London Daily

Focus on the big picture.
Wednesday, Sep 02, 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 Business Confidence Improves but Remains Deeply Negative
Aberdeen Hydrogen Bus Sale Recovers Just Six Pence for Every Pound Invested
Which? Exposes Booking.com Verification Failures With Fake 10 Downing Street Listing
British Business Bank Invests Up to £46 Million in Deep-Tech Startup Fund
Scottish Government Puts Violence Against Women at Center of Legislative Program
FCA Eases UK IPO Rules to Strengthen London’s Listing Market
UK Likely to Avoid Next US Tariff Measures as Washington Targets EU
Macron Visits UK for Bayeux Tapestry Exhibition and Border Security Talks
British Chambers of Commerce Cuts UK Growth Outlook to 1% for 2026 and 2027
Keir Starmer Resigns as MP for Holborn and St Pancras, Triggering By-Election
Prime Minister Andy Burnham Unveils Devolution and Cost-of-Living Agenda
UK Borrowing Costs Surge as 30-Year Gilt Yield Reaches 5.88%
Cleveland Police Receive £2 Million to Tackle Serious Crime in Middlesbrough
Number of Young People in England Without a Close Friend Reaches Record Level
Five Arrested After Newborn Baby Dies From Stab Wounds in Sheffield
Nigel Farage Faces Questions Over Reported Second Parliamentary Standards Investigation
UK Retirement Funding Requirement Rises by £64,000 Compared With 2021
UK House Prices Rise for First Time Since April, Nationwide Says
FCA Chief Faces Allegations of Intimidating Consumer Group Over £9 Billion Car Loan Inquiry
Scottish Government Presses Ahead With Cap on Essential Food Prices
Burnham Government Moves to Overhaul Early Prison Release Scheme
UK Records Hottest Summer on Record in 2026, Met Office Says
UK Government Announces Major Reset of Diplomatic Policy Towards Israel
UK Pushes Back After Trump Reopens Falkland Islands Sovereignty Dispute
Keir Starmer Resigns as MP, Triggering Holborn and St Pancras By-Election
Andy Burnham Blames Brexit for UK’s Decade of Weak Growth in First Commons Address
England Faces Renewed Scrutiny Over Sewage Discharges and Water Quality
Victoria Beckham Business Reports First Operating Profit Since Launch
BT Expects £2 Billion From Copper Sales During Full-Fibre Rollout
UK Train Drivers Secure 3.6% Pay Rise and Avert Strike Action
FCA Chief Faces Scrutiny Over Alleged Pressure on Consumer Group in Car Finance Case
Kemi Badenoch Names Andrew Griffith Shadow Chancellor in Conservative Reshuffle
UK House Prices Rise for First Time Since April
UK Shop-Price Inflation Accelerates to 1.5% in August
Met Office Data Point to Hottest UK Summer on Record
UK Announces Emergency Prison Release Measures and £110 Million Capacity Expansion
UK Launches Expanded Free School Meals and 1,400 Breakfast Clubs
Bank of England Governor Warns G20 of AI-Related Economic and Cyber Risks
Prime Minister Andy Burnham Calls for Greater Public Control of Water, Energy and Transport
UK Gains Full Access to £13 Trillion Trans-Pacific Trade Bloc
UK Long-Term Borrowing Costs Hit 28-Year High as Oil Shock Drives Global Bond Selloff
Royal Mail Keeps First-Class Stamps at £1.80 and Second-Class at 91p
Church of England Prepares Formal Apology Over Historical Forced Adoptions
UK Competition Regulator Caps Veterinary Prescription Fees at £21
UK Aviation Authorities Roll Out Airspace Changes to Reduce Flight Delays
England Makes School Allergy Policies Mandatory Under Benedict’s Law
England and Wales Tighten Child Safeguarding Checks by Removing Supervision Exemption
Cornwall Geothermal Plant Begins Commercial Power and Lithium Operations
UK Inflation Holds Near 2.9% as Energy Costs Remain a Risk
UK Productivity Growth Averages 1.1% Over Two Years, Resolution Foundation Says
×