President Trump tests positive for COVID-19; stimulus package at standstill as economic data disappoints

Oct 6, 2020

Early Friday President Trump announced that both he and the First Lady had tested positive for COVID-19, adding to an already uncertain political environment. The president is reported to be experiencing mild symptoms and Chief of Staff Mark Meadows told reporters that Trump “will remain on the job.” The US$2.2 trillion stimulus bill passed the House with no Republican support and remained on life support as Speaker Nancy Pelosi negotiates with Treasury Secretary Steven Mnuchin to determine where to go next.

With stimulus payments in the U.S. coming to an end in late July, August personal income data showed personal income fell 2.7% month-over-month. The drop in unemployment benefit payments outpaced an increase in wages, which rose 1.3% month-over-month in August matching the July increase. Total personal spending increased 1.0% month-over-month, and the fall personal income is expected to weigh on growth until Congress agrees on a stimulus extension.

The U.S. added 661,000 jobs in September falling short of expectations. The weakness in job growth was partly due to a drop in government education employment as the new school year has shifted online. The continued slowing in job growth indicates the economic recovery is entering a weaker phase than the summer. Lastly, the ISM manufacturing survey dropped to 55.4 in September from 56.0 in August, which was at odds with the improvement in most of the regional surveys.

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