DAs a result of the Corona crisis, the American economy has shrunk faster than ever since the relevant statistics were collected in 1947. The gross domestic product of the world’s largest economy decreased by almost 10 percent in the period from April to June compared to the previous quarter.
According to the calculation method customary in America, this results in a year-on-year decline in GDP of 32.9 percent – this is the official number, which the US Department of Commerce just announced in a first estimate. Experts interviewed previously had predicted an even sharper decline on average. They assumed an annualized GDP decrease of more than 34 percent.
“It will be a long time before the American economy comes out of the deep valley of tears. Persistently high infection rates and mass unemployment create considerable uncertainty, ”commented Bastian Hepperle, economist at Bankhaus Lampe, and added:“ This paralyzes private consumption and investments. ”
High infection numbers
As a result of the coronavirus pandemic, many stores and factories in the United States have also been temporarily closed, or at least had to severely curtail their production. This particularly burdened consumption, which traditionally represents a large part of the country’s economic activity.
As a result, President Donald Trump’s government has ordered trillions in aid to both businesses and Americans who have lost their jobs. After the pandemic broke out, tens of millions of Americans lost their jobs in no time.
Democrats and Republicans are currently arguing over another major stimulus package to support the economy. While many other countries were able to narrow their infection numbers after a sharp “lockdown”, they remained high in America or even increased.
Experts now often no longer assume that the economic downturn will be followed by a rapid recovery, but that this process will drag on. “GDP will probably not reach the pre-crisis level again until early 2022,” predicts Commerzbank economist Christoph Balz. The recovery should lose momentum in the third quarter. “High-frequency data on employment, restaurant visits, hotel accommodation and mobility, for example, already indicate that the new wave of infections is causing many consumers to hesitate again,” the expert continues.
He also expects that “the previously extremely generous special payments to the unemployed will be reduced, which will dampen private consumption”. In addition, it is becoming increasingly clear that many jobs in the crisis have not only disappeared temporarily, but have disappeared permanently.