CARY, N.C. -

With Labor Day weekend straight ahead, experts and policymakers still view the economy like the vehicle that arrives at your dealership’s service drive with the customer saying it hesitates, despite stepping hard on the accelerator.

At least two high-level federal officials see the need for more assistance to get the U.S. economic engine running smoothly again, as economists spot ailments that could be the equivalent of a failing head gasket.

Treasury Secretary Steven Mnuchin gave testimony during a digital hearing this week hosted by the U.S. House Select Subcommittee on the Coronavirus Crisis.

Mnuchin first highlighted the successes of the CARES Act and the Payroll Protection Program before acknowledging not all economic problems are solved. Federal lawmakers still have not taken additional actions since many initial programs expired at the end of July.

“While we continue to see signs of a strong economic recovery, we are sensitive to the fact that there is more work to be done, and certain areas of the economy require additional relief,” Mnuchin said. “When it became clear that previous negotiations were not moving forward, the president took executive action to provide critical relief to Americans through lost wages assistance and other important items.

“We will continue to try to work with the Senate and the House on a bipartisan Phase IV relief package,” he continued. “I believe a bipartisan agreement still should be reached and would provide substantial funds for schools, testing, vaccines, PPP for small businesses, continued enhanced unemployment benefits, child care, nutrition, agriculture and the U.S. Postal Service, along with liability protection for universities, schools and businesses.”

Also this week, one of the board of governors at the Federal Reserve emphasized the importance of another stimulus. Lael Brainard gave a speech during a webcast hosted by the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution in Washington, D.C.

Brainard said, “the economy continues to face considerable uncertainty associated with the vagaries of the COVID-19 pandemic, and risks are tilted to the downside. The longer COVID-19-related uncertainty persists, the greater the risk of shuttered businesses and permanent layoffs in some sectors.

“While the virus remains the most important factor, the magnitude and timing of further fiscal support is a key factor for the outlook. As was true in the first phase of the crisis, fiscal support will remain essential to sustaining many families and businesses,” she continued.

And when it comes to vehicle sales, federal-government assistance appears to be a key drive as Cox Automotive pointed out through a recent consumer survey.

Perhaps reinforcing those survey findings, Curt Long offered his assessments after the Commerce Department released its auto sales data for August. Long is chief economist and vice president of research at the National Association of Federally-Insured Credit Unions (NAFCU).

“Vehicle sales extended their recovery, rising for the fourth straight month since bottoming out. Nevertheless, sales remain 11%  below prior-year levels,” Long said. “Low gas prices and interest rates are tailwinds, but ones which are buffeted by tight inventory and growing unemployment. In addition, dealers are reporting more shoppers are facing financing constraints.

“The recovery in the auto market has been far more modest than in the housing market, where high-income households flush with cash and eager for larger homes are driving sales well above year-ago levels,” he continued. “NAFCU expects auto sales gains to slow as pent up demand is fully exhausted and permanent job losses grow.”

Meanwhile, regular reading of the employment landscape arrived on Wednesday.

Private sector employment increased by 428,000 jobs from July to August, according to the August ADP National Employment Report, which is produced by the ADP Research Institute in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis. 

“The August job postings demonstrate a slow recovery,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Job gains are minimal, and businesses across all sizes and sectors have yet to come close to their pre-COVID-19 employment levels.”

Comerica Bank chief economist Robert Dye pointed out that while the August report figure is an improvement from July, it’s down considerably from the significant gains generated in May and June — 3.3 million and 4.9 million, respectively.

“Normally, this would be a very strong number, but it falls short of the consensus expectation of about a million new jobs for this report,” Dye said.

“We remain in the middle of a soup of opposing forces in the labor market,” he continued. “Some businesses are rehiring furloughed workers. Others are laying workers off as PPP loan restrictions roll off. Some are adjusting to a new world of lower demand with additional layoffs, and some are hiring in response to new opportunities.

“We expect to see the volatility of net job growth diminish in the months ahead as overall gains continue to trend down,” Dye went on to say.

Despite continue turbulence in the job market — which could impact vehicle sales since steady employment can be a significant factor in pulling the trigger on a purchase and securing financing — there remains some hopefulness as discovered by IBM.

The August findings of an ongoing IBM Institute for Business Value (IBV) survey also surfaced this week. While the results showed 70% of surveyed Americans said COVID-19 has made them more concerned about the safety and health of themselves and their families, one-third of responding Americans believe the U.S. economy will recover in 2021. The depth of that optimist varies by age as IBM detailed:

— 69% of millennials (ages 25-39) are concerned about their job security and 60% said the pandemic has taken a toll on their mental health, higher than all other age groups.

— Baby Boomers (ages 55-70+) are the most pessimistic on economic recovery, with seven in 10 reporting they believe their nation's economy will continue to see an economic downturn or significant recession.

— Generation Z (ages 18-24) is the most optimistic about the economy, with more than half noting they believe the economy will recover to its pre-COVID-19 state in the next few months.

During his digital appearance on Capitol Hill this week, Mnuchin reiterated, “We remain committed to making sure that every American gets back to work as quickly as possible.”