“We need to get money to the American public now, the people that are most hurting,” he said early Thursday on CNBC, after the latest weekly jobless claims figure showed an unexpected deterioration.
Early, many investors and economists had penciled in a roughly $1.5 trillion stimulus from Congress. But the confusion of on-again, off-again talks, and an ultimately ineffective attempt by the White House at stimulus-through-executive-action, made the process unpredictable.
Investors Puzzled
“It’s hard to know exactly what’s priced in” to financial markets, said Aaron Clark, portfolio manager at GW&K Investment Management. He said his best guess is that “there’s not much in the way built in for expectations for a package to take place by the end of the year.”
“I suspect that they don’t want to give the president a win three weeks before the election,” Mnuchin said of Democrats in a Wednesday evening appearance on Fox Business.
House Republican leader Kevin Brady was more direct. Pelosi has shown “her desire to not help this economy or anyone before this election,” he said in a call with reporters Wednesday. “Do they want to continue to sabotage this economy ahead of this election for their own political gain?”
“The lack of a Covid package lies directly at the feet of Republicans. The White House has never been serious about this. The musical chairs of who is negotiating this is never ending,” said Representative Gerald Connolly, a Virginia Democrat. “Even the president in the haze of Covid therapy treatments has changed his mind about big, small, no deal at all.”
Pelosi told MSNBC on Wednesday night that while an accord remained a possibility, the two sides remained far apart on worker safety, school funding, and a strategic testing plan, among other issues.
She added that negotiations were continuing on a testing plan. “Tomorrow, we’re hoping to get better language back on how we crush the virus,” she said. Mnuchin said Thursday that he wouldn’t let testing be a roadblock to a deal.
Economic Narratives
Economic indicators since the summer have presented a mixed picture, allowing each side to paint a different narrative. Some sectors have done well, like a housing market that’s booming thanks to record-low mortgage rates in the wake of Federal Reserve easing. Trump and his aides have argued a V-shaped recovery is here, making the Democrats’ proposal excessive.
At the same time, the data show the recovery is already slowing. September saw the smallest gain in employment since a jobs rebound began in May. The U.S. is still down 10.7 million jobs from February, a bigger loss in payrolls than the 8.7 million seen during the 2008-2009 recession. A fall surge in Covid-19 cases threatens more economic damage. Fed officials have become increasingly clear in their calls for fiscal action.