President Donald Trump resumed attacking the Federal Reserve on Thursday, hitting the central bank after a sharp market downturn.
Trump has not sued Fed President Jerome Powell, which he has not hesitated to do in the past. But he said the Fed “gets it wrong so often,” in a criticism that came hours after Powell gave harsh warnings about what might be in store for the future of the US economy when it fight against coronavirus.
“The Federal Reserve is so often wrong. I also see the numbers and I do MUCH better than them, ‘Trump tweeted Thursday around 11 a.m.
“The Federal Reserve Mistakes So Often,” President Trump Tweeted Thursday
“We will have a very good third quarter, an excellent fourth quarter and one of our best years in 2021. We will also soon have a vaccine / therapy / treatment. It’s my opinion. WATCH! ’He wrote.
Trump returned to form by suing the Fed, which he beat last year for keeping interest rates too high for Trump.
In March, Trump said that Powell had “really increased” as the Fed began spending thousands of billions of dollars to support the country’s economy as the coronavirus pandemic struck.
The fate of Trump’s re-election could be summarized as whether the nation can maintain a positive economic trajectory and whether there is a dampening of the huge increases in unemployment among American workers.
Trump hit the Fed as the stock market plunged again on Thursday
His tweet came after another 1.5 million Americans asked for unemployment benefits last week despite the company’s reopening after the COVID-19 closures – and when the Dow Jones plunged 1,000 points following the Fed’s warning that it could take years to find lost jobs.
The latest Labor Department figure on Thursday marked the tenth consecutive weekly drop in jobless claims since their peak in mid-March when the coronavirus struck hard.
However, the rate of layoffs remains historically high.
This means that almost 44 million Americans have been laid off in the three months since COVID-19 hit hard in March, forced numerous business closings and plunged the economy into a deep recession. .
There is evidence that many Americans are still losing their jobs even as the economy seems to be recovering slowly with more companies partially re-opening the blockages of COVID-19.
Powell said it could take years for millions of unemployed to find a job.
“My assumption is that there will be a large share, well, well in the millions of people who will not be able to return to their old jobs and that there may not be employment in this industry for them for a while, “he told me.
“It could take a few years to find these people who find jobs.”
US stocks plunged following comments from Powell, with the Dow Jones losing 1,000 points at noon on Thursday.
Another 1.5 million workers made redundant claimed unemployment benefits last week. The latest Labor Department figure on Thursday marked the tenth consecutive weekly decline in jobless claims since peaking in mid-March with 6.87 million claims
Nearly 44 million Americans have been laid off in the three months since COVID-19 struck hard in March, forced numerous business closings and plunged the economy into a deep recession
According to the Labor Department report, the total number of people receiving unemployment assistance has declined slightly, indicating that some people who were laid off when restaurants, chain stores and small businesses suddenly shut down have been called back to work.
New claims for state unemployment benefits fell to 1.5 million seasonally adjusted data for the week ended June 6, up from 1.897 million the week before, the Labor Department announced on Thursday.
This removed initial claims from the record 6.87 million at the end of March.
But the number of people receiving benefits has remained high, with the so-called continuous claims number at 20.9 million for the week ended May 30, the most recent data available for this measure.
This figure was still less than 21.268 million the previous week.
The states with the highest number of new requests for the week ending May 30 were in Florida, where requests increased by 32,000; California, where demand has increased by 25,000; and Oklahoma, which increased by 16,000.
In Florida, the majority of layoffs were in the construction, manufacturing, wholesale trade, retail and service sectors. The layoffs in California mainly occurred in the service sector.
New York experienced the largest decline, with new jobless claims falling by more than 107,000. According to the report, there were fewer layoffs in the health care and social assistance sectors, retail trade and accommodation and food services.
Michigan saw its demand drop by more than 25,000, Pennsylvania lost 18,000 and Washington lost 17,000.
Dow Jones plunged 1,000 points following Federal Reserve warning that it may take years to recover jobs lost during COVID-19 pandemic
The total number of people receiving unemployment assistance has decreased slightly, indicating that some people who were laid off when restaurants, chain stores and small businesses suddenly shut down have been called back to work. In the photo above, a restaurant has reopened in Farmingdale, New York.
As of Friday, the weekly jobless claims report, the most recent data on the health of the economy, followed the news of a surprise 2.5 million non-farm wage increase in May.
It has reinforced the view that the job market has been through the worst turbulence, but claims for unemployment benefits are still more than double their peak during the Great Recession.
Many companies have reopened after closing in mid-March to slow the spread of COVID-19. However, demand remains high against a backdrop of layoffs outside the consumer sector, among the sectors that were not initially affected by the closure.
“The steady decline in claims is a positive development, but the job market has been traumatized and a full recovery will be measured in years, not weeks or months,” said Nancy Vanden Houten, American economist in chief at Oxford Economics in New York. .
“The numbers do not reflect the full extent of the blow to workers during this unique crisis. “
The Federal Reserve pledges to support the “long road” of the US economy toward recovery from the terrible 2020 – and projects unemployment rate of 9.3% by the end of the year
The Federal Reserve said on Wednesday that it would provide years of extraordinary support for the economy, with policy makers predicting a 6.5% drop in the economy in 2020 and an unemployment rate of 9.3% in the end of the year.
The unemployment rate fell from 3.5% in February to 13.3% in May.
In the first economic projections of the pandemic era, policymakers quantified what was an emerging narrative: that closures, restrictions and other measures used to fight a health crisis will affect the economy for years to come rather than be quickly reversed as the trade reopens.
Fed President Jerome Powell said Wednesday there would be an “extended period” during which it would be “difficult for many people to find work.”
He said it was now the Fed’s determined mission to bring the job market back to where it was at the end of last year.
“It’s a long way. It will take time, ”he said. “We can use our tools to support the job market and the economy and we can use them until we fully recover. “
Even if restaurants, bars and gymnasiums reopen, they do so at a lower capacity, and consumer spending on these services remains well below what it was before the viral epidemic.
Unemployment benefits provide significant support to unemployed Americans, with total payments reaching $ 94 billion in May – six times the previous record set in 2010 just after the previous recession.
This time the benefits include an additional $ 600 a week from the federal government. This additional benefit is scheduled to expire on July 31 and the Trump administration is opposed to its extension.
Republicans in Congress argue that the additional $ 600, on top of state benefits that average $ 375 nationwide, means that many unemployed workers are receiving more money from unemployment benefits than ‘They did not earn it in their old job.
They say it discourages people from going back to work.
Studies suggest that about two-thirds of recipients receive total unemployment assistance above their previous wages.
However, many workers are also reluctant to return to their former jobs for fear of contracting the virus. Beneficiaries who receive assistance may lose their benefits if they refuse job offers.
US equity futures fall for fear of second wave of virus and bleak economic outlook
The S&P 500 and Dow Jones hit a weeklong low on Thursday after a sharp rise in the past month as investors worried about a second wave of coronavirus infections and gloomy forecasts for the economy of the Federal Reserve.
The shares of airlines and cruise lines fell on Thursday.
The S&P 1500 airlines index fell 7.4%, while Norwegian Cruise Line Holdings Ltd and Royal Caribbean Cruises Ltd fell 12.6% and 9.0%, respectively.
Wall Street’s fear indicator, the CBOE volatility index, reached its highest level since May 15.
“The market is rallying because they are turning around 2021 and saying we are going to go over that and then things will return to normal,” said Sean O’Hara, president of Pacer ETF Distributors in Malvern, Pennsylvania. .
“One thing that could really change the trajectory here would be if we had a big rebound in a second wave. This is the great fear.
Easing blockages and a massive stimulus package to help the economy rebound quickly to pre-pandemic levels were essential in the S&P 500, which staged an astonishing recovery from a massive virus-induced sale.
The S&P 500 and Dow Jones Indices Ended Down Wednesday after Fed President Jerome Powell admitted that it could take years for millions of people laid off due to COVID-19 to get back to work , even if he repeated his promise to support the economy hit by viruses.
“President (Jerome) Powell was pretty careful and cautious and it spills over into market psychology today,” said Art Hogan, chief market strategist at National Securities in New York.