Is The US Economy Improving? 'The COVID-19 Recession Is Over' Top Economist Says, But Recovery May Be Sluggish

Moody’s Analytics economist Mark Zandi said Wednesday he believes the “COVID019 recession” is over, but added the U.S. economy may experience a sluggish recovery.

“The good news is I think the recession is over, the COVID-19 recession is over, barring another second wave, a major second wave, or real serious policy errors,” Zandi told reporters.

On a less optimistic note, he said “the recovery will be a slog until there’s a vaccine or therapy that’s distributed and adopted widely.”

Automatic Data Processing, Inc. (ADP) reported Wednesday that the U.S. shed 2.76 million jobs in May, falling well below expectations of 8.75 million job losses during the month.

“The job loss is abating. Layoffs appear to have peaked in late March and early April and they were winding down by early May,” Zandi said. “I would expect job growth to resume in June.”

In April, the U.S. lost 20.5 million jobs, with unemployment ticking up to 14.7%. Most states enacted stay-at-home orders during the month, shutting down non-essential businesses as a means to keep the coronavirus from spreading.

In response to the economic downturn, Congress passed the $3 trillion CARES Act in late March. The legislation provided financial aid to small businesses, boosted unemployment insurance by $600 a week and gave direct payments of at least $1,200 to most Americans.

Congress and the White House are now deliberating another stimulus bill. Democrats want to send another round of stimulus checks and extend the boosted unemployment insurance scheme. Republicans want expanded liability protections for businesses amid the pandemic, with President Trump promoting payroll tax cuts.

The Trump administration also wants to include incentives in the next bill to encourage Americans to visit restaurants and take vacations, the Wall Street Journal reported Tuesday.

“We’ve been through the rescue phase and we’re now in the transitional reopening phase and I think generally speaking we’d like to move into a growth- incentive phase for the future economy,” a senior administration official told the Journal.