The administration Trump reveals the magnitude of the economic shock of the 2nd quarter

L’administration Trump dévoile l’ampleur du choc économique du 2e trimestre

The containment of the spring has rushed to slam the american economy into recession, and the magnitude of the dip of the GDP of the United States between April and June will be unveiled on Thursday, at the same time that the number of deaths related to the Covid-19 is the highest in the country.

With factories shut down for several weeks, the shops and restaurants closed, business districts entirely deserted white collar workers, the Great confinement, which began in mid-march in the United States, has stopped in full run an economy in good health.

Millions of Americans have lost their jobs and are still unemployed in a labour market affected.

After having declined 5% in the first quarter, the gross domestic product (GDP) has recorded a historic fall in the second quarter.

The first estimate of the administration Trump will be published on Thursday, and the figure looks staggering: between -35%, according to a consensus of analysts, and -37%, according to the international monetary Fund (IMF).

Whatever it is, it will be “far (from) the strongest quarterly declines, which date back to 1947”, according to Ben Herzon, a senior economist for the firm IHS Markit, which calls for a decline of 35.3%.

For comparison, “the worst quarter of the Great Recession was the fourth quarter of 2008, when real GDP contracted 8.4% annual rate”, he added.

Rising unemployment

For all of the year 2020, the expected reduction of 6.5 per cent, before a rebound of 5% in 2021, and more modest growth (3.5 per cent) the following year, according to forecasts released in early June by the u.s. central Bank.

The economic adviser of the White House, Larry Kudlow, sees 20% for the third and fourth quarters 2020.

The activity has been reduced to the minimum in the country in April, but has started to rebound gradually, state by State, starting in may.

Real estate, retail sales, automotive… The first economy has rebounded in the month of June.

But the upsurge of cases of Covid-19 in the country, particularly in the south and the west, from the end of June, has pushed a large part of the country to put a brake on the re-opening, or even reconfiner partially.

Direct consequence: new entries in unemployment were recorded in mid-July, their first increase since the end of the month of march.

The figures for last week will also be published Thursday, will show whether there was an increase in isolated or well the start of a trend.

150 000 dead

Less than 100 days to the presidential election, Donald Trump, who is running for a second term in the White House, put a lot on the rebound of the economy.

He posed as a victim of critics deemed to be unfair on its management of the pandemic, which has claimed more than 150,000 deaths in the United States, by far the most affected country.

“This pandemic is the biggest shock to the u.s. economy of human memory”, from “the lowest unemployment level in 50 years, at the highest levels for 90 years, and that in a couple of months ago,” he pointed out Wednesday, the chairman of the us federal Reserve system, Jerome Powell.

The institution, which has unsurprisingly held Wednesday rates the lowest, at zero, recalled that her support for as long as necessary for the american economy.

But, she has also pressed the government to financially assist businesses and households who are struggling to escape the head of this crisis.

As well as, pointed out Jerome Powell, the crisis has not equally affected all Americans (…) the rise in unemployment has been particularly virulent for low-income workers, women, and for African-Americans and Hispanics”.

Control the virus is a condition sine qua non for a true recovery, he still pointed out. For the time being, the outbreak of contamination slows down the activity since the end of the month of June.

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