The course of COVID is the course of the economy
The economic ramifications of the COVID-19 pandemic are huge, diverse and far reaching. To help you and your business respond to what’s happening now and plan for what’s next, Diane Swonk, Grant Thornton’s Chief Economist, will analyze the latest economic news in this podcast series.
Labor market expert Diane Swonk of Grant Thornton emphasizes that looking after both the health of the economy and that of individuals is compatible, not competitive. She points to the data that shows consumers avoided going out for fear of infection, well before any official lockdowns took place. Recent news on prospective vaccines is encouraging but avoiding lasting economic or health effects will require vigilance. Listen for more.
More money could help the economy recover faster
Pundits agree that a so-called "skinny" coronavirus aid package is all that's likely to pass in Congress with the current configuration of Republicans and Democrats. Economist and former advisor to the Congressional Budget Office Diane Swonk has been crunching the numbers and says a more ambitious package could bring back employment one year sooner, in 2022.
Road to recovery runs parallel to COVID
Long-time Federal Reserve advisor Diane Swonk at Grant Thornton explains what's going on behind the scenes at the central bank during times like this. She can read the tea leaves in the official statements, even though the November meeting ended quietly with the chairman offering no obvious takeaways. Listen.
Soaring GDP for Q3 can’t rescue the U.S. economy without Federal stimulus
Despite expectations for a blockbuster GDP report coming up on the third quarter, labor economist Diane Swonk explains that the many who were laid off in the wake of COVID still don't have enough to pay for basics like food and shelter unless Congress comes through with a new aid package. This is the reality that financial market participants are finally waking up to.
Higher unemployment claims seed hopes for fiscal stimulus
The latest weekly jobless claims tally appears to be a bit better, but as Grant Thornton Chief Economist Diane Swonk explains, the dirt is in the details. Seventeen states reported higher jobless numbers, manufacturing unemployment went up, and the national total is above one million when you count the special pandemic claims for gig and self-employed workers. It's a preview of the October employment report due on November 6, because last week was the official survey week for the monthly report.
Retail sales show K shaped recovery
Retail sales rose 1.9% in September, more than twice the pace of August. Spending on vehicles, clothing and sporting goods drove the gains. But not everyone is spending. Diane Swonk explains what the K-shaped recovery means, for the haves and have-nots.
Diane Swonk interviews Chicago Fed Bank Chairman
As a past-president of the National Association for Business Economics, Diane Swonk interviewed the Chicago Federal Reserve Bank President Charlie Evans for the annual NABE conference. She asked him about fiscal policy and what Congress is doing, monetary policy at the Fed and the new inflation strategy.
No new COVID relief for families or small businesses
Despite talk of trillion-dollar packages in Washington, it looks today as if no agreement on new fiscal aid will be reached before the November election. Diane Swonk explains what that means to struggling families and small businesses hit by the COVID recession—families and businesses who, as the chairman of the Federal Reserve has repeated, are suffering through no fault of their own.
COVID forces labor changes
Diane Swonk of Grant Thornton explains the financial shortfalls in states and localities as a result of COVID's blow to the economy; this sector accounts for one in ten jobs. She also details longer term changes in the labor market, including many women forced to quit working to take care of children since education moved online. A new aid package from the federal government could alleviate much of the pain being felt by workers and small business owners. Listen.
Economy will rebound in Q3 but faces big challenges in Q4
Macroeconomist Diane Swonk sets out her forecast for the fourth quarter of the year, including how much help the Federal Reserve can provide the economy. The answer: not much. Diane says the Fed is running out of rabbits to pull out of hats so the chairman, Jay Powell, is urging Congress to provide direct aid to unemployed workers and small business owners unable to open because of the coronavirus.
Spending vs. lending to support the COVID economy
At the end of the September Federal Open Markets Committee meeting, long-time Federal Reserve advisor Diane Swonk of Grant Thornton explains what Fed chairman Jay Powell worries about the most. She also answers what more the central bank can do, when it can only "lend, not spend." As Powell well knows, it's up to Congress to spend money to support the COVID economy.
Why Congressional aid is crucial to shore up the COVID-hit economy
This podcast pairs with the September issue of Economic Currents written by Grant Thornton's chief economist. The title of the publication this month describes the status of the economy: Mission Unaccomplished, Gridlock Undermines Outlook. Diane Swonk explains why federal aid is needed to shore up the economy in this time of COVID-19 when many individuals and small businesses are struggling, "through no fault of their own," as Fed Chairman Jay Powell has put it.
Employment gains slow down, labor recovery remains fragile
Labor market expert Diane Swonk goes behind the headline job numbers to explain which sectors are calling back workers, and which are limited because of social distancing. She talks about additional federal aid needed from Congress to bridge the gap for households that are struggling in the absence of a vaccine and normal job opportunities.
New Federal Reserve policy highlights full employment instead of low inflation
Top officials at the Federal Reserve including Lael Brainard and Richard Clarida have recently admitted that raising interest rates during the recovery may have been a mistake. Long-time Fed advisor Diane Swonk of Grant Thornton explains how the central bank's new policy to allow inflation to pick up is expected to draw more people back into the workforce. She attended the Kansas City Fed's symposium usually set in Jackson Hole, Wyoming but held virtually this year.
In change, Fed Chair agrees to let inflation run hotter
Diane Swonk is participating in the Federal Reserve's annual symposium, which is virtual this year. Fed Chair Jay Powell managed to kick up excitement on the first day by changing the official policy on inflation, announcing that it will be allowed to exceed the official 2% target. Swonk explains how that can help reduce unemployment for more people. It worked after the Great Recession.
Short supply and caution at the entry-level could cap future home sales
Would-be home buyers are finding little inventory of newly built or existing homes. Diane Swonk explains the dynamics between short supply and low rates driving the housing market but also cautions that increasing evictions, a slowing recovery, mortgage deferrals and declining consumer confidence could cool a now-hot market.
Low rates help Wall Street but Main Street needs cash
Recent stock market highs may help some, but what about Main Street? Labor economist Diane Swonk of Grant Thornton explains that the average person's plight in the COVID-19 economy diverges from Wall Street for more than one reason, no matter how much the Federal Reserve tries to help.
Housing starts climb in July
Economist Yelena Maleyev works with Grant Thornton Chief Economist Diane Swonk, covering housing. July figures for housing starts showed strong demand with short supplies boosting construction in many markets. Diane is still hoping that housing could be the engine that drives us out of recession. Listen for more on the housing market with Yelena Maleyev.
Jobless claims remain high—this is no time to suspend pandemic benefits
Labor market economist Diane Swonk acknowledged the slight decrease in new unemployment claims this past week, below one million for the first time since the pandemic hit. That's still historically very high so she is calling on Congress to renew benefits extensions to households as COVID-19 continues to take a toll.
Economy adds 1.8 million jobs, still short of COVID losses
The U.S. economy added 1.8 million jobs during July, many in the leisure and hospitality sector as some regions reopened and tourists decided to venture from home. Labor economist Diane Swonk at Grant Thornton talks about the sectors of the economy that are recovering, despite the deficit of jobs lost to the COVID pandemic since February and March.
GDP contracts by almost a third on annualized basis; Fed ties economic recovery to COVID control
With much of the country shut down to mitigate the spread of COVID-19 during the spring months, the U.S. economy contracted by almost 33% on an annualized basis for the second quarter of this year. Economists expected April in particular to look bad, but as Diane Swonk at Grant Thornton noted, the numbers on consumer and business retrenchment make for grim reading.
Longtime advisor to the Federal Reserve, Diane Swonk of Grant Thornton, immediately hit on the most important point in the Fed's short statement following the July meeting. "The path of the economy will depend significantly on the course of the virus." Swonk details some of the damage to the economy that worries Fed Chairman Jay Powell.
Listen to excerpts from a proprietary briefing by Grant Thornton Chief Economist Diane Swonk. She explains how dread of COVID-19 kept many consumers at home in February, well before any states shut down. She notes that the pandemic has underlined inequalities of opportunity in the economy. And she looks at how other countries are managing the twin health and economic crises.
Food prices heading up
Overall inflation remains relatively low, but the fact is that lots of families are struggling to put food on the table. The costs at the grocery store are rising at a staggering pace. In June, consumer prices rose at the fastest pace in nearly 12 years. Listen for details.
The Bureau of Labor Statistics reports a sharp increase in hiring during May
New data from the Bureau of Labor Statistics indicates that the number of people hired bounced to a record high of 6.5 million in May, as furloughed workers came back. The number of voluntary departures and layoffs fell almost as sharply, by 5.8 million. Labor economist Diane Swonk of Grant Thornton explains more about that improvement and whether it can continue.
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