Stock markets were down sharply on new economic news released Thursday morning. This comes as negotiations over a new bill to stabilize the economy during the pandemic have stalled.
Coronavirus shutdowns across the country led to the worst quarterly economic report ever recorded. According to the Bureau of Economic Analysis, second quarter U.S gross domestic product plunged a record 32.9%.
“If we go back to the Great Recession, I think our worst quarter was down 8.4%. Now we're talking about a 33% annualized drop,” says CBS News Business Analyst Jill Schlesinger. The second quarter GDP dropped 9.5% from the previous quarter.
For the second week in a row, unemployment numbers are on the rise. The U.S. Labor Department says 1.4 million people filed for new benefits, up 12,000 from last week.
"The rise in joblessness has been especially severe for lower wage workers, for women, and for African-Americans and Hispanics," says Jerome Powell, Chairman of the Federal Reserve.
More than 30 million people are currently receiving unemployment benefits. People counting on unemployment checks lose the extra $600 a week in federal help Friday, and negotiations to extend those benefits as part of a larger coronavirus relief package have stalled.
"We're still miles apart on a number of issues,” says Mark Meadows, the White House Chief of Staff. “In fact, I would say there are more issues that we’re apart on then where we're closer to consensus."
The White House is pushing for Congress to pass a short-term extension of unemployment benefits until Congress can agree on a larger coronavirus relief bill. Senator Chuck Schumer says, "This is the greatest public health challenge in a crisis and the greatest economic challenge in at least 75 years. We need to confront all of these crises."
Chairman Powell says earlier rounds of coronavirus relief kept Americans in their homes and businesses open. Now that’s in doubt. "The path forward for the economy is extraordinarily uncertain and will depend, in large part, on our success in keeping the virus in check,” says Powell.
Negotiations will continue on Capitol Hill.
Senate Majority Leader Mitch McConnell said he's hopeful that a last minute deal can be reached. However, he is still working with his Republican colleagues to see if he can win enough support within his own party to pass a bill.