Reviving economy and employment among key priorities for new US president, Moody's says

The brand new US president will face key challenges including reviving monetary growth and employment as financial activity it's still weaker than pre-pandemic levels in early 2021, according to Moody's Investors Service.

The new administration must also tackle the continuing upsurge in healthcare costs through the pandemic, rising federal government debt, tense relations with China and climate change-related risks, the ratings agency said in a report on Monday.

"The next administration will face a multi-faceted challenge of setting GDP on a way to pre-crises levels and making certain the population as a whole benefits from the recovery" Robard Williams, Moody's senior vice president, said. "A significant question will be how exactly to calibrate fiscal support and finance policy priorities without further weakening the government's fiscal position."

Gross domestic product in america plunged 31.4 % in the next quarter, in line with the third GDP estimate released by the Bureau of Economic Analysis at the united states Commerce Department. The department will release its July-September GDP report on October 29, just five days prior to the presidential election.

An economic recovery will still be susceptible to new Covid-19 outbreaks as a second wave of infections has forced governments to impose restrictions.

The ongoing pandemic has highlighted inequalities in america healthcare system as medical costs "have continued to rise faster than many households' income", Moody's said.

"The size and important role of the united states healthcare industry, from providers to insurers, to pharmaceutical and medical device manufacturers, amplifies the credit implications of policy actions in this area," the report said.

Another US president may also have to manage an extremely tense relationship with Beijing, rising protectionism and hardened attitudes against globalisation both in the home and abroad, Moody's said.

"The response to these challenges will have ripple effects on credit conditions not merely in america, but all over the world," the ratings agency said.

The world’s two biggest economies have clashed over issues including trade, technological rivalry, human rights and the coronavirus, which first appeared in China.

Environmental concerns have become in importance among the united states population recently, as the physical and monetary costs connected with hurricanes, wildfires and other extreme weather-related events have grown to be more severe, the report showed.

Wildfires in California have burned a lot more than 4 million acres in 2020, a lot more than twice the previous record for just about any year and an area larger than Connecticut, Reuters reported, citing the state’s fire agency on Monday.

"The next administration's decisions on environmental regulation, the carbon-intensity of growth and multilateral cooperation on climate change will affect a variety of sectors including coal, coal and oil, utilities and automotive," Moody's said.