The administration has waffled between advocating a full-court stimulus plan, a skinny stand-alone plan that would help specific sectors, or nothing at all. The latest report on Friday afternoon is that President Trump has agreed to a $1.8 trillion package, which is much larger than what his Republican colleagues in Congress had been willing to accept. Indeed, Congress has been in no less of a state of confusion, with Republicans and Democrats far apart on what they deem to be the proper size, scope and composition of
support that the economy needs. 

The economy added 661 thousand net new jobs in September, less than half the 1.49 million generated in August and the smallest monthly increase since the economy reopened from strict lockdown conditions in March and April. Over that five-month span, the labor market recovered 11.4 million jobs, but that still leaves total payrolls an eye-opening 10.7 million below the level that prevailed just before the pandemic struck in February.

The Covid-19 risk remains front and center, as cases are once again rising in parts of the nation, prompting renewed social distancing mandates that could stifle the reopening process.  Election uncertainty is also becoming a more palpable influence as the candidates have distinctly different fiscal priorities that would have a huge influence on the economy in coming years.

Consumers continue to spend, stronger orders for durable goods is spurring production and housing activity is roaring ahead. But these bullish indicators are still riding the coat tails of the fiscal stimulus passed in the spring, and that fuel is quickly running out.

When the economy shut down in late March and threw a weekly record of 6.9 million workers into the ranks of the unemployed, most laid-off workers thought they would soon regain their jobs. That’s not the case now, as the duration of unemployment is lengthening and stoking widespread concerns that the job losses will become permanent.

The improving jobs data is consistent with other broad measures that depict a rebound in activity in recent months, as most parts of the economy reopened and consumers, armed with stimulus checks and enhanced unemployment benefits, resumed purchases.

Chairman Powell warned that the resurgence in virus cases is already weighing on the recovery and urged Congress to provide more aid to sustain growth.