The US economy shows weak recovery rates. After a long wait the decision of Congress on additional payments for Americans who lost their jobs because of the pandemic, trump issued a decree on aid through a Foundation under the Ministry of internal security.
On Monday the major stock indexes of USA responded ambiguously to order by President Donald trump on Saturday, on the extension of additional payments to Americans who lost their jobs.
The Dow Jones Industrial Average and the S&P 500 showed a slight increase before the opening of trading on Monday, while the Nasdaq Composite and NASDAQ 100 declined slightly.
The stocks ended subdued as investors receive signals about the weak pace of recovery in the US economy on the background of the high incidence of COVID-19 and high unemployment in the country.
White house adviser on issues of the pandemic, Dr. Anthony Fauci said that “the United States is affected by the pandemic is worse than anyone”, while several States continue to cause concern with their rate of incidence.
On the positive side, officials noted a lower mortality due to improved treatment protocols and a higher level of morbidity among young people, the best performing recovery.
Donald trump continued to insist that the state government followed the path of withdrawal or relief of quarantine measures to restore jobs and the economy, saying that isolation will do more harm than good.
Trump said that now the United States should focus on security of older Americans, sending people back to work and school.
Data from the U.S. Department of labor last week showed that the unemployment rate fell to 10.2 percent in July 2020, to 11.1 percent in June, which also surpassed a bit more pessimistic economists ‘ expectations at 10.5%, because many businesses continued to open and re-hire employees after quarantine COVID-19.
Although last week the number of unemployed declined by 1.4 million, it still represents a very high figure 16.3 million, while economists note that the actual numbers may be even greater.
State aid to the Americans, help the US economy
Following the statements of the Federal reserve, the most anticipated last week was the decision of the Congress on the extension of additional unemployment benefits.
In late July, the fed made the decision to maintain zero rates likely until 2022, while continuing to provide mechanisms for affordable credit, doing everything to support the US economy in difficult conditions.
At the same time, consumer spending, which accounts for about two-thirds of the economy, are low because of the cessation at the end of July of the terms of additional unemployment benefits of $600 a week.
The question of the extension or cancellation of these payments has caused a lengthy debate in Congress. Democratic leaders said they want to preserve these benefits in the amount of $600, at least until the end of the year. Republicans opposed, claiming that the payments are so high that may provoke some unemployed Americans to completely abandon the job search.
Technically, Donald trump does not have the legal authority to manage the expenditure of Federal funds, under the Constitution, this function is assigned to Congress, not the President. However, on Saturday the Turkish foreign Ministry announced the allocation of nearly $45 million to Finance additional weekly unemployment benefits through the relief Fund for natural disasters of the Ministry of internal security.
The trump “called on” state governments to use their allocations from the Fund in connection with the pandemic is to cover the remaining costs for weekly unemployment benefits of $400 for Americans who lost their jobs because of the pandemic.
Trump also signed on Saturday three more Executive act, including tax holidays on salaries for Americans who earn less than $100 thousand per year, as well as the extension of the moratorium on evictions, expired July 25, and the extension of the grace period on monthly payments and interest on student loans.
These orders cover the program, which requires that the States has contributed to benefits, however it can take time, as several States are experiencing financial difficulties as a result of the pandemic.
According to reports, lawmakers from both chambers continue to negotiate for additional stimulus aid.
Aneta of Markowska, chief financial economist at Jefferies noted that “there remains a risk of deterioration of the economic situation in August.”
However Markowska added that “any “weakness” this will be short-lived. By September the next round of budget support will create positive momentum. The re-opening of schools, even if only in some States, will strengthen the positive momentum by increasing the number of purchases, the return of children to school, and the possibility of a larger number of parents to return to work in September.”
Last week, overall, was marked by the growth among the indexes: the Dow Jones rose by 3.8%, the biggest weekly gain since June, the S&P 500 along with the Nasdaq Composite rose 2.5%.
The top gainers last week were Facebook (FB), Apple (APPL) and Microsoft (MSFT) c an increase of more than 3%.