A Covid vaccine will not be an "instant stimulus" to the economy, according to Carl Tannenbaum, the chief economist at Northern Trust.
He said that the U.S. economy is hungry for bigger fiscal support as its recovery's momentum dwindles.
Moreover, Tannenbaum finds the Covid vaccine news and better-than-expected U.S. employment growth in October “encouraging." However, he does not lessen the need for more economic stimulus.
“On the employment front, we still have 10 million Americans that were working in January that are not working today. And those that remain unemployed are seeing a much longer track back to full employment, so they will continue to need a certain amount of support,” he said during an interview on CNBC’s “Squawk Box Asia.”
“And the other element that I think is a headwind here in the United States ... is state and local governments whose budgets are in terrible disarray at the moment for loss of revenue, they’re laying people off, cutting services and that’s bad for economic activity.”
The U.S. should not rely on a coronavirus vaccine to “solve all our problems." He pointed out that even if Pfizer and BioNTech's vaccine is “optimistically” confirmed this year, there may not be sufficient doses through 2021 to help those who need it.
However, he noted that the U.S. may not receive an economic relief package before the presidential inauguration in January due to a political divide in Congress.
“As a result, I think our recovery here in the United States, which is already losing momentum, could be at some risk if we’re waiting for a vaccine to solve all of our problems,” said Tannenbaum.
Meanwhile, U.S. Chamber of Commerce CEO Thomas Donohue on Monday urged Congress to submit additional stimulus before the inauguration of President-elect Joe Biden, saying that it will be months before the economic benefits of a vaccine would reverberate through the nation.
Is a vaccine enough to end coronavirus?
White House coronavirus advisor Dr. Anthony Fauci said that vaccine is not enough to eradicate the coronavirus.
“I think the opposite. … I really do” Dr. Fauci said. “The cavalry is coming but don’t put your weapons down, you better keep fighting because they are not here yet. Help is on the way, but it isn’t here yet.”
“So to me, that is more of an incentive of, ‘Please don’t give up. Don’t despair, the end is in sight,’ as opposed to: ‘Hey, we are good to go, don’t worry about anything.’ We are not good to go. We have got to continue to double down on public health measures,” he added about vaccines being not enough in terms of controlling the outbreaks.
Dr. Fauci’s statements came three days after Pfizer and BioNTech announced that early results revealed their vaccine candidate was more than 90% effective in addressing Covid infections.
The rate of efficacy of Pfizer’s vaccine was higher than scientists had been hoping for. Dr. Fauci had previously explained that a vaccine that is 50% or 60% effective would be acceptable.
