Washington (AFP)

The resurgence of Covid-19 cases in several regions of the United States raises fears of a much more damaging second wave that would slow the slow economic recovery at the same time that employment picks up some colors.

Fear of a second wave shakes entrepreneurs and investors, but "we cannot close the economy again," warned US Secretary of the Treasury Steven Mnuchin when interviewed on CNBC.

"I think we have learned that if you stop the economy, you create more damage," he added, referring to the "economic damage" but also the medical difficulties, "and everything else" .

The American economy has been in recession since February, a direct consequence of containment measures and the shutdown of whole swathes of economic sectors.

Steven Mnuchin assured that the testing and hospital capacity was now sufficient to avoid further containment.

After reaching a plateau, the United States, which has recorded more than 113,000 deaths, is facing an increase in cases recorded in several states whose activity restarted in April.

In Texas and North Carolina, there are currently more Covid-19 patients hospitalized than a month ago. Arizona, Florida and California are also showing worrying signs.

This bad news made Wall Street tumble. Its flagship Dow Jones index yielded 5.45% around 5:40 p.m. GMT.

- Trump criticizes the Fed -

This resurgence in the number of patients could thwart the slow economic recovery started by the United States by undermining a key element: confidence.

In a second wave, "you could see a loss of public confidence in sectors of the economy that are already slow to recover. This could hamper recovery even if you don't have a pandemic nationwide, just a series of local pandemics, "said Federal Reserve Chairman Jerome Powell on Wednesday.

The Fed expects a drop in gross domestic product of 6.5% in 2020, before a strong rebound of 5% in 2021 and more modest growth (3.5%) the following year. In December, it forecast growth of 2% this year and 1.9% next year.

"The Federal Reserve is so often mistaken. (...) We will have a very good third quarter, an excellent fourth quarter and one of our best years in 2021," President Donald Trump tweeted Thursday morning, reconnecting with his criticism of the Fed, of which it is customary.

His economic advisor Larry Kudlow for his part advised Jerome Powell to smile more and to show "a little more optimism".

"I'm going to talk to him and we'll do some media training," he said on Fox Business.

He also considers it necessary to "put in place as much budgetary aid as possible for the future, so that we can return to where we were last winter", when the world's largest economy displayed iron health.

- Fewer unemployed registrations -

The situation is slowly improving on the employment front. Unemployment registrations have been declining every week since the historic record of 6.8 million applications recorded at the end of March.

But the number of unemployed remains exceptionally high, and last week, just over 1.5 million Americans have spiked unemployment, a level still seven times higher than before the crisis, according to published figures Thursday by the Labor Department.

The number of people receiving benefits is also down slightly, with 20.9 million people receiving unemployment benefit in the last week of May.

The situation "is moving in the right direction, but slowly. The shock of the coronavirus pandemic in the labor market persists," noted analysts at Barclays in a note.

According to the Fed, the unemployment rate will be 9.3% in 2020, then fall slowly, to 6.5% in 2021 and 5.5% in 2022. This is almost double its level before the pandemic.

© 2020 AFP