Wall Street falls sharply amid fears of a second wave of contagion in the US | Economy

Wall Street has been invaded this Thursday by the storms of a second wave of coronavirus infections in the United States. The New York Stock Exchange, which had traded higher in recent days, fueled by the illusion of a rapid recovery in the economy, closed the day with sharp falls: the Dow Jones fell 6.9%, the worst figure since March, the S&P 5.8% and the Nasdaq technology 5.2%. In addition, the world power continues to suffer the collapse of the labor market due to the economic slowdown to prevent the spread of the virus. Last week 1.5 million people applied for state unemployment benefits, which amounts to 20.9 million people receiving aid, as reported by the Labor Department on Thursday. The figures also reveal that one in nine employees laid off since mid-March has been rehired.

The gradual reopening of the States threatened by new spikes in contagion, added to the negative forecasts of the Federal Reserve, which projects that unemployment in the US will not drop below 5% until at least 2023, managed to destroy investor optimism. Coronavirus cases in the country have exceeded two million this Thursday, and the number of deaths is already over 111,000, according to data from Johns Hopkins University. Some cities in California, Arizona and Texas have spikes in contagion after governors lifted some restrictions to get the economy back on track.

For the tenth consecutive week the destruction of jobs due to the coronavirus crisis is reflected in aid applications, although the trend is downward. The decline in petitions reflects that workers who were laid off in March at small businesses or restaurants have regained their jobs. The figure aligns with the fall in unemployment to 13.3% in May, after having registered 14.7% in April, the highest number recorded since the Great Depression.

State benefits represent about $ 375 per month on average per beneficiary. But during the coronavirus crisis, Congress approved an extra aid of $ 600 that runs through July 31. The House of Representatives, led by Democrats, has already given the go-ahead to extend it for another six months, however, the Republicans, who control the Senate, do not see it clearly. Donald Trump’s party argues that many workers who became unemployed are now earning more than when they were working, and that extending extra aid can discourage job search and reviving the economy.

The bad news in the economic sphere has stained the entire week. The United States entered a recession in February, when it ended the greatest period of growth in its history – since June 2009 -, as reported on Monday by the National Office of Economic Research (NBER). For its part, the World Bank released a report predicting that it will be the worst recession since World War II and that the US economy will contract 6% this year.

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