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Susan Tompor: US economy to deliver record 3rd quarter — but spiking COVID-19 cases could bring slump

By Susan Tompor, Detroit Free Press on

Published in Home and Consumer News

The U.S. economic scorecard is set to post one mind-blowing grand slam Thursday for record growth in the third quarter. But, like much of 2020, don't be shocked if the economic bump reverts into yet another slump.

Worries are building that the COVID-19 spike in Europe possibly could foreshadow widespread shutdowns in the United States — and that would hurt economic growth.

Future rollbacks on a regional basis in the U.S. could slow things significantly, possibly contributing to a recession, especially if an alarming level of coronavirus cases continue in many communities and another giant stimulus package remains stalled in Washington.

Wall Street has had a bumpy ride this week. The Dow Jones Industrial Average lost 3% over a two-day run and then fell another 3.43% Wednesday to close at 26,519.95 points.

Also on Wednesday, White House economic adviser Larry Kudlow spoke before a virtual meeting of the Detroit Economic Club to talk up President Donald Trump's economic achievements. Lower tax rates. Fewer regulatory burdens. A strong pre-pandemic economy. A strong economic rebound on track despite the virus.

"The president rebuilt the economy in many key ways," Kudlow said.

 

Kudlow blamed Wall Street's latest slide on the fear surrounding spikes in the virus in Europe and the concern that France, which has been very hard hit, could be about to shut down its economy to address the health crisis. French officials have warned that tougher restrictions are looming to address the alarming surge in COVID-19 cases.

No national shutdown is in the works in the U.S., Kudlow said Wednesday.

"We have no intention to advise guidance for a shutdown. We have no intention whatsoever," Kudlow said.

Kudlow noted that 80% of U.S. businesses have opened to some extent, even though "some states haven't gone as far as we'd like them to go."

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