The record-long U.S. economic expansion is over after almost 11 years, with what’s likely to be the deepest recession in at least eight decades now under way. The world’s largest economy shrank at a 4.8% annualized pace in the first quarter, the biggest slide since 2008 and the first contraction since 2014, as the need to fight the coronavirus forced businesses to close and consumers to stay home.
A nearly $500 billion interim coronavirus bill that includes additional money for the small-business loan program, as well as for hospitals and testing, looks set to become law by the end of the week after it was passed by the House. The new legislation comes as the death toll in the U.S. neared 50,000 early Friday, according to NBC News’ tally.
The world is heading for the deepest economic slump since the Great Depression, with Britain set to experience the biggest recession in a century, the International Monetary Fund (IMF) has warned. In its latest forecasts for the world economy, the IMF said that the world economy would shrink by 3% this year – a bigger contraction than the -0.1% in 2009 and, according to IMF chief economist Gita Gopinath, likely the “worst recession since the Great Depression”.
The number of people claiming unemployment benefits in the US last week hit a new record of more than 6 million as coronavirus measures took hold. Figures from the US labor department showed the number of claims in the week ending 28 March climbed to 6.65 million. The number of claims – which previously hit a record last week – have already far outstripped the levels seen during the last recession, when they peaked at 665,000.
The U.S. Senate on Wednesday unanimously backed a $2 trillion bill aimed at helping unemployed workers and industries hurt by the coronavirus epidemic, as well as providing billions of dollars to buy urgently needed medical equipment. The rescue package – which would be the biggest ever passed by Congress – includes a $500 billion fund to help hard-hit industries and a comparable amount for direct payments of up to $3,000 apiece to millions of U.S. families.
With roughly a third of the world under some form of lockdown, the White House and Senate leaders reached agreement on a landmark $2 trillion stimulus package to combat the economic impact of coronavirus. President Donald Trump is pushing for the country to get back to business by April 12, Easter Sunday, when he said he would like to see churches full of people.
The US has cut interest rates to almost zero and launched a $700bn stimulus program in a bid to protect the economy from the effect of coronavirus. It is part of a co-ordinated action announced on Sunday in the UK, Japan, eurozone, Canada, and Switzerland. In a news conference Fed chairman Jerome Powell said the pandemic was having a “profound” impact on the economy.
The new chairman of the Federal Reserve, Jerome Powell, made his public debut Tuesday, saying his expectations for domestic economic growth within the year have increased while maintaining a cautious tone. Powell told the House Financial Services Committee that he is not worried by recent stock issues and is committed to ‘clearly explaining’ Fed thinking.
The House of Representatives approved a measure to relax banking rules which supporters say will help banks grow. The measure frees banks from strict rules that were enacted as part of the 2010 Dodd-Frank law to prevent another financial crisis. Critics of the move believe it will cause a return to reckless lending behavior.
Ignoring warnings from progressives a decade after the 2008 financial crisis, sixteen Democrats joined with Republicans to advance a banking deregulation bill that is expected to pass soon. Massachusetts Democratic Senator Elizabeth Warren said the bill, which will rewrite parts of the 2010 Dodd-Frank Act and intends to provide relief to small and midsize banks, ‘puts the entire economy at risk.’