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'We're Not Out of the Woods Yet': Is the Economy Back on Track, and What Will It Mean for the Election?

jobs and unemployment

The economy will be a major factor for voters in the presidential election. While there are signs it's starting to come back from the COVID-19 shutdown, analysts say it could take years to fully recover.

That's why many are watching the Federal Reserve Board today, as it delivers its first economic forecast and policy proposals since late last year–before the pandemic forced an unprecedented shutdown, but on the heels of an encouraging jobs report that millions of Americans are going back to work.

"We sure did get a blockbuster jobs report on Friday, there's no question about that, and boy was that good news when we most needed it given the havoc and chaos of the last three months. But we're not out of the woods yet," said Heritage Foundation economist Stephen Moore.

The economy went into recession in February, ending more than 10 years of expansion. The Labor Department reports 11.5 million layoffs in March, then 7.7 million more in April.

The Fed is expected to keep interest rates near zero as it works to usher along a recovery, but Moore says the speed in which the nation bounces back, depends largely on state economies. 

"What matters most is getting these states open for businesses. As we've seen in Florida, and Texas, and Tennessee and Georgia and so many of these red states with Republican governors that once they open up their businesses that people come back to stores, people come back to work and revenue starts flowing again," Moore told CBN News.

The Fed has already offered trillions in support to financial markets and worked with the Treasury on loans to small and medium-sized businesses. While there's talk of another massive stimulus package, Republicans want to wait and see. 

President Trump is optimistic following the May rebound of 2.5 million jobs, tweeting:

2020 contender Joe Biden pushed back:

"Donald Trump has to convince the American people that he's got the American economy on the right track and...I think the big issue for the election in November 2020 is the answer to this question: Do you believe that Donald J. Trump or Joe Biden is better able to guide us back into prosperity," said Moore.

While Biden leads Trump overall based on some polls, registered voters believe the president is more equipped to oversee an economic recovery. 

According to a recent NBC/Wall St. Journal poll, 48 percent to 37 percent give Trump the advantage in handling the economy.

Currently, all 50 states are in some phase of re-opening. But some are also seeing an increase in coronavirus cases, which could lead officials to slow the pace of getting people back to work.

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