Jul 2, 2020 - Economy

Stimulus outlook takes a hit even as coronavirus cases skyrocket

Data: Bureau of Labor Statistics; Chart: Axios Visuals
Data: Bureau of Labor Statistics; Chart: Axios Visuals

The pandemic is getting worse, and the question is whether the economic recovery will go with it.

Why it matters: America adding 7.5 million jobs over the last two months pales in comparison to 20+ million lost over the two months prior.

  • Those new jobs were also overwhelmingly people returning to places where they had been temporarily laid off, Axios' Felix Salmon writes.
  • The number of permanent job losers went up, not down, rising 25% in just one month to 2.8 million from 2.2 million.

Between the lines: One nightmare scenario is that the economy recovers just quickly enough to kill political interest in economic stimulus, while not quickly enough to bring relief to the millions of Americans.

  • The big jobs number could suck the wind out of a big stimulus package in the Senate, Axios' Hans Nichols reports.
  • White House adviser Larry Kudlow hinted at that this morning, saying the beefed-up unemployment benefits may no longer be needed.
  • Senate Majority Leader McConnell is still slow-walking, and even though Trump talked up big spending and direct payments in his Fox Business interview yesterday, watch Senate Republicans to see if there's any appetite for a big bill. 

The bottom line: America will likely struggle to recover economically until it manages to beat back the public health threat.

  • The official overseeing the nation's coronavirus testing efforts told Congress on Thursday that the U.S. is "not flattening the curve right now."

Go deeper: "Axios Re:Cap" dug into the jobs picture with the Washington Post's Catherine Rampell. Listen here.

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