Figures began to reveal this Thursday the hard impact of the pandemic of the coronavirus in the United States economy and the beginning of what would be a deep recession which ended the longest period of growth in the country’s history.
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The American economy contracted 4.8% in the first quarter of this year, its biggest drop since the Great Recession of 2008, the Commerce Department reported. This is due to the fact that consumer spending –one of its main engines– stopped sharply at the end of that quarter when the spread of the coronavirus forced the general closure of stores, shops and restaurants, and restrictions were imposed for people to stay. at home.
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Precisely consumer spending contracted 7.6%, its biggest decline since 1980, according to official data. But overall, almost all components of the economy suffered a setback in the first quarter.
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“The contraction in real Gross Domestic Product in the first quarter reflects declines in personal consumption, non-residential investments, exports and investments in private inventories “said the government.
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In the area of personal spending, spending on services, such as toilets, and goods, such as motor vehicles, contracted mainly, he added. In exports, the reduction in travel hit harder, which practically stalled to contain the spread of the coronavirus.
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An uncertain recovery
The economic activity figure adds to the historic numbers of people who have applied for unemployment benefits in the past five weeks, which already number more than 26 million and they reflect a scourge that increased in late March and throughout April.
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The number, however, was in line with that anticipated by analysts.
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“The magnitude of the second-quarter hit is more uncertain, as is the way (of recovery) crucial.”4CAST economists in Washington DC said.
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Over the weeks, the consensus has grown that it will be a U-shaped recovery, which takes 6 to 12 months, and the expectation that it will be a rapid of between two to three months has lost strength.
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Currently, some states have begun to relax their physical distance restrictions in a bid to reactivate their economies, and others are considering doing so in the coming weeks. However, it is uncertain how quickly people will feel safe going out to shop or resume their normal activities without a covid-19 vaccine or treatment yet.
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