[Global Times reporter Zhang Mengxu has a heavy responsibility] In the second quarter, the U.S. economy experienced the largest recession since data records are available after World War II. On July 30, local time, the first estimate released by the US Department of Commerce showed that the US gross domestic product (GDP) in the second quarter of this year fell by 32.9% annually, the largest since the 1940s. Drop. The day before, the cumulative number of deaths from new coronary pneumonia in the United States exceeded 150,000. "This is another milestone." Until today, there is still no turning point in the US epidemic. The "V-shaped economic recovery" expected by the Trump administration is not favored by economists, and the vaccine that can really control the virus may not be widely used until next year. After announcing the GDP figures for the second quarter, Trump meaningfully sent a tweet suggesting to voters to "postpone the general election" until conditions "vote normally and safely". It is currently unknown whether Trump’s proposal will be approved by Congress, but what is certain is that the United States’ poor response to the new crown pneumonia epidemic has become the biggest risk to the continued recovery of the global economy. "The Wall Street Journal" said on the 30th that due to the forecast that the US GDP in the second quarter will set a record for the largest contraction since World War II, the major stock markets in Asia and Europe generally fell on Thursday from Hong Kong and Tokyo to Berlin and London.
The biggest quarterly recession after World War II
Fed Chairman Powell said that the second quarter GDP of the United States was "the most ugly data on record." Bloomberg News Agency said on the 30th that the US economy had stagnated almost throughout April. Now the world understands the depth of this shrinkage. "The U.S. economy has fallen off the cliff again." Reuters quoted economists’ statistics on the 30th, stating that the U.S. real GDP in the first two quarters of this year fell by about 11% year-on-year, bringing real GDP back to the lowest level in mid-2014, which is equal to Erase the growth over the past five years.
According to Bloomberg, the reason for the slowdown in GDP growth is that Americans stay behind closed doors and do not spend on eating out, shopping in physical stores and travel, which has led to a sharp drop in consumer spending, which usually accounts for about two-thirds of GDP. Bloomberg News Economist Hesby said that the blockade implemented from March to April caused a sharp drop in consumer spending. With the lifting of restrictions, the initial recovery was rapid, but due to the re-emergence of new coronary pneumonia cases and the suspension or cancellation of the reopening plan, the recovery will still be partial. In addition, not only personal consumption, a 40% drop in residential investment, a 50% drop in equipment expenditures, and a decrease in net exports and an increase in inventories may all have contributed to the shrinking GDP growth rate.
"Americans’ concerns about the spread of the crisis prompted them to tighten their wallets." USA Today reported that people originally thought that large-scale federal stimulus expenditures should promote economic growth, but Wells Fargo’s data showed that taxes and other income Declines, school closures, and sharp declines in state and local spending will greatly offset the above boosting effects. Barclays U.S. chief economist Miller said that the blockade policies of other countries may hit U.S. exports, while imports are basically unaffected, all of which will lead to a larger trade deficit and harm economic growth.
CNN commented that the blockade of the epidemic this spring plunged the United States into the first recession in 11 years. The GDP decline in the second quarter was almost four times that of the peak of the financial crisis, when the economy contracted in the fourth quarter of 2008. That’s 8.4%. The combination of public health and economic crises is unprecedented. "The numbers cannot fully reflect the difficulties faced by millions of Americans." The US CNBC website quoted Moody’s chief economist Zandi as saying that the report “only highlights how deep and dark the abyss the economy fell into in the second quarter. This is a very deep black hole, and we are coming out of it. But it takes a long time to come out".
More than 150,000 deaths
The cumulative number of deaths from new coronary pneumonia in the United States exceeded 150,000 on the 29th. "This is a milestone," CNN commented. At the same time, the daily death toll in the United States is also rising rapidly. On the 29th, the number of deaths from single-day new crown cases in the United States hit a two-month high, reaching 1,456 people. About one person died of the disease every minute.
The number of 150,000 shocked the United States. Harvard University’s Global Health Institute Director Jaha said: “As a country, we have not been able to control this problem and have not taken measures to prevent these deaths. This is even more frustrating, sad and angry. We urgently need to find a way to prevent the next 150,000 people died."
The "New York Times" article stated that the United States is now a wounded country, full of sadness and frustration. I have never thought that so many funerals are being held. According to reports, most of Europe, which was hit by the epidemic earlier than the United States, is now recovering and reopening, "which is not the case for us." Osterholm, an infectious disease expert at the University of Minnesota, believes that only a nationwide blockade can completely contain the virus, but this is politically impossible.
According to USA Today, people once expected that employment growth, consumer spending and other key indicators might rebound sharply in May and June after bottoming out in April, but the number of new coronary pneumonia cases in the southern and western parts of the United States has surged. It has prompted at least 20 states to suspend or cancel plans to reopen, thus inhibiting the expected recovery in the second half of this year.
On the 30th, the U.S. Department of Labor released the latest data showing that the number of people applying for unemployment benefits for the first time in the United States last week was 1.434 million. This is the first time that the number of people applying for unemployment benefits in the United States exceeded 1 million for 19 consecutive weeks. And these unemployed people's weekly subsidy of $600 will expire this Saturday. According to Reuters, the current situation in the United States is very cruel: the first round of stimulus measures promised by the government of $3 trillion to support the economy will soon expire, while the number of new coronary pneumonia cases is still soaring to a record high.
The United States sneezes, the world catches a cold
"When the United States sneezes, the world catches a cold," Reuters said on the 30th. If it was the US policy that pushed the world economy to a higher level, now it is the US policy that threatens and drags down the entire world. The US GDP accounts for about 1/4 of the world's GDP. The loss of jobs will lead to reduced consumer spending and lower imports; poor corporate economic conditions will lead to a decline in equipment investment or a reduction in inventory, and these equipment and inventories are usually outside the United States Local production.
On Thursday, Germany also announced its second-quarter GDP, which was down 10.1% from the previous quarter, the worst recession since 1970. French car manufacturer Renault announced on Thursday that its net loss for the first half of the year reached a record 7.3 billion euros. Reuters said officials from various countries from Mexico to Japan were anxious. German exports have been hit, and Canada is also cautiously watching the situation in the southern United States. Felbermeier, director of the Institute for World Economics in Kiel, Germany, said bluntly that the United States is really "disappointing." Japanese economist Hideo Kumano said, "If the United States fails to prevent the spread of the epidemic, Japan's recovery will be seriously delayed, and Asian exports to the United States will not increase."
Canadian "Financial Post" reported that the International Monetary Fund (IMF) predicts that the US GDP will shrink by 6.6% this year, and that the next few months and even years will be difficult for the world. What is particularly worrying is that the number of new crown cases is still on the rise. “The risk in the future is that a large part of the US population will have to deal with a sharp decline in living standards and serious economic difficulties in the next few years. This may further weaken it. Demand has exacerbated the long-term resistance to global economic growth."
According to a report by Singapore’s Lianhe Zaobao on the 29th, the latest World Bank report predicts that China’s economic growth rate will slow down sharply to 1.6% this year, the lowest growth rate since 1976, and will rebound to 7.9% in 2021. The World Bank’s July China Economic Bulletin also emphasized that repeated epidemics may continue to disrupt China’s economic recovery. From an external point of view, the deepening of the global economic recession, the prolonged duration, and the escalation of bilateral tensions between China and some of its major trading partners may all derail China's economic recovery.
Trump's 3% economic growth promise is difficult to fulfill
US President Trump tweeted on Thursday suggesting postponing the 2020 election, citing the reason that the epidemic would lead to "fraudulent" votes. "Postpone the election until people can vote normally and safely?" He suggested in a tweet that using mail to vote is inaccurate and will cause fraud and "bring great embarrassment to the United States."
However, the British "Daily Telegraph" quoted a constitutional expert as saying that Trump has no right to unilaterally postpone the election, and he must seek the approval of Congress to do so. According to the New York Times, the Republican leaders have avoided responding to the "postponement of the election," and the possibility of postponing the election is very small.
Bloomberg said that before the outbreak, Trump’s goal was to maintain a 3% economic growth rate. Now, the new crown virus has left a mark on his economic legacy-the economy has entered a recession, and it is the worst single-quarter GDP decline on record. The third-quarter GDP data, which is expected to rebound, will be released on October 29, five days before the polling day. "Trump knows the timing very well."
However, Reuters on the 30th used "gloomy prospects" to describe the economic growth prospects of the United States in the third quarter. According to the article, despite the increase in economic activity since May, due to the continuous increase in the number of new coronary pneumonia cases, the momentum of resumption of work has to slow down, especially in the densely populated southern and western regions of the United States. The epidemic has forced the authorities to shut down businesses and suspend operations again. This weakened hopes for a sharp rebound in growth in the third quarter.
"Trump's V-shaped rebound dream is slowly disappearing." The U.S. Political News Network said on the 30th that the U.S. economy has experienced a historic collapse this year. The epidemic has hit companies hard and caused the unemployment rate to soar. Trump once regarded the economy as the most powerful selling point for voters so far, but the question he currently faces is how much the economy can recover in the months before the election. At least for now, the surge in new crown cases, the possible new outbreaks this fall, and the fierce debate about how to inject more federal funds into the weak economy all indicate that the sharp rebound that Trump is counting on may not be in the way he imagined. appear.