There is "trouble ahead" for the economy and lawmakers need to act now with a stimulus package before millions more Americans fall into a "chasm and won't be able to get out," White House trade adviser Peter Navarro said Wednesday. 

"[If] you lose small businesses, you lose them forever," Navarro said on Fox News' "Outnumbered Overtime," following news that applications for unemployment benefits had hit their first back-to-back weekly increase since July and that Americans' incomes and savings fell in October. 

"Let's understand the source of the resilience," said Navarro. "Basically it's the five points in the Trump administration policy compass: the tax cuts, the deregulation, fair trade, you've got strategic energy dominance, and you've got strong defense spending. I am fully anticipating a second Trump term. If you have a flip of any or all five of those, all that resilience goes away."

The second wave of lockdowns that is coming combined with the loss of any of the points of President Donald Trump's policy will mean "these twin forces are going to really hit us in a way that, unless Capitol Hill gets its act together steps into that breach, to mix metaphors there, we are going to have an issue," said Navarro.

Families also need another relief check for stimulus, and unemployment compensation needs a reboot, he added.

There are still several strong points remaining in the economy, including on consumption and with strong existing and new home sales, said Navarro.

"That means manufacturing is strong, and the GDP revision held firm at 33% without any signs of inflation," said Navarro. "Durable goods, core capital goods, off the charts. That means manufacturing is strong."

But the bad news is that unemployment claims are up and personal income is down, said Navarro. 

"If you look at the trajectory of the three phases of stimulus and relief, it looks like a mountain, right?" he explained. "We peaked some months ago, and what we are doing is all the infusions of cash in these economies have been going down like this."

There is a "second derivative problem" he said, explaining that the first derivative shows that matters are improving, but the second derivative shows the improvement is happening at a slower rate. 

"I understand that the folks on Capitol Hill can't get along, and they like to argue," said Navarro, but the nation needs the Paycheck Protection Program for small business loans because when you "lose a small business, they ain't coming back."

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