Troubles in businesses due to the ongoing decline caused by the virus and the withdrawal of support measures are expected to slow recruitment in the coming months after the 1.4 million increase in August. As the unemployment situation persisted, about 21 states reimbursed additional unemployment payments to help the jobless.
In terms of the labor market, small businesses are having trouble returning to the game, and withdrawal of public packages did not seem to hasten their return to work as expected. Because, there are business-based problems for small companies with a significant portion of the working population. For large companies, with the transition to digitalization and automation, there will be a certain amount of unemployment not returning in the new period. So let's assume that if 3 people are left out, 1 cannot return… Since the real loss is in low-wage employment, the artificiality of wage increases will continue.
The fiscal package uncertainty and the cut of public aid in this context are the most challenging situation for households. Treasury Secretary Steve Mnuchin and Speaker of the House Nancy Pelosi are working to reach an agreement ahead of the elections. While the Democrats have proposed a plan of 2.2 trillion USD, the White House's counter offer includes 1.5 trillion USD, which can be increased to 2 trillion USD. However, there is still no agreement. At this stage, fiscal policy expansion is as important as the actions of the Fed, perhaps more, for the economy.
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