Viral surge, fiscal fight may sway U.S. voters more than data


FILE PHOTO: A combination picture shows U.S. President Donald Trump and Democratic presidential nominee Joe Biden speaking during the first 2020 presidential campaign debate, held on the campus of the Cleveland Clinic at Case Western Reserve University in Cleveland, Ohio, U.S., September 29, 2020. REUTERS/Brian Snyder

(Reuters) - A surge in COVID-19 cases in a number of U.S. states and roller-coaster prospects for new pandemic aid from Congress are threatening to push the importance of traditional economic data to the back burner for voters in the Nov. 3 election.

Overall, likely voters continue to say they have more confidence in U.S. President Donald Trump's ability to create jobs than Democratic challenger Joe Biden.

But the former U.S. vice president leads in voters' assessments of each candidate's ability to deal with the pandemic, and he also has the edge in the presidential race, according to the most recent Reuters/Ipsos poll https://polling.reuters.com/topic/2020-election.

Trump, who spent three days in a military hospital after being diagnosed with COVID-19 last week, called off talks this week between the White House and U.S. House of Representatives Democratic Speaker Nancy Pelosi on a new fiscal stimulus package.

The president, who is seeking reelection in the Nov. 3 vote, has partially reversed that stance, saying he would support piecemeal legislation to provide funding for small businesses and airlines and stimulus checks for individuals. On Thursday, he said the negotiations had restarted.

Trump's fellow Republicans in Congress have resisted new aid, in part out of concern over adding to the federal government's soaring debt. Pelosi, who has led Democrats' push for a broad package that includes help for state and local governments and out-of-work Americans, signaled on Thursday that an agreement was not close.

Failure to pass additional government stimulus would slow the economic recovery and hit low-income families and communities of color particularly hard, Federal Reserve Chair Jerome Powell and several of his colleagues warned this week.

In this "broken-crockery view, if you run the economy subpar for too long, bad things happen, and potential output is impaired," said Vincent Reinhart, a former Fed economist who is now the chief economist at Mellon.

One bright spot this week in the economic data was a report showing the U.S. services sector grew faster than expected in September.

But the number of Americans relying on some form of unemployment insurance remained stuck above 25 million in the week ended Sept. 19, and the number of people filing new jobless benefits claims remained elevated for the week ended Oct. 3.

Graphic: Jobless claims still elevated - https://graphics.reuters.com/USA-ELECTION/ECONOMY-JOBLESS/azgponxegvd/chart.png

An even bigger factor for voters may be the surge in COVID-19 infections in Wisconsin and a recent increase in Michigan, two key battleground states in the presidential election. Nationwide, infections continue to rise, data collected by Johns Hopkins University shows.

The disease caused by the novel coronavirus has killed more than 211,000 people in the United States, according to a Reuters tally.

"It remains our forecast that the pace of the economic rebound will continue to slow while the virus remains a threat and in the absence of additional fiscal stimulus," JP Morgan economist Jesse Edgerton wrote in a note on Thursday.

Economists at several Wall Street banks forecast some kind of stimulus package no matter which candidate wins, but say a Biden presidency, if Democrats also retake control of the U.S. Senate, would likely result in a bigger one.

In the meantime, Edgerton noted, "we suspect that consumers and businesses would largely muddle through if the recent upswing in virus cases continues, as they did during the summer."

(Reporting by Ann Saphir; Editing by Paul Simao)

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 18
Cxense type: free
User access status: 3
   

Did you find this article insightful?

Yes
No

75% readers found this article insightful

Next In World

Polish doctors fear high rate of positive COVID tests show pandemic worse than it appears
EMA starts rolling review of J&J's COVID-19 vaccine candidate
Analysis: Could COVID knock out flu in Europe this winter?
Sweden registers 17,629 new COVID-19 cases since Friday
Two killed by car in pedestrian zone in German town
From hate speech to nudity, Facebook's oversight board picks its first cases
After 4.2 million COVID-19 cases in November, U.S. pins hope on vaccine
Historic Liberia war crimes trial to open in Switzerland
Special Report: U.S. air monitors routinely miss pollution - even refinery explosions
Bosnia's 'Oxygen Man' brings cheer, and supplies, to COVID-19 patients

Stories You'll Enjoy