American economy today: The worst may yet come!
Unemployment is falling, consumer spending is rising again. What suggests a rapid recovery in the economy, however, could only be a brief rebound before the big bang. So far, the markets have cared little – but that could change.
At the beginning of June, a downright euphoric Donald Trump stood in the rose garden of the White House and assessed the corona pandemic as “largely over”. Before the crisis, the USA had the “greatest economy in world history”, “and this strength has allowed us to survive this terrible pandemic,” declared the US President, confident as ever. The economy will soon grow like a “rocket” again, he added.
The reason for this already dubious confidence in the customarily excessively exaggerated superlative rhetoric was what Trump himself described on Twitter as a “really great job market report”.
But regarding the American economy today, contrary to many forecasts, the unemployment rate in May fell from 14.7 percent in April to 13.3 percent. In fact, this recovery, albeit a small one, came as a surprise and after the record rate from April, gave hope that the horror forecasts of some experts, who spoke of up to 20 percent, would probably not come true after all. The labor market report for June was immediately even “better”. The rate fell again and was only 11.1 percent.
But appearances are deceptive. The June numbers about the American economy today, were collected before the number of new infections rose sharply towards the end of the month, so they could long be out of date. In the negative sense, of course, because the increase in the number of infected people has continued and is now reaching new records every day.
The US chief virologist Anthony Fauci assumes that the number could even double, to 100,000 new cases a day. So far, 7,600,846 people in the United States have been infected with SARS-CoV-2, 214,277 Americans have died from or with the disease.
The dramatic development of the number of cases in the past few days is likely to hit the delicate plants of the upswing and drive them back into the ground. Where others fear a second wave, the first in the USA has really picked up speed again. Almost half of all states have already withdrawn the easing they had granted.
Even in Texas, which is considered to be very conservative, where personal freedom is always very important, mouthguards are now mandatory. Bars and restaurants, including many beaches, have to close again in many places. The unemployment rate will increase again. many companies have begun to cut their employees’ wages, which is a bad sign for the American economy today.
In addition, the total number of hours worked has stagnated in the severely affected country since May and the upswing index calculated by Oxford Economics has lost momentum.
In addition, many government aid measures are still taking effect, which to date have prevented many catastrophes but will soon expire. For example, unemployment benefit subsidies were only available until the end of July.
How exactly all of this will affect the American economy today in the coming months is difficult to predict, certainly not positively. In any case, a large-scale, long-lasting shutdown in the USA could also have a serious impact on the global economy.