The Covid-19 pandemic will end ten years of uninterrupted economic growth in the United States. A historic recession is expected in 2020 across the Atlantic, caused by the crisis linked to the new coronavirus, which has already killed more than 58,000 people in the country, a toll now exceeding the number of American soldiers killed in two decades during the conflict in Vietnam .

The publication, Wednesday, April 29, of gross domestic product (GDP) of the first quarter and forecasts of the central bank will give a first idea of ​​the extent of the crisis.

"The tip of the iceberg"

If analysts expect a 4.3% annual decline in GDP in the first three months of the year, the budget departments of Congress - the CBO, an independent agency - are them less pessimistic and s' expect a 0.9% decline in the first three months of the year.

Anyway, this decline "will be the tip of the iceberg," warned Kevin Hassett, Donald Trump's economic advisor, on CNN Tuesday morning. The coming months will experience falls "such that they will not look like anything you have ever seen," he added.

The extent of the damage caused by the Covid-19 pandemic on the American economy will not be visible until April. This discrepancy is mainly explained by the fact that massive containment measures aimed at combating the spread of the virus were taken in the second half of March only.

Schools, bars, restaurants, shops and establishments deemed non-essential have gradually had to put their activity on hold, and in five weeks, more than 26 million people have registered as unemployed. A new figure.

The last biggest drop in GDP dates back to 2008

The forecasts for the second quarter are even more worrying. GDP could drop 11.8% from the first quarter, which would drop 39.6% from the second quarter of 2019, according to the CBO.

The speed and extent of the recovery in economic activity is still uncertain. To limit the impact of the health crisis and the economic breakdown, some states such as Georgia and Texas have already authorized the reopening of businesses. The relaxation of containment will be done state by state.

Certain sectors are particularly affected by the paralysis of the economy. This is particularly the case for air transport, for which a return to the level of 2019 could take several years.

The last biggest drop in GDP dates back to the fourth quarter of 2008, when it tumbled 8.4%. After a year and a half of recession, growth returned in late 2009.

Avalanche of Fed measures

At the end of its monetary committee, Wednesday, the US Federal Reserve (Fed) could give its forecasts for the first world economy, eagerly awaited by the markets.

"I think they will say: the economy is deteriorating at breakneck speed and the outlook is very uncertain," said Michael Feroli, chief economist at JP Morgan.

The latter feared that the members of the monetary committee would not venture "to take a firm position on the economic outlook, partly conditioned by elements of public health beyond their control".

The US central bank, which meets its monetary committee every six weeks, should not touch interest rates this time. She had lowered them to zero in mid-March, faced with the spread of the virus. A measure she hadn't used since the last recession in 2009.

The Fed has also launched an avalanche of measures. Among them, a series of usual tools, but also new products aimed at reassuring the markets and giving a breath of fresh air to businesses and households.

Over the whole of 2020, the decline in GDP could be 5.6%, thanks to a timid recovery from the summer, estimates the CBO. The International Monetary Fund, meanwhile, expects a contraction of 5.9%.

With AFP

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