America’s economic rebound is about to get a lot tougher after an initial series of gains from the depths of the pandemic, Bloomberg News reported. Applications for regular state unemployment benefits continue to number more than 800,000 each week and chances in Congress diminished for additional support for the jobless and businesses on Thursday. What’s more, funding for the temporary supplemental jobless benefit payments authorized by President Donald Trump in early August is running out. Applications for jobless benefits continue to number in the hundreds of thousands. With the help of fiscal stimulus -- from aid for small businesses to an extra $600 a week in jobless benefits -- the U.S. economy has rebounded faster than many economists expected. Sustaining a robust pace, however, could prove challenging given the elevated unemployment rate, absence of additional government support and persistent spread of the coronavirus. The recovery right now is “fragile, and barring additional stimulus, the recovery will be more susceptible to downside risks,” said Gregory Daco, chief U.S. economist at Oxford Economics. “There’s no doubt that the full expiry of the unemployment benefits will weigh on household income and in turn deter consumer spending.” Matthew Luzzetti, chief U.S. economist at Deutsche Bank AG, said consumer spending could recede over the coming months without help from Congress. Aneta Markowska, chief U.S. financial economist at Jefferies, expects the pinch to be felt in October, with “significant risk” of softer data just a month before the election if there is no additional stimulus.
