President Donald Trump “couldn’t be more pleased” with how the recovery is progressing but wants more stimulus to move ahead, said U.S. Treasury Secretary Steven Mnuchin, who called on Congress to pass a “targeted” bill.
Third-quarter growth will be “phenomenal,” snapping back from the huge second-quarter contraction, as the impact of coronavirus shutdowns fade, Mnuchin said on “Fox News Sunday.” He noted that some are predicting GDP growth of 30% to 35%.
Mnuchin again called on Democrats, led by House Speaker Nancy Pelosi, to work with the administration on what some have called a “skinny” economic relief measure.
“I’d like to call it a ‘more targeted bill.’ But yes, our expectation is we’ll move forward with that next week,” he said.
“Let’s do a more targeted bill now. If we need to do more in 30 days, we’ll continue to do more. But let’s not hold up the American workers and the American businesses that need more support,” Mnuchin said.
A report released Friday showed the U.S. labor-market rebound extended for a fourth month in August, showing the economy can continue to recover despite a persistent pandemic and Washington’s standoff over further government aid to jobless Americans and small businesses.
Nonfarm payrolls increased by 1.37 million, including the hiring of 238,000 temporary Census workers, according to a Labor Department report Friday. The unemployment rate fell by more than expected, by almost 2 percentage points, to 8.4%.
“You’ll see it continue to go down,” Mnuchin said of the jobless rate. He looked for “another good number” for September, which will be the final payrolls report before the Nov. 3 presidential election.
The Senate returns to Washington Tuesday with the Trump administration and Democrats no closer to agreement on a new virus relief package than they were when talks broke off in early August.
Break the Logjam
Majority Leader Mitch McConnell will try to break the logjam on Capitol Hill this week with a scaled-down $500 billion stimulus that the White House supports. Although that’s half of what the GOP offered at the end of July, McConnell is struggling to get Republicans fully behind it as newly energized fiscal hawks in the party are balking at adding to the estimated $3.3 trillion fiscal 2020 deficit.
The so-called skinny stimulus has already gotten panned by Pelosi and Democrats. They haven’t budged from their proposal for a far bigger $2.2 trillion relief package that Republicans rejected.
Federal Reserve Chairman Jerome Powell and his colleagues are warning that the economic recovery is fragile. Employers shed 22 million jobs in the pandemic shutdowns of March and April, and only about half have been recovered in subsequent months.
“The recovery is continuing; we do think it will get harder from here,” Powell told National Public Radio in an interview Friday. He said high-contact service industries remain vulnerable with the virus still present, and workers in those jobs, which often are low-paying, will need more support from both Fed policy and fiscal policy.
“It will be some time before that set of problems can work itself out, and get those people back to work and then the support can be withdrawn,” Powell said.
Both parties will be negotiating a stopgap spending measure to prevent a government shutdown when the fiscal year ends on Sept. 30. Pelosi and Mnuchin have agreed they don’t want the stimulus impasse to hinder work on the stopgap.
“We haven’t agreed on the specific details, but my expectation would be through the beginning of December,” Mnuchin said Sunday. “For now the most important thing to make sure at the end of the month we don’t shut down the government and get something past the election.”
— With assistance by Reade Pickert
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