Economists and market analysts said that Biden has a long list of economic fixes once he took office in January.
He will be inheriting an economy battered by the pandemic. While most economic activity metrics had already risen from the previous shattering records that his in March and April, the pace of improvement had slowed down. Analysts are also worried about the rising coronavirus case numbers will also suppress the economic momentum that the country had managed to make so far.
One thing is for sure, it won’t be easy for Joe Biden. Although the Senate’s control is still yet to be determined, many believe that it is highly likely that the Congress’ upper chamber will nevertheless have a Republican majority with Senator Mitch McConnell as a Majority Leader.
In the past, Biden has referenced his work with Sen. McConnell to bolster his credentials as a politician who had successfully worked across the aisle. However, McConnell’s public backing of President Trump’s refusal to concede is a clear sign that bipartisanship will be difficult for Joe Biden.
Ross Mayfield, an investment strategy analyst at Baird, said, “With a divided Congress, a handful of the major legislative priorities of a Biden administration seem unlikely.” He continued by saying, “Any kind of major corporate tax hike or wealth tax seems incredibly unlikely with a Republican Senate.”
Recover from the Coronavirus
Experts agree that containing the burgeoning number of coronavirus cases is the only way to mitigate the economic crisis that has crippled the country.
Once the virus gets under control, it will ensure that stores, hotels, restaurants, and entertainment venues will stay open. Also, Americans will again have the confidence to take flights, eat out at restaurants, attend ball games, and shop in stores.
The Chief investment strategists at CFRA Research said, “He’s [Biden] going to encourage the governors to recommend that face masks be mandatory to try and improve the chance of the economy opening as quickly as possible. I think everybody realizes that more action is needed.”
Get Americans more stimulus
In addition to the problem connected with coronavirus, Biden also has to get Americans more stimulus. However, economists are divided on whether or not and when another batch of aid will arrive. Most analysts agree that the People need an additional incentive.
“Biden Team, Pushing Quick Stimulus Deal, Prepares for Renewed Recession
Economists warn that lawmakers must pass aid now, as a renewed coronavirus surge chills consumer spending and business activity.” https://t.co/S81cUIcMZZ pic.twitter.com/CApAB7OIvx
— WWU Center for Economic and Business Research (@PugetSoundEF) November 23, 2020
Work on bringing back jobs
There is a growing number of job losses all over the country. Starting from temporary layoffs, workers are now permanently losing their jobs. Labor economists stated that the situation will get worse between now and the inauguration, particularly if the current alarming trajectory of cases continues to go unchecked.
In addition to this, economists agree that even if Joe Biden will handle the coronavirus and avoid the reimpositions of lockdowns, Americans will still need to have the means and willingness to spend.
That is why labor analysts are also suggesting that the stimulus package is an important step. Sam Stovall, a chief investment strategist at CFRA Research, said, “He would want to focus on stimulus right away to save as many jobs as he can.”
Consumer spending is the highest contributor to GDP. Suppose the country puts money in the pockets of the American people. In that case, they can help protect the jobs of countless cashiers, hotel staffers, hairstylists, cooks, and other people working in high contact service sector positions.
Ross Mayfield, an investment strategy analyst at Baird, also stated that another way Biden could help gain jobs is to organize more PPE production at American factories.
“I think you’ll probably see some effort on some things like utilizing the Defense Production Act to mobilize some U.S. manufacturing,” Mayfield said.
He continued that this could bring multifaceted impact such as adding jobs, securing enough PPE to front line workers who help combat the virus, and bringing back American manufacturing to rebuild the country.
Mayfield also added, “in proposing a Public Health Jobs Corps, Biden is wisely copying from the New Deal’s playbook of providing short-term ’emergency’ employment.”