During a recent 60 Minutes interview, Scott Pelley said to Federal Reserve Chairman, Jerome Powell, “It seems like you’re not expecting a recovery, you’re expecting a boom.” That remark might have startled a few viewers, but quite possibly, others may have found comfort in the Fed Chair’s response.
“Well, I would say that this growth that we’re expecting in the second half of this year is going to be very strong,” Powell said. “We feel like we’re at a place where the economy’s about to start growing much more quickly and job creation coming in much more quickly.”
The Fed’s forward guidance indicates interest rates will stay untouched for a while longer.
Direct and Fast Relief from The Treasury Department
To their credit, the Fed stepped in at an unprecedented extent with the following actions.
1. The CARES Act initially provided Economic Impact Payments to American households of up to $1,200 per adult for individuals whose income was less than $99,000 (or $198,000 for joint filers) and $500 per child under 17 years old – or up to $3,400 for a family of four.
2. The Coronavirus Response and Relief Supplemental Appropriations Act of 2021 authorized additional payments of up to $600 per adult and up to $600 for each qualifying child.
3. The IRS and Treasury were responsible for a second round of Economic Impact Payments as part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 to millions of Americans who received the first round of payments earlier in the year.
4. The Paycheck Protection Program provided small businesses with funds to maintain their payroll, hire back employees and cover applicable overhead.
5. The Emergency Rental Assistance program makes available $25 billion to assist households that are unable to pay rent and utilities due to the COVID-19 pandemic.
6. The Emergency Capital Investment Program will provide up to $9 billion in capital directly to community financial institutions to augment their efforts to support small businesses and consumers in low- and moderate- income communities.
7. The Coronavirus Economic Relief for Transportation Services (CERTS) Program is providing eligible transportation service companies with resources to help to maintain payroll, hire back employees who may have been laid off, and cover applicable overhead and operational expenses.
“What do you think would’ve happened to the economy if the COVID Relief Bills had never passed?” Pelley asked during the 60 Minutes interview.
“You know, I hate to even think. It would’ve been so much worse,” Powell said. “Congress, in effect, replaced people’s incomes, kept them in their homes, kept them solvent, kept their lives together with what they did in the CARES Act. It was heroic.”
A New Economic Era With a Prolonged Virus
The pandemic has wreaked havoc on the economy. Would an expected “boom” help businesses that are still struggling to find workers, especially when overall private wages are higher than ever, in an economy down some 9 million jobs and where some employers are offering signing bonuses for jobs that didn’t offer them previously?
Sadly, as the Guardian reported, more than 3,600 U.S. health care workers lost their lives, and lower-paid health care workers who handled everyday patient care, including nurses, support staff and nursing home employees, were far more likely to die in the pandemic than physicians were. The report said deaths could have been prevented if it weren’t for widespread shortages of masks and other protective gear.
Overall, 38 million Americans say they are worse off now than before the pandemic. Nearly 55 percent of Americans say their financial circumstances are about the same as a year ago, and 30 percent say their finances have improved, according to a new Impact Genome and Associated Press poll. Today, 29 percent of Americans live below the poverty line and say their personal finances worsened in the past year. They struggled to pay bills. Thankfully, 16 percent saved money.
In April 2020, wages jumped 8.2 percent, the sharpest increase on record due to unemployed lower-paid service workers who dropped out of the calculations. One year later, average hourly earnings declined month-over-month from the first time since June.
If That Don’t Beat All
Neither Pelley nor Powell could have imagined this interesting dichotomy occurring during the pandemic: Forbes reported the number of billionaires swelled by 660, to 2,755, representing a roughly 30 percent jump. And 493 of them are first timers. In fact, seven out of eight of them are richer now than before.
Amazon founder Jeff Bezos, former owner of the Washington Post, tops the men’s list for the fourth year running. Francoise Bettencourt Meyers, the French granddaughter of the founder of L’Oreal, tops the women’s list.
Billionaires added nearly $8 trillion to their total net worth from last year, totaling $13.1 trillion. The U.S. had the most billionaires, at 724, extending the rapid rise in wealth that has not happened since the Rockefellers and the Carnegies roughly a century ago.