US President Donald Trump is likely to make the next round of US Treasury-level stimulus announcements on Thursday, including the first of more than $1 trillion in additional debt relief.
The $1.6 trillion package will be the largest in US history and would be the biggest since the US government declared a $1 Trillion surplus in October 2017, which came as the global economy grew for the first time since 2008.
“This $1 billion is going to give companies and households more confidence in the ability of the economy to continue to grow,” White House economic adviser Gary Cohn said on Monday.
Trump, who took office on Jan. 20, was widely seen as benefiting from the economic growth brought about by the US stimulus, which boosted consumer spending and helped lift the US unemployment rate from 4.6% to 5.8%.
He also took credit for boosting the US dollar, a move that has helped the US trade deficit plummet from $1,300 billion in 2016 to $150 billion in 2017.
Trump said he planned to announce a plan to increase spending in an attempt to stimulate the economy, but the plan could be in jeopardy if Congress refuses to extend the relief.
Trump has also been trying to sell Americans on the idea of the economic boom he is promising to create through his administration’s policies.
The president said in his speech to Congress on Tuesday that the US would be creating 20 million jobs by the end of the year, and his budget for the fiscal year ending on Sept. 30 will detail the details of the stimulus plan.
But the $1trn is only part of the $19 trillion stimulus package, which includes $5 trillion in tax relief for individuals and businesses, and another $1tn in spending for infrastructure and other projects.
The new stimulus package will not be enough to lift the unemployment rate to 6.6%, but it could make a real difference.
Since Trump’s inauguration, unemployment has risen to 6% and the number of jobless Americans has jumped from about 17 million to almost 28 million.
The US economy has grown by more than 2.5% in the second quarter, according to the Commerce Department, which is up from 1.9% in Trump’s first two months in office.
The latest data from the Bureau of Labor Statistics also shows that the unemployment number is now 4.2 million, the highest level since the end-of-2009 recession.
“The US is going through a recovery that is very strong, and this is the first real recovery since the Great Recession,” said John Bresnahan, chief economist at Capital Economics in Washington.
“It is a lot of people that are in work, and we have a big labor force and the economy is creating new jobs at a very high rate.”
In his speech on Tuesday, Trump promised that the new tax package would be a boon to businesses and workers.
“If this tax reform bill passes, we will see job growth and wages rising, not falling, at a pace that will help millions of Americans and make our country more prosperous and more stable,” he said.
“I am so confident that the American people will support the tax plan we have proposed.”
But some economists have warned that the tax reform plan is unlikely to make much of a dent in the jobless rate.
“A lot of the tax cuts we have seen in recent years are not enough to stimulate economic growth and job creation,” said Richard Reitzes, a senior economist at the liberal-leaning Center on Budget and Policy Priorities in Washington DC.
The jobs data from last month, however, showed that job growth in September was more than double the 3.2% pace from a year earlier.
“While there is still some slack in the recovery, we are seeing strong job creation and growth in the manufacturing sector, a robust housing market and the service sector, which will allow the economy and job growth to recover in the short term,” Reitzles said.
The unemployment rate in the US has been hovering around 8% since October, but that number has fallen to 4.7% since Trump took office.
Trump has been criticized for his handling of the unemployment issue, which has helped his popularity.
On Monday, he called the unemployment figure “a joke” and said the unemployment of the American workforce is “totally over-stated”.
“This is one of the worst numbers we’ve ever had in the history of our country.
We have had record numbers of people out of work for long periods of time,” Trump said in a statement.