As Congress fights, analysts warn economy needs help now

WASHINGTON (AP) — As Congress and the White House resume their efforts to agree on a new economic aid package, evidence is growing that the U.S. economy is faltering. And so is concern that the government may not take the steps needed to support hiring and growth.

“We’re in a pretty fragile state again," warned Nancy Vanden Houten, lead economist at Oxford Economics, a consulting firm. “The economy needs another shot in the arm.”

With unemployment still at a high 11.1% and hiring potentially slowing in July, the economy is likely to weaken further without more government aid, economists say. Few agree with White House economic adviser Larry Kudlow's assertion on Sunday that the nation is on a V-shaped recovery path, in which the sharp recession that began in February would be followed by a quick rebound.

What's needed, most economists say, is continued extra aid for tens of millions of unemployed Americans, along with more funding for state and local governments and more grants for struggling small companies, many of which could go out of business.

Yet even with the viral outbreak intensifying and nearly half of Americans whose families have endured a layoff saying they fear those jobs are lost forever, Congress isn't anywhere close to agreeing on the outlines of a package even as a $600-a-week federal payment to the unemployed has expired.

The debate coincides with worrisome signs about the job market and the economy. The number of laid-off workers who have applied for unemployment benefits has topped 1 million every week for 18 straight weeks. Before the pandemic, that figure never exceeded 700,000. Real-time data shows that Americans' visits to shops and restaurants have leveled off after having grown in May and June. Air travel fell last week compared with the week before.

As Congress struggles to...