London Daily

Focus on the big picture.
Saturday, Aug 15, 2026

A vaccine might be coming, but the Covid economy still desperately needs stimulus

A vaccine might be coming, but the Covid economy still desperately needs stimulus

The coronavirus-ravaged economy just received a jolt of something it hasn't experienced in months: hope.

Pfizer revealed Monday that data show its trial coronavirus vaccine is more than 90% effective, exceeding even the most optimistic expectations. The breakthrough set Wall Street zooming to record heights on hopes for a full economic recovery.

But while the vaccine could be an economic gamechanger, it will take months before doses are widely available -- and the US economy badly needs help now in the form of stimulus.

"This is some of the most unambiguously good news for the economy that we've had in a long time," said Joe Brusuelas, chief economist at RSM International. "We now can see the light at the end of the tunnel. And it's not an oncoming train."

Yet it's crucial that politicians in Washington don't get lulled into a false sense of complacency -- or use the vaccine progress as an excuse to put off or limit the amount of fiscal relief.

"Lawmakers have to complete the bridge they started building at the beginning of the pandemic to get us to the end of the pandemic when people will feel comfortable going to restaurants and ballgames," said Mark Zandi, chief economist at Moody's Analytics.

Failure to provide aid would risk lasting economic damage, with bankruptcies and business closures hindering a full recovery. Industries like restaurants, hotels, concert halls and airlines continue to be crushed by the health crisis, and they can't wait much longer for support.

The dark winter hasn't been canceled


Economists have urged Congress to consider providing enhanced unemployment benefits, forgivable loans to small businesses, aid to the travel industry and funds that prevent a wave of layoffs by local governments hit by massive revenue shortfalls.

The need for fiscal relief is amplified by the worsening pandemic. Infections are soaring, hospitalizations are climbing and deaths are elevated. A record 126,742 new coronavirus cases were reported in the United States on Saturday alone -- the fourth straight day above 100,000 .

"We're still facing a very dark winter," President-elect Joe Biden said Monday after the vaccine announcement.

The economic rebound will be slowed by new health restrictions. For instance, Rhode Island recently announced a stay-at-home advisory that begins at 10 pm on weeknights and 10:30 pm on Fridays and Saturdays.

"The vaccine is great. It makes everyone feel better. But at the end of the day, the pandemic is as bad as it's ever been," said Zandi. "We still have a lot of unemployed people, small businesses struggling to survive, airlines running on fumes."

'I would have starved'


Rainbow Rhodes, a career bartender/mixologist out of work since March, expressed optimism about the Pfizer (PFE) vaccine.

"The vaccine is promising because people will believe and trust enough to start coming back out," said Rhodes, a 40-year-old who lives in Jersey City, New Jersey. "Until the restaurants, bars and nightlife scene is opened back to full capacity, there's no way a lot of people like us get jobs."

When lockdown orders were issued, Rhodes said her weekly income instantly went from $1,000 to zero. Rhodes has three daughters, two in their twenties and one teenager, and her husband is a career musician who's also been out of work since the spring.

"I'm insanely lucky. If not for friends and family, I would have starved. My husband and I would have had nothing," said Rhodes, who added most days she lives on ramen or eggs.

Rhodes urged Congress to put aside differences and reach a relief deal. "It's absolutely ridiculous. It's a humanitarian crisis and they're just looking the other way," she said.

Hotels are still clamoring for help


The travel industry has been hit particularly hard. Hotel occupancy rates are nearly one-third below pre-crisis levels, according to the CNN Business Recovery Dashboard.

There's no doubt a safe and highly effective vaccine brightens the outlook. Shares of Marriott (MAR), Hilton Worldwide (HLT) and Hyatt (H) all surged 12% or more Monday.

"It's very exciting news," Best Western CEO David Kong told CNN Business Monday. "So many people have been cooped up and feeling depressed. This gives them hope that the end is near."

However, Kong warned the hotel industry still requires federal relief to stay afloat until a vaccine is widely distributed. And he said it's "certainly a fear" that the vaccine news will take the pressure off Congress to act.

"A lot of people are still suffering. It's devastating," said Kong, who added the spike in hotel stocks is for "Wall Street, not Main Street."

Like many hotels, Best Westerns are owned by franchisees rather than a deep-pocketed corporation, and they've cut an estimated 20,000 jobs during the pandemic. Additionally, the parent company that owns the hotel brand has laid off about 800 corporate associates.

Even if a vaccine is widely available in the second half of 2021, the hotel industry won't experience a "solid recovery" until 2023, according to S&P Global Ratings.

With the election over, Congress may not face imminent pressure to get a fiscal stimulus deal done. And Republicans are expected to retain control of the US Senate -- unless the party loses both run-off elections expected to be held in Georgia.

"That could be an opportunity to get people's attention," Kong said of the Georgia races.

'Premature to declare victory'


The sweeping actions from Congress and the Federal Reserve this spring were aimed at preventing economic scarring. That's because it becomes much harder for those on long-term unemployment to get rehired. Likewise, it takes time for shuttered businesses to be replaced by new ones. It's far more efficient to keep businesses open and workers working, if possible.

Gus Faucher, PNC chief economist, said the looming vaccine increases the need for Congress to prevent long-term scarring.
"We want businesses that are viable in the long run to stay open," said Faucher. "It would be premature to declare victory and go home."

The vaccine progress should minimize fears from deficit hawks that Uncle Sam is going to be on the hook for never-ending support to the economy.
"The fact the vaccine is in sight could make us feel comfortable spending this money," said Constance Hunter, chief economist at KPMG. "We can give you this bridge to the other side because we know it won't be the world's longest bridge."

Newsletter

Related Articles

0:00
0:00
Close
UK and Finland Discuss European Defence and Continued Support for Ukraine
Nigel Farage Wins Clacton By-Election to Return to the House of Commons
UK Government Deploys Military to Help Fight Wildfires and Bans Disposable Barbecues
UK Records Hottest Day of the Year as Fifth Summer Heatwave Peaks in Southern England
UK Condemns Houthi Actions and Warns of Red Sea Threat to Global Trade
UK and Solomon Islands Open Wildlife Photography Exhibition in Honiara
UK Small Businesses Face Continued Cash Flow and Tax Pressures
Greatham Marsh Restoration Restores Tidal Wetland in Hartlepool After More Than 200 Years
UK Health Regulator Urges University Students to Check Meningitis and Measles Vaccination Status
Mining Remediation Authority Completes Major Ground Stabilization Works in Scottish Community
UK Food Crime Investigators Seize 33 Tonnes of Illegal Food in Multi-Agency Operation
Technical Qualification Uptake Hits Record High as Advanced Mathematics Results Improve
UK Summer Temperatures on Course to Challenge Long-Standing Records, Met Office Says
UK Farmers Bring Forward Cereal Harvests as Drought Threatens Yields
Wildfires Surge Across England and Wales as Fire Chiefs Report Record July
UK Nurses Warn of Heat Risks as Hospital Staff Struggle With Extreme Temperatures
Southern Water Seeks Drought Order for Hampshire and Isle of Wight Amid Water Shortages
UK Heatwave Pushes West London Temperature to 38.1 Degrees as Health Alerts Continue
UK Economy Grows 0.4% in Second Quarter Despite Global Uncertainty
China’s Kimi Launches AI-Focused Credit Card With Agricultural Bank of China and American Express
UK Residents Gather to Watch Rare Partial Solar Eclipse
Reform UK Deputy Leader Richard Tice Faces Criticism Over Legal Threat Against Guardian Journalist
Michael Forsyth Elected Speaker of the House of Lords
Cambridge Researchers Launch £20 Million Human Organoid Drug Testing Programme
Heathrow Loses European Passenger Traffic Lead to Istanbul Airport
Households Near New UK Electricity Pylons to Receive £250 Annual Energy Bill Discount
UK Government Estimates Zero-Hours Contract Ban Could Cost Employers Up to £3 Billion a Year
Robert Jenrick Leaves Conservatives for Reform UK in Major Parliamentary Defection
UK Police Chiefs Urge Government to Block Early Release of Andrew Harper Killers
UK Government Holds Emergency Cobra Meeting as Drought and Heatwave Raise Wildfire Risks
Former Labour Adviser Arrested on Suspicion of Spying for China Held Privileged Access as Top Party Donor
Turkish Parliament Passes Landmark Bill Granting Conditional Amnesty to Disarmed PKK Members
Donald Trump Warns FIFA Against Ousting Gianni Infantino Amid Revolt by Global Football Leaders
Jeff Bezos Joins Investor Group Closing In on $6 Billion Liverpool FC Stake
Police Conduct Cross-Border Raids Against Northern England Drug Network
Nicola Sturgeon Protested at Edinburgh Festival Fringe Event
Major UK Retail Chain Enters Administration With One Hundred Fifty-Four Stores Set to Close
Heathrow Renews Call for Runway Expansion After Losing Europe’s Busiest Airport Ranking
Government Condemns One Million Pound Thames Water Executive Bonus Amid Drought
NHS England Says More Than One Hundred Thousand Hepatitis C Patients Have Been Cured
UK Foreign Secretary Ed Miliband Calls for End to West Bank Settler Violence
UK Prepares for Deepest Partial Solar Eclipse Since Nineteen Ninety-Nine
UK Heatwave Triggers Amber Health Alerts as Economic Losses Reach Four Point Four Billion Pounds
UK Offers Electricity Bill Discounts to Communities Hosting New Power Infrastructure
Bank of England Expected to Hold Interest Rates at Three Point Seven Five Percent
UK Government Moves to Ban Subscription Traps and Misleading Retail Discounts
Andy Burnham Gives Councils New Powers to Block Betting and Vape Shops
UK Councils to Receive Sweeping Planning Powers to Ban New Vape and Betting Shops
Nicola Sturgeon Says She Has No Contact With Estranged Husband After SNP Embezzlement Case
Police Arrest Two Men After Aberdeenshire Defense Technology Office Break-In
×