Nearly 155,000 deaths occurred in the second quarter, and GDP plummeted in the second quarter
Both the US's anti-epidemic and economic restart suffered setbacks (Global Hotspot)
Severely hit by the new crown pneumonia epidemic, the U.S. economy experienced the largest recession since data records were available in 1947 in the second quarter. 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 fell by 32.9% at an annual rate. At the same time, there is still no turning point in the US epidemic. According to real-time data from Johns Hopkins University in the United States, as of 7:30 on August 3, Beijing time, the cumulative number of confirmed cases of new coronary pneumonia in the United States exceeded 4.662 million, and the cumulative number of deaths was nearly 155,000.
"The United States has failed miserably in the face of the epidemic and the economy." Paul Krugman, a well-known American columnist, lamented in an article in the "New York Times". As the world's largest economy, the United States' severe economic recession and out-of-control epidemic situation have brought many variables for the world to completely overcome the epidemic and achieve economic recovery.
"The most ugly data"
Fed Chairman Powell said that the second quarter GDP of the United States was "the most ugly data on record."
CNN commented that the lockdown of the epidemic this spring has plunged the United States into its first recession in 11 years. The GDP decline in the second quarter was almost four times that of the peak of the financial crisis. The combination of public health and economic crises is unprecedented. "The numbers cannot fully reflect the difficulties faced by millions of Americans."
In order to save the economy, the United States has introduced an economic assistance program totaling 2.2 trillion US dollars, which can be called "helicopter money." But this has not stopped the economic downturn.
"The U.S. economy has fallen off the cliff again." Reuters quoted economists’ statistics as saying that the U.S. real GDP in the first two quarters of this year dropped by about 11% year-on-year, bringing real GDP back to the lowest level in mid-2014, which is equivalent to erasing Over the past 5 years.
Zhang Yuquan, deputy director of the Center for American Studies at Sun Yat-sen University, told reporters that in the context that the US economy has not yet been completely closed, the US GDP in the second quarter has fallen so severely, which is worrying. It is conceivable that if the United States completely shuts down its economy, GDP will fall further. The downward trend in US GDP has not yet bottomed out, which is the most worrying.
Not only GDP data, but various economic data in the US are not optimistic. According to data from the US Treasury Clock, the size of the US national debt has exceeded $26 trillion, equivalent to 121% of the US GDP in 2019. This means that since the beginning of 2020, the total amount of US national debt has increased by nearly $3 trillion. At the same time, the US finances are also in a huge "deficit." According to US official forecasts, in the current fiscal year ending September 30, the US fiscal deficit will reach 3.7 trillion US dollars, an increase of 275% over the previous fiscal year.
CNN said that despite the rebound in the labor market due to the reopening of the economy in some states, the unemployment rate in the United States will still reach 10.3% in July, which is higher than the highest level during the 2008 financial crisis. At the same time, thousands of U.S. companies have entered bankruptcy courts, including hundreds of years old stores, iconic brands, and industry giants with assets of more than ten billion U.S. dollars. Data show that as of the end of June, more than 3,600 companies in the United States have filed for bankruptcy, a year-on-year increase of 26%.
On July 31, local time, the international rating agency Fitch announced that it would lower the outlook for the US sovereign credit rating from “stable” to “negative”. Fitch is pessimistic that the US GDP will shrink by 5.6% in 2020. In 2020, the US fiscal deficit will exceed 20% of GDP; by 2021, the US public debt will exceed 130% of GDP.
"The US GDP data for the second quarter is not unexpected." Wang Yong, director of the Center for International Political Economy Research at Peking University, told reporters that the epidemic is the most important factor affecting the US economy. Anti-epidemic measures such as lockdowns, quarantine at home, suspension of work and production, have restricted social and economic activities. In addition, the US economic downturn has a lot to do with changes in its economic structure over the past 30 years. In recent years, the U.S. economy has been highly service-economyized, and the service industry accounts for 80% of the U.S. economic structure. The service industry is most vulnerable to the epidemic.
Zhang Yuquan said that the epidemic has caused a decline in economic production and a sharp drop in consumption, which has seriously affected people's normal travel and communication. The sharp drop in social consumption has a huge impact on the US economy.
The New York Times published an article that 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 epidemic, but this is politically impossible.
On July 29, the cumulative number of deaths from new coronary pneumonia in the United States exceeded 150,000. "This is a milestone," CNN commented that the daily death toll in the United States is still rising rapidly.
"The policy mistakes of the US government are an important cause of the economic downturn and the downturn of the epidemic." Wang Yong said that the US government underestimated the severity of the epidemic at the beginning and adopted anti-epidemic measures relatively late and not resolute. In addition, in the first stage of the epidemic prevention and control effect is not yet obvious, the US government is eager to promote the resumption of work and production, resulting in no obvious signs of economic recovery, but the epidemic has shown an expansion trend.
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. In addition to personal consumption, residential investment fell by 40%, equipment spending fell by 50%, and net exports decreased and inventories increased, which may 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 a large-scale federal economic stimulus plan should promote economic growth, but Wells Fargo’s data showed that taxes and other Falling incomes, school closures, and sharp declines in state and local spending will greatly offset the boosting effects of the economic stimulus plan.
"Very deep black hole"
The US CNBC website quoted Moody’s chief economist as saying that the data “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 getting out of it, but it takes a lot of time. It takes a long time to come out".
Reuters used "gloomy outlook" on July 30 to describe the economic growth prospects of the United States in the third quarter. According to the article, although economic activity has increased since May, due to the continued increase in new coronary pneumonia cases, the momentum of resumption of work has to be slowed, especially in the densely populated southern and western regions of the United States. The epidemic has forced the local government to shut down businesses and suspend again. Open. This weakened hopes for a sharp rebound in growth in the third quarter.
"The United States sneezes, and the world catches a cold." Reuters said on the 30th that if it was the U.S. policy that pushed the world economy to a higher level, now it is the U.S. 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.
Reuters said officials from various countries from Mexico to Japan were anxious. German exports have already suffered, and Canada is cautiously watching the situation in the United States. 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 in the coming months and years, life around the world will be difficult.
Zhang Yuquan said that preventing and controlling the epidemic and restoring the economy are a dilemma. If the most stringent epidemic prevention and control measures are taken, the openness of the economy will be sacrificed. The Trump administration has made every effort to promote economic opening and try to minimize the severity of the epidemic. But only if the epidemic is effectively contained, will there be greater possibilities for economic recovery. The US government is now pinning its hopes on the vaccine, but the vaccine will not be successfully developed until at least next year. If the anti-epidemic policy is repeated and hesitated, it will only make the economic recovery slower and more lives lost.
"2020 is the U.S. election year and also the year of the pandemic. Various uncertain factors are intertwined and aggravate international tensions." Wang Yong said that the United States is the world's largest economy and a relatively open import market. In the era of economic globalization, the US economy has been hit hard by the epidemic, which has a great impact on global trade and economic recovery. Global economic recovery requires new economic growth methods, new power and new markets. Countries in the world should adapt to the new global economic environment as soon as possible and tap new market potential and economic growth points.