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‘No one thinks the right outcome is zero’
Treasury Secretary Steven Mnuchin says “there is more work to be done” to help the U.S. economy recover from its pandemic-induced recession. But he and Democrats disagree on the scale of the problem, and the scope of the solution, making it hard to predict when — or if — lawmakers will strike a deal on another economic stimulus package.
Mr. Mnuchin and House Democrats painted different pictures of the economy at a congressional hearing yesterday:
• The Treasury secretary emphasized that the economy was “doing great” relative to the worst-case pandemic situations. He said that some of the job losses were due to “certain states are not opening up.”
• The House majority whip, Jim Clyburn, Democrat of South Carolina, warned of a “K-shaped” recovery, in which the wealthy bounce back and the rest lag behind. “There’s one Wall Street and there’s thousands of Main Streets not doing well,” he said.
Who’s right? A number of economic reports are due this week that could shed some light on the course of the recovery. Today, the Congressional Budget Office will release an update to its 10-year economic projections. Tomorrow, weekly jobless claims are expected to show a large decline, due mostly to methodological changes. On Friday, the monthly report on jobs is predicted to show the unemployment rate falling to single digits for the first time during the pandemic, to a level roughly equal to the peak reached during the global financial crisis.