S. employers hired the fewest workers in five months in October, offering the clearest evidence yet that the end of fiscal stimulus and exploding new COVID-19 infections were sapping momentum from the economic recovery.

Nonfarm payrolls increased by 638,000 jobs last month after rising by 672,000 in September, the Labor Department said in its closely watched employment report on Friday. That was the smallest gain since the jobs recovery started in May and left employment still well below its peak in February.

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Mark Zandi, chief economist of Moody’s Analytics, warns that the U.S. economy could backtrack given the intensifying spread of COVID-19 and the lack of additional fiscal stimulus support.
moody’s, zandi, economy, virus, pandemic
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2020-52-06
Friday, 06 November 2020 08:52 AM
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