Coronavirus. US economy fears second wave of contamination

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

Fear of a second wave shakes entrepreneurs and investors, but “We cannot shut down the economy again”, warned the American secretary of the Treasury Steven Mnuchin, questioned on the CNBC chain.

“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 all the rest “.

Sufficient testing capacity

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 capacity of tests and hospitals was from now on sufficient to avoid a new 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, like Georgia.

Bad news

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

Fayetteville Washington Hospital in Arkansas released a statement on Wednesday, reporting more than a tripling of the number of Covid-19 patients hospitalized, not only because of the increased number of tests, but “Because more people in our region are infected with the virus”.

This bad news tumbled Wall Street, which had its worst session on Thursday since its plunge in March. Its flagship index, the Dow Jones Industrial Average, tumbled 6.90%.

Perte of confidence

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 case of a second wave, “You may see a loss of public confidence in sectors of the economy already slow to recover. It could hurt recovery even if you don’t have a national pandemic ”, only locally, said the president of the American Federal Reserve (Fed) 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. In December, it forecast growth of 2% this year and 1.9% in next year.

Trump criticizes the Fed

“The Federal Reserve is so often wrong. (…) 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, reviving his criticisms of the Fed, which he is used to.

The Federal Reserve is wrong so often. I see the numbers also, and do MUCH better than they do. We will have a very good Third Quarter, a great Fourth Quarter, and one of our best ever years in 2021. We will also soon have a Vaccine & Therapeutics / Cure. That’s my opinion. WATCH!

– Donald J. Trump (@realDonaldTrump) June 11, 2020

His economic adviser Larry Kudlow for his part advised Jerome Powell to smile more and to show“A little more optimism”. “I’ll talk to her and we’ll do some media training”, he quipped on Fox Business.

Larry Kudlow also considers it necessary to “Put together as much budget aid as possible for the future, so that we can return to where we were last winter”, when the first economy in the world displayed iron health.

Fewer unemployed registrations

The situation is slowly improving on the employment front. Just over 1.5 million Americans were unemployed last week, still seven times higher than before the crisis, but well below the historic high of 6.8 million claims registered in the past week. of March, according to figures released Thursday by the Labor Department.

And 20.9 million people were receiving unemployment benefit in the last week of May, down slightly.

The situation “Moving in the right direction, but slowly. The shock of the coronavirus pandemic on the job market persists “, Barclays analysts said in a note.

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

– .