September Is Here. Normal Isn't
Bloomberg Businessweek|August 30, 2021
Delta threatens to keep more U.S. workers at home, jeopardizing the long-promised fall comeback
Reade Pickert and Olivia Rockeman

When President Joe Biden signed a $1.9 trillion U.S. stimulus package in March, dissolving most of the emergency pandemic safety net come September seemed to make sense. Vaccinations were rising rapidly, and schools were preparing to resume in-person learning in the fall, removing two main hurdles keeping people—especially parents—out of the workforce.

All spring long, that month was heralded as a symbolic turning point for the U.S. economy. With schools set to reopen, companies solidified September return-to-office dates. Virus fears were abating, with the country in May on track to have 75% of the population vaccinated in September. The shortage of workers—brought on by a mismatch between the robust snapback in consumer demand and the number of Americans willing and able to work—was expected to “fade in the coming months and disappear by the fall,” Goldman Sachs Group Inc. economists said in May. It “makes sense” to end the temporary boost in unemployment benefits in September as planned, Biden said in June, and about half the states announced plans to end the expanded jobless aid before the expiration date.

“If you took the data points that were available at that time, theoretically you would’ve said September, and that’s what everyone said,” says Joshua Barocas, associate professor of medicine at the University of Colorado School of Medicine. “There was actually agreement with the two ends of the spectrum that generally are pitted against each other—the economic sector and the public health sector.”

But the month that originally seemed like a logical time to ease fiscal support is here, and it’s not proving to be the inflection point for normalcy that policymakers and business leaders had imagined. The delta variant of the coronavirus is ripping across a country with far lower vaccination rates than Congress had been modeling when it wrote the latest relief bill. With inoculation rates down from their spring pace, it will still take until almost 2022 to vaccinate 75% of the population, Bloomberg data show.

“If you could do the world where delta never showed up, then September wouldn’t have been so bad for a lot of the fiscal relief to start expiring,” says Claudia Sahm, a senior fellow at the Jain Family Institute and a former Federal Reserve economist. Now though, “there’s a lot of relief that shouldn’t be expiring.”

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