SEATTLE (Scrap Monster): After nearly a year of big changes for the United States, voters on Nov. 3 added at least one more, electing Democrat Joe Biden to replace Republican Donald Trump as President.

In a close contest that wasn’t called until four days after voting ended, Trump, as he did four years ago, significantly exceeded his polling numbers, but this time by not quite enough. A week after Election Day, with Georgia and North Carolina still too close to call – Biden and Trump, respectively, were holding on to narrow leads in the two states – Biden had 290 electoral votes to Trump’s 214.

Even with Biden having exceeded the 270 electoral vote threshold for election, the results of the race have yet to be formally certified. With allegations of fraud and voter irregularities in several 
states, President Trump has so far refused to concede and has filed various legal challenges. It appears, however, that few people outside of his most loyal allies think he has a chance of coming out ahead by the time the Electoral College meets to officially elect the President on Dec. 14.

In the popular vote count, Biden received the largest number of votes of any candidate in American history – around 76.5 million to Trump’s 71.7 million. Election Day was no Blue Wave, however, contrary to the predictions of many pundits and news organizations. While Democrats retained control of the House of Representatives, they will have a significantly smaller majority. It appears that Republicans will have about 210 seats in the next Congress, and perhaps more.

Republicans also have a good shot of holding on to the Senate, again contrary to many media predictions.The GOP will have no fewer than 50 seats in the 100-member upper chamber, with the Democrats holding a minimum of 48. The remaining two to be determined are both in 
Georgia, where no candidate in either race received a majority of the votes, forcing runoff elections to be held on Jan. 5. Republicans have the advantage of incumbency in both contests, but if Democrats sweep them, the 50-50 tie would effectively give them control of the Senate, since, as Vice President, Kamala Harris would cast the tie-breaking vote in the chamber.

A split or a Republican sweep, though, would mean at least another two years of divided government, making it difficult, if not impossible, for the Biden Administration to push major initiatives through Congress without bipartisan support. For some, this is a reassuring result all around. The new Administration would likely provide relief from some of the stresses of the past four years, while a GOP majority in the Senate would prevent the policy pendulum from swinging far to the left, making proposals like packing the Supreme Court and the Green New Deal and its derivatives nonstarters.

Some have suggested that, while Senate Majority Leader Mitch McConnell would be sure to quash Democratic priorities as much as possible if the GOP maintains control of the Senate, he and Biden, who were colleagues in the chamber for more than 20 years, could find common ground on issues such as providing another round of stimulus funding.

While Wall Street is often thought to favor Republican Administrations, the markets responded well to Election Day, with the Dow Jones Industrial Average rising 6.1 percent from Nov. 3 to Nov. 9, and the S&P 500 Index gaining 5.4 percent.

The markets were also buoyed by news that a coronavirus vaccine candidate developed by Pfizer had achieved more than 90 percent effectiveness in trials, with no major safety concerns. The company could seek emergency approval from the Food and Drug Administration as early as late November and, if all goes well, could immunize as many as 20 million people by the end of the year.

The potential for a return to normalcy in 2021 obviously bodes well for an economy that has already begun to bounce back from the devastation of the pandemic and accompanying lockdowns. During the third quarter, the economy grew at a record annualized rate of 33.1 percent, an extraordinary number that followed an equally extraordinary 31.4 percent decline in

Q2, according to the Bureau of Economic Analysis. As the bureau matter-of-factly noted, “increase in third quarter GDP reflected continued efforts to reopen businesses and resume activities that were postponed or 
restricted due to COVID-19.”

The Federal Reserve on Nov. 5 announced, as expected, that it will leave the target range for the federal funds interest rate unchanged at 0 to 0.25 percent term.

The unemployment rate also continued to drop, with the economy adding 638,000 jobs in October to push the rate down a full percentage point to 6.9 percent. That is a lot of job creation in one month, with the economy so far clawing back about half of the 22 million jobs that were lost in March and April.

“Economic activity and employment have continued to recover but remain well below their levels at the beginning of the year,” the Fed’s Federal Open Market Committee said in a statement. The path of the economy will depend significantly on the course of the virus. The ongoing public health crisis will continue to weigh on economic activity, employment, and

inflation in the near term, and poses considerable risks to the economic outlook over the medium.

Those risks can be seen in daily new case counts that exceeded 100,000 in early November, up from fewer than 40,000 a day two months earlier. While at least part of this increase resulted from expanded testing, hospitalizations and deaths have also been trending upward, though at a much slower rate. And with winter approaching, it was reported that Dr. Deborah Birx, a top advisor to the President on the coronavirus, wrote in a private memo to White House aides on Nov. 2 that, “We are entering the most concerning and most deadly phase of this pandemic.”

Confidence among manufacturers improved from September to October, with the Institute for Supply Management’s Purchasing Managers Index increasing from 55.4 to 59.3.

“The manufacturing economy continued its recovery in October,” the chair of the Institute’s Manufacturing Business Survey Committee said. “Survey Committee members reported that their companies and suppliers continue to operate in reconfigured factories; with every month, they are becoming more proficient at expanding output.” Of 18 industries surveyed in October, 15 reported growth.

Consumer confidence was little changed in the month leading up to the election. The University of Michigan’s Index of Consumer Sentiment crept up from 80.4 in September to 81.8 in October, while The Conference Board’s Consumer Confidence Index slipped from 101.3 to 100.9.

“There is little to suggest that consumers foresee the economy gaining momentum in the final months of 2020, especially with COVID-19 cases on the rise and unemployment still high,” the Board’s director of economic indicators said.

Notwithstanding the developments in early November, much uncertainty remains. While President Trump is extremely unlikely to overturn the results of the election, election-related legal challenges have yet to be litigated or resolved. Control of the Senate remains undetermined, with two high-stakes Georgia Senate runoff elections that will likely dominate the news coming in January. And promising vaccine test results still leave the country and the world far from the end of the pandemic, especially with the seven-day rolling average of daily deaths in the United States exceeding 1,000 for the first time since August. But a divided country will soon come together to welcome one happy development, the passing of 2020 into the annals of history, and the hope-filled start of a New Year.

Courtesy: AIIS