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Those that were hit hardest early by the pandemic continue to hire back and the Unemployment Rate has declined to ten. 2 percent but we have a long way to go despite the solid job gains last month the past three months we are still down about 13 million jobs we still have not recovered about half the jobs lost. Ten. 2 percent unemployment is pretty tough. Just for context to go back to the financial crisis ten years ago the highest Unemployment Rate was 10 percent on the nose and that was for one month. We have a long way to go. Then to point out what makes me nervous is the rate of improvement have slowed the june job number four. 8 million jobs added. The rate of employment is flowing and that it will take a long time to get back what we lost in march and april. Host do think that rate of improvement to the numbers we are seeing do not show theme effect of the states have to shut down again . Yes. It was reflected in part because its we saw these gains and then the re intensification began june to mid july thatt slow down is only in part we need to be very cautious with the virus that continues to be a problem with infections at a higher rate and the potential for other states to pull back on reopenings. It will be slow go for a while. Talking about the pandemic relief to ask their message specifically on a 600 enhanced benefit what is your message . Too much or not enough and how long should it be extended . I would keep it 600 a week at least until unemployment is firmly below that 10 percent threshold. Being 10 percent we are deep and crisis and folks unemployed are really struggling there are not a lot of job openings and there are some concerns of the disincentive to go back to work 600 is a significant amount of workers in parts of the country but im sure you can find cases of people not going back to work but those areca just anecdotes. There is really no evidence the studies that are coming out looking at this question are not really finding that to a significant effect so i would keep it 600 but also it does depend on whatever Congress Comes up with if they come up with other support then we could scale it back and get the help in other ways. It depends on the package that lawmakers come up with. Enhanced Unemployment Benefits one of the charts from todays wall street journal the effect on the gdp with the enhanced benefit has increased and the effect of gdp is obviously more as the number has increased with that enhanced benefit according to the chart. What other areas are you concerned about with the effect on gdp and future growth in the us . The pandemic has bifurcated the economy. Those that were completely hammered. Its pretty obvious the Leisure Hospitality brickandmortar particularly small retailers. To do with Recreational Activities or movie theaters and the Transportation Airline industry, they got hit really really hard. The problem is a lot of those jobs probably are not coming back so those folks will have to move to different parts of the country to read train and educate and get help from lawmakers to do that. It will be difficult to get those workers back. The other part of the economy not directly hit Financial Services and professional oyservices high and jobs that employee high skilled workers they navigated pretty well so far. They havent had to lay off and those workers are doing just fine so we have two economies unfortunately what was hit hard it will be a struggle you were quoted in the New York Times the jobs market will not kick into high gear intel there is a vaccine. Elaborate on that a little bit. Yes. I think it will be very difficult for the economy to get back into full swing until the vaccine is adopted. The first is consumers. Particularly baby boomers people like me in their fifties and sixties and seventies and are nervous about the health risk imposed of the virus. They will not travel as much or eat out at restaurants or go to. Movies or concerts and just not want to spend but shelter in place that is a big weight on economic growth. Boomers account for almost half of all the spending done in the United States thats a pretty big cohort. And businesses themselves by nature they are cautious it will not take a big risk or chance with any uncertainties. They may not lay off workers and is unlikely they will make a big Expansion Plan to go to invest and hire aggressively because they just dont know how this will play out. Given those other factors its hardco to see the economy getting into its groove until we have the vaccine and its widely adopted. Host mary defazio said without additional funding in the next several months they have to lay off 2200 new york city employees. So how important is it the next round state and local funding is added and what should that level be in the short term . Its absolutely critical state and local governments get some support from lawmakers in this round of the fiscal rescue. State and local governments across the country are hemorrhaging red ink. They have no choice they cant borrow to fill the whole than they have no choice then to cut payrolls and programs prickle think of the jobs that are cut these are teachers, fir teachers, fire, police, emergeny responders, healthcare workers the kind that we need at any time but in a crisis like this they are absolutely essential and the average wage for state local government worker across the country is 65000 per year so thats way down the middle of Income Distribution so these are key middleclass americans in the state and local governments dont get help but by my calculations they need close to 500 million will stay and local government to fill the budget hole they will face over the next two fiscal years to take us through june 2022. I dont know if lawmakers have to fill that if i came for the day i would fill that hole right now. Would be nice if they did but a compromise could be half of that so it covers the whole to the end of their fiscal year to the end of june and that would be very helpful and actually critical to the economy. Host the headline of the Philadelphia Inquirer says us needs to spend big and fast to avoid falling back into recession. Counter that with the number we see on the us t debt clock of 26 trillion and counting. Which is the biggest threat not spending big and fast or lythe 26 trilliondollar number . The most immediate threat on top of us is the crisis with the economy. We dont really have a choice. We have to be aggressive and more paycheck protection that they are now debating to keep. The economy going back into recession and then it goes up as opposed to down. We will have even more red ink or a a bigger deficit and more people are unemployed and need help so there is no good choice the bad choice at this point is to be aggressive but on the other side of the pandemic economy say there is no free. Lunch then we will have physical problems in the debt load will be higher. No way around it and we will have to really focus on becoming more fiscally disciplined. That is not my top priority until we get to full employment or close so intelligence below 5 percent in right now we are at ten. 2 percent we have a long way to go. But then at that time that we really need to look at our spending and how we raise taxes to fill that budget hole to get the debt low down. Host davenport florida good morning. Caller good morning. Commenting on the state and local governments come if the government hadnt gotten us so badly into the pandemic to start with the state and local people and how the problem because thewo pandemic and also with unemployment for as long as these people have gone and then the government says we cant help you. They have to start looking at it from the little guys point of view is that all of the rich people that say they dont needee money. There are a lot of people out there that are hurting very badly and what is 600 at this point in our country . 600 a week to help them pay their rent and utilities, it just doesnt make any sense. As a normal human being doesnt anybody have any sense i can even think of the word to help other people . I understand it. You are right. I think if we as a nation handled the pandemic better and the healthcare crisis better much like what the europeans have done it Asian Countries have done we be in a different spot. The economy would be doing much better and unemployment lower, the fiscal situation not as direr including state and local governments. No doubt about that. We did not do a good job to manage the health care crisis. Certainly compared to most if not all other developed economies across the globe. You are right. Here we are this is what we have so with that its very important that the federal lawmakers provide that support to the state and local government so they can provide those essential services to ensure there isnt massho loss of those critical workers that we needed this tim time. Also i am sympathetic to that argument. There is cost and benefit of any policy action you take, but in the current context with doubledigit unemployment with the economy that is struggling come it seems to me would air on the side of helping more than necessary. I word we institute the 600 per week insurance through the remainder of the year until were on the other side of the pandemic. And then we can start to worry about the other cost of that policy. Right now at this point i am sympathetic to what you are saying. Host louisiana. Caller. Good morning. I look at a call center with the current regulations at my call is in regard to the members weat serve our members indicate they need extensions and payment options. These are heartfelt messages that show the disparity is a national disaster. I feel the only way we will overcome the t pandemic is to Work Together like efforts of world war i. Yes weye can. I totally agree. In fact the lawmakers and previous stimulus packages like they cares actct passed the first major rescue package , they did provide a forbearance those with First Mortgage loans to be edyguaranteed by governmentbacked institution they account for almost 75 percent of all Mortgage Loans outstanding. So many homeowners have the option to get forbearance, up to one year. And many have. Look at that data vader 9 percent of all First Mortgage borrowers are now getting forbearance. They can wait until they are out from under. Also some forbearance is part of the cares package that does expire at the end of septemberak and then to extend the forbearance but even banks the Financial Institutions and then to provide accommodations and people have gotten some help you are right. They need more. As long as unemployment and then to provide that support. The coauthor of the opinion piece to we need to save jobs this program could do that writing about a Employee Retention program and was that included in any of this of what we passed so far . The Employee Retention and tax credit businesses of all sizes. Micro businesses to large, and with that crisis and they have a refundable tax credit. And then to pay their workers. There is one as part of the cares act but the eligibility requirements were very stringent and the take up on that of businesses was relatively small. What i was advocating with other colleagues in that oped was to expand that retention and tax credit out to make it more effective to allow more businesses to take advantage and keep him on payroll as opposed to Unemployment Insurance. This is a very effective policy with europeans in particular germany and france and british. With the british Unemployment Rate between six and 7 percent hours is over 10 percent. And their gdp was crushed but through these programs to keep people off of the unemployment rolls have helped to spread things out during this time. So this is it at the top of the agenda unfortunately. Obviously theres a lot of things they need to get done quickly. It is understandable but i keep saying if i were there i uswould be focused on that because that would be a very effective way to help people. The more concerns of the Unemployment Insurance progra program, address the problems we have had with a Paycheck Protection Program getting money to small businesses. And then that is what we are negotiating right now. And that pandemic impacts your job. Washington dc good morning. Caller. I want toto speak out and i want to recommend a permanent fix for the federal government to support this if it is a lpandemic are not i have been furloughed and now im parttim parttime. So i dont qualify for the unemployment so i dont get the 600. So it still a challenge to pay bills. But i would recommend unemployment be 60 or 70 percent of a salary as a permanent safety net germany does Something Like this with or without a pandemic. If your employer has Financial Difficulties and you get laid off and you try to survive with a couple hundred dollars that is difficult. How about a permanent safety ne net . The Unemployment Insurance Program Needs a overhaul. It was put in place in the Great Depression and really has not undergone any significant reforms since then. There is a lot of good ideas and approached on approaches with a safety net. Germany has a Workshare Program where instead of getting laid off a business can cut peoples hours to keep them on payroll and keep them working but as part of the cares act to be partially implemented so were moving in that direction but that would be an example of something very effective and helpful. There is many other proposals that has been done to think about how to make it work in a more effective way. It was implemented at a state level and every single state has benefits that they provide and the quality of the governmental institutions to implement Theme Program some are very efficient at getting the checks out some not so much it would be helpful if we spent some time and energy and resources to upgrade the systems to make it more of a safety net fords households. And we have never been able to complete to do that. How complete is that Paycheck Protection Program . Was the last day businesses can apply for part of that . 60 percent of the proceeds have to be applied to payroll to be forgivable. Has it been a success . Its been okay. I dont want to be too critical because lawmakers had to act very critical when things were falling apart completely. And they had to get something done. You have to give them credit to getting it together as well as they did. The program has been okay. And now we have had time to see how effective it has been and we should make some changes and adjustments. That is the better approach. There is a lot of debate aboutt this. , and added speak to benefit and to be responsible for one. 3 million jobs. Thats a lot. Thats great but we lost 22 million in march and april. We are still down 13 million. We are okay but. Host new mexico go ahead. Caller good morning. What is the endgame of it is the economy stupid . Who gets to drink the last operate the last morsel or breathe the last breath of fresh air . Because that is where we are going. The stock market is going good are they just shuffling the money around . All of their profits around . If you want to have the American Flag flying at your Company Better start investing in our country, provide ppe if you want your kids to go to school or workers to go to work. None of this liability that mcconnell once is not hard to understand washington because one who praises lincoln that supports the Confederate Flag it may have the coconspirators that shot thet president. With the us china tension and the uncertainty to offset a strong jobs report. Why is the stock market continuing to do well during the pandemic. It has been very aggressive to support the economy and lowering Interest Rates 20 and to set up a crisis facility to allow to provide credit to businesses and consumers. And it is a backstop to the Financial System including those buying stock equity. There is still potential downside but they had to have the backstop. So if you hear the fed as they tell us pointblank we will not raise Interest Rates for a long time and tell rates are below 5 percent in full meemploymen employment, that is a good world is the second key reason is the market it really is in town window with the broader economy the stock market to be driven by a couple Dozen Companies like amazon and apple and facebook and netflix. The czar companies i think the top five including google account for 25 percent of all stock market valuation. It is very topheavy. One of the fallouts from the pandemic, longerterm, and this isis darker that concentrates in the hands of a few countries. Even midsize retailers going bankrupt and failing that and that they have a lot of market power and of course if you have market power, you are worth more ass a company. It is an issue they made on the other side of the pandemic. Coming together to conspire. And finally i will say the stock market goes up and down and all around. They can easily go down stay tuned. Host the house stands in for a pro forma session at 10 00 a. M. Their land good morning. Caller can you hear me. My question is if the democrats and republicans cannot come to an agreement and then for the executive order to extend the benefits. No. I dont think so. As you go down that path and he would be challenged in the courts very quickly. It will be a debate but my sense is that he doesnt have the authority to do that. At the end of the day the constitution established three branches of government and congress is there to control the Purse Strings what does government spend its money on . And President Trump went down the path i dont think that would be legal but likely that would be a court case. So using this as a negotiating point to come to some kind ofwa resolution. He wants to. From the Economic Perspective these lawmakers need to do this and should do this and absolutely have to. It makes political sense. And then to pass a piece of legislation. Economic and political logic would get it done with the use of executive order is to push those negotiations. Host you are they Economic Advisor in 2000 a in the midst of the financialen crisis happening then. If you were the Economic Advisor to the campaign what would you recommend . If you have an economy doubledigit unemployment with 30 Million People unemployed and those that see hours cut and pay cap back. Thats a lot of stress and pain and suffering. Its no good for anybody or the situation or anybody else. We need to get back to full employment as fast as possible. Very veryd quickly. I would say v very aggressive all resources to full employment as fast as we possibly can. There is never a good time to have deficits but when Interest Rates are at zero and inflation is very low and below the Federal Reserve inflation target, this is the time to be very aggressive no income support but on the other side it needs a Large Infrastructure Program and we need better infrastructure to make us more productive getting people back to work. Those that have been locked out over recent decades with the success of the economy, would try to unlock the potential of our workforce getting people back to work. We can get them to do the same thing. Those are the kinds of things i would be focused on. We need to get back to full employment as fast as possible. Or have significant social. Thank you for taking my call. One of the problems is there is no oversight on the last care is act they passed because the president came out at the very end, they had a plan. And i keep hearing people say let me go back to work. But theyre getting so much more money than they were working. But they offer your job back then that discontinues. I believe . What the president signing the executive order. But also mcconnell and a lot of the senators dont seem to care. They passed the tax bill for themselves. The top 1 percent and they dont want to help the American People or our economy. Host so to your point on oversight do you think the Commission Meets this morning onl capitol hill and that is right after the pro forma. Do you want to respond to the color . Yes. I do think she has a point with the oversight but there are mechanisms on the republican and democratic side, that they work well together but ultimately they will provide the oversight necessary to ensure the fact that we do a Fair Assessment to design the pandemic and policies going forward. They just want to but have eydifferent perspectives and that affects the way they think about things and we need to respect that and work through that. At the end of the day that leads to better outcomes. I will venture this a little bit that there was a Winston Churchill quotationnns hing ams try everything and then ultimately they do the right thing. [laughter] thats how i feel what is going on. Weve tried everything but ultimately we will do the right thing and since we have these debates andrie conflicts and we battle it out, the result is we have a better piece of legislation. Now, having said that to pass a piece of legislation lord knows our economy needs it. Lets get it done but i think we should give lawmakers credit. Thank you for taking my call. In reference to the stimulus package. And mostly the democratic states and now mrs. Policy had the government bail them out. I can understand to get state aid for emergency services, fire, police, all necessary services. But do you have final thoughts . I dont agree. I have looked. The situation coming into the pandemic was good there was a handful of states that were in more difficult situations and didnt manage things well but for the vastey majority they did a good job coming into this so the problems they are facing in terms of Political Party board. Ross the host chief economist with moodys analytics good to have you. Thank you again. Thanks for having me

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