US set to halt select COVID-19 relief measures
The US will likely halt the provision of multiple COVID-19 relief measures to its eligible citizenry today.
Although the most severe recession in US history continues to test the resiliency of American firms, several federal and private sector programs intended to combat the pandemic’s ballooning fallout—including eviction reprieve, cash for smaller firms and the disbursement of $600-per-week in federal unemployment benefits under the $1.8 trillion CARES Act—are soon set to expire.
A new round of jobless programs, while possible, will likely be precluded by congressional gridlock. While Democrats have pushed to extend the $600-per-week benefit through January 2021, Republicans have called for a reduction to $200. The prospects for a quick deal have been further diminished by President Donald Trump’s dismissive rhetoric vis-à-vis a comprehensive recovery package, which has communicated his clear preference for narrower measures.
A COVID-19 safety net will likely be resurrected in the short-term, albeit in a significantly reduced capacity. A surprising rebound of 2.5 million net jobs in May has done little to dent the record 22 million layoffs recorded in March and April. Expect August data to reflect a marked increase in evictions and insolvencies due to the impending lapse in relief, which could severely constrain the national recovery timeline. While a decent economic recovery is expected in the short-term, unemployment will likely linger near 10% for the remainder of the calendar year.
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