Trump looks like he could roll the dice by pushing to open up the economy by Easter. Doing so would be in contravention of the advice of most public health experts.
But the president seems desperate to fight for a second term with at least some evidence that the worst has passed and the economy is recovering.
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“Every day we stay out, it gets harder to bring it back very quickly,” he said at a White House briefing on Thursday.
On Thursday morning, fresh data showed new unemployment claims had rocketed to 3.2 million during the previous week. That figure was more than four times bigger than the previous all-time high, which was recorded in 1982.
Just prior to the crisis hitting, new claims had been filed at around the rate of 200,000 per week.
Almost all economists agree that the United States will soon be officially in a recession, with GDP expected to fall precipitously at least through the second quarter.
But the president opened his briefing on Thursday by insisting that things were “going to be better than ever” once the crisis passes. On previous occasions, he has promised that the economy will come “roaring back.”
On Thursday, he also said that people “don’t want to be sitting around” and held out the possibility of opening the nation up bit by bit.
“We may take sections of our country that aren’t so seriously affected,” he said. “We’ve got to start the process pretty soon.”
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But there is simply no way that the United States economy can bounce back quickly from such a seismic shock, according to most economists.
“It’s a mess,” said Mark Zandi, the chief economist of Moody’s Analytics. “At the moment, it feels like we are in a bit of a free-fall. We are headed to at least high single-digit unemployment, maybe double-digits unemployment.”
Zandi asserted that there would “not be a v-shaped recovery; maybe a Nike swoosh-shaped recovery.”
Whether that is fast enough for Trump’s reelection hopes is another question.
A president who had previously bragged about the stock market’s gains during his tenure has seen those gains largely wiped out — though some losses have been pared by a three-day upward bounce this week.
On Wednesday, Trump claimed that the media were hoping that the COVID-19 crisis would have a profound and negative effect because they wanted to see him beaten in November.
“The media would like to see me do poorly in the election,” he said.
Behind the scenes, even some Trump allies are worried about his push to reopen the economy as early as mid-April, fearing that a resurgence of the virus would be catastrophic, both in terms of public health and politically in terms of Trump’s reelection hopes.
But others defend his basic impulses on the issue.
Sam Nunberg, who worked for Trump’s 2016 campaign, said that it was unfair to portray the situation as a simple one in which the president was on one side and all experts on the other.
Nunberg argued that “expert opinion” did not begin and end with public health professionals such as Dr. Anthony Fauci, the key scientist who has been openly skeptical of Trump at times.
“He has other expert opinion he needs to listen to — on the economy, on defense, in agriculture, in labor,” Nunberg said.
Trump aides and allies sought to play down the significance of the new unemployment figures on Thursday.
But if Team Trump has clear incentives to play down the impact of the crisis, outside experts tell a different story.
“This is not just a recession. It’s different even from the Depression,” said Julian Zelizer, a professor of history and public affairs at Princeton University.
“It’s a total shutdown. People are scared not just about how long this lasts but what happens? Are they actually going to lose all their money?”
Professor Allan Lichtman of American University, one of the few prominent forecasters to predict Trump’s 2016 election win, asserted that no party has held onto the White House “in the midst of a recession, even extremely mild and fading recessions like in 1960 and in 1992.”
Still, neither Zelizer nor Lichtman were willing to count Trump out. Zelizer noted the tendency of voters to move in volatile ways “when people are really scared not just for their health but for their economic well-being.”
Lichtman noted that one of the most distinctive characteristics of Trump’s presidency has been the apparently unshakeable loyalty of his base.
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So far, Trump’s approval ratings during the crisis have ticked up. His net job approval in the RealClearPolitics average of polls as of Thursday evening — negative 2.5 points — was his best ever, except for a vanishingly brief honeymoon period in the first weeks of his presidency.
Zandi, the economist, acknowledged that there were some silver economic linings to the present moment, because the current crisis was clearly the result of a freak occurrence, rather than springing from fundamental flaws in the financial system, as was the case in the crash of 2008.
Still, he noted that Trump will have to grapple with a grim picture if he is to win a second term.
“Unemployment on Election Day is going to be high single digits. If he’s lucky, it will be five or six percent,” Zandi predicted.
“People’s savings are depleted, their net worth is lower, there will be business failures. You would think that would be a problem for the president.”
The Memo is a reported column by Niall Stanage, primarily focused on Donald Trump’s presidency.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
VICTORIA – British Columbia is forecasting a record budget deficit and a rising debt of almost $129 billion less than two weeks before the start of a provincial election campaign where economic stability and future progress are expected to be major issues.
Finance Minister Katrine Conroy, who has announced her retirement and will not seek re-election in the Oct. 19 vote, said Tuesday her final budget update as minister predicts a deficit of $8.9 billion, up $1.1 billion from a forecast she made earlier this year.
Conroy said she acknowledges “challenges” facing B.C., including three consecutive deficit budgets, but expected improved economic growth where the province will start to “turn a corner.”
The $8.9 billion deficit forecast for 2024-2025 is followed by annual deficit projections of $6.7 billion and $6.1 billion in 2026-2027, Conroy said at a news conference outlining the government’s first quarterly financial update.
Conroy said lower corporate income tax and natural resource revenues and the increased cost of fighting wildfires have had some of the largest impacts on the budget.
“I want to acknowledge the economic uncertainties,” she said. “While global inflation is showing signs of easing and we’ve seen cuts to the Bank of Canada interest rates, we know that the challenges are not over.”
Conroy said wildfire response costs are expected to total $886 million this year, more than $650 million higher than originally forecast.
Corporate income tax revenue is forecast to be $638 million lower as a result of federal government updates and natural resource revenues are down $299 million due to lower prices for natural gas, lumber and electricity, she said.
Debt-servicing costs are also forecast to be $344 million higher due to the larger debt balance, the current interest rate and accelerated borrowing to ensure services and capital projects are maintained through the province’s election period, said Conroy.
B.C.’s economic growth is expected to strengthen over the next three years, but the timing of a return to a balanced budget will fall to another minister, said Conroy, who was addressing what likely would be her last news conference as Minister of Finance.
The election is expected to be called on Sept. 21, with the vote set for Oct. 19.
“While we are a strong province, people are facing challenges,” she said. “We have never shied away from taking those challenges head on, because we want to keep British Columbians secure and help them build good lives now and for the long term. With the investments we’re making and the actions we’re taking to support people and build a stronger economy, we’ve started to turn a corner.”
Premier David Eby said before the fiscal forecast was released Tuesday that the New Democrat government remains committed to providing services and supports for people in British Columbia and cuts are not on his agenda.
Eby said people have been hurt by high interest costs and the province is facing budget pressures connected to low resource prices, high wildfire costs and struggling global economies.
The premier said that now is not the time to reduce supports and services for people.
Last month’s year-end report for the 2023-2024 budget saw the province post a budget deficit of $5.035 billion, down from the previous forecast of $5.9 billion.
Eby said he expects government financial priorities to become a major issue during the upcoming election, with the NDP pledging to continue to fund services and the B.C. Conservatives looking to make cuts.
This report by The Canadian Press was first published Sept. 10, 2024.
Note to readers: This is a corrected story. A previous version said the debt would be going up to more than $129 billion. In fact, it will be almost $129 billion.
NANAIMO, B.C. – Former Bank of Canada governor Mark Carney says he’ll be advising the Liberal party to flip some the challenges posed by an increasingly divided and dangerous world into an economic opportunity for Canada.
But he won’t say what his specific advice will be on economic issues that are politically divisive in Canada, like the carbon tax.
He presented his vision for the Liberals’ economic policy at the party’s caucus retreat in Nanaimo, B.C. today, after he agreed to help the party prepare for the next election as chair of a Liberal task force on economic growth.
Carney has been touted as a possible leadership contender to replace Justin Trudeau, who has said he has tried to coax Carney into politics for years.
Carney says if the prime minister asks him to do something he will do it to the best of his ability, but won’t elaborate on whether the new adviser role could lead to him adding his name to a ballot in the next election.
Finance Minister Chrystia Freeland says she has been taking advice from Carney for years, and that his new position won’t infringe on her role.
This report by The Canadian Press was first published Sept. 10, 2024.
