Both chambers of Congress have left for their August recesses and are not expected to return until September unless they strike a COVID-19 relief deal.
Negotiations between Democratic leaders and White House officials collapsed last week, with both sides blaming each other for making little progress on the much-needed relief package.
In an attempt to circumvent Congress, Trump last Saturday signed a series of executive orders to extend certain COVID-19 economic relief, but they are unlikely to provide a meaningful boost to the overall economy.
"A closer look at these orders suggests they will have at best marginal economic benefits even if fully implemented, which is questionable given the legality of the orders and the likely court challenges," Mark Zandi, chief economist of Moody's Analytics, wrote in an analysis earlier this week.
Zandi estimated that these orders could provide just over US $400 billion in total relief, but the US economy needs a fiscal aid package costing at least US $1.5 trillion to avoid falling back into recession, based on simulations of Moody's macroeconomic model.
After rebounding strongly in May and June, US economic activity has begun to slow since July as some states have paused their reopening plans or re-imposed restrictions on some activities due to the resurgence of COVID-19 cases.
"The resurgence in COVID-19 cases and subsequent pullback in activity have already begun. Delays to aid by Congress will exacerbate the slowdown in August," said Diane Swonk, chief economist at Grant Thornton, a major accounting firm.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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