US Economic Recovery Claimed To Be Faster Than Estimated

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JAKARTA - United States (US) Minister of Labor, Eugene Scalia, said that the economic recovery of Uncle Sam's country from the corona virus pandemic or COVID-19 is running better than expected. In fact, according to him, the emergency unemployment program which will end this month does not need to be extended.

"We are fine, although we do need to be vigilant about the virus, but I am optimistic. It is very important to recall what we have done so far is much better than expected," Scalia said as quoted by Bloomberg, Monday, July 6.

He added that several economic indicators show signs of a rebound or reversal towards a positive trend, such as spending, retail spending, consumer spending and new housing construction. It happened in the last six weeks or so.

But according to Mark Zandi, Chief Economist at Moody's Analytics, the recent release of better-than-expected economic data was a result of business reopening. According to him, this condition could be reversed when new cases of COVID-19 surged in a number of US regions.

"Going forward, the jobs data is likely to look worse as businesses and consumers are receding in a number of states, where the number of virus cases is rising. Policy makers need to act quickly to ensure the economic recovery stays on track," Zandi explained.

His opinion prompted economists at Goldman Sachs Group Inc., who on Sunday, July 5, revised down their estimates for the current quarter's gross domestic product (GDP) as a result of reopening in several states. The US economy is then expected to get back on track in September.

As members of Congress prepare to resume talks on a further round of stimulus later this month, President Donald Trump's call for tax breaks, including a potential payroll tax cut, could be a key part of working conditions.

"But a weekly unemployment benefit of $ 600 set as part of the first round of stimulus should not be part of the next package," Scalia continued.

"When we reopened the economy, I didn't know we needed such a benefit. There will likely be a lot of discussion towards the end of the month between the White House and congressmen about the next round of stimulus measures," added Scalia.