Record economic growth ended before the coronavirus pandemic was declared a national emergency, writes Fox News.
The US economy may have entered a recession even before the Federal government began to issue strict guidelines associated with the constraints due to coronavirus and social distancing that was forced to close many businesses throughout the country.
According to a new report by the National Bureau of economic research (NBER), the peak in economic activity occurred in February, after which a 128-month record period of economic growth came to an end and the recession began.
Growth began in June 2009 and was the longest since 1854.
As for the quarterly peak of economic activity, NBER argue that it occurred in the fourth quarter of 2019. The fact that the monthly and quarterly peak does not match, is “unusual nature” of the recession, noted in the NBER.
The researchers noted that although the economic downturn is usually determined a few months, they came to the conclusion that “an unprecedented reduction in employment and output and wide coverage of the entire economy” to justify this concept. Employment and domestic production are the main indicators used to measure economic activity.
Since February, the coronavirus pandemic has caused devastating damage to the U.S. economy — more than 42 million Americans filed applications for unemployment benefits, the level of which is about 13.3% compared to 14.7% in April.
In may, when some of the us economy began to re-open, the economy was restored 2.5 million jobs, which indicates a possible start of recovery of the labor market.
But despite this, experts warn that a second wave of coronavirus could pose a serious threat to the economy of the United States, notes Fox News.
Published June 8 monthly survey by the National Association of business Economics (NABE) found that 87% of economists believe a second wave of coronavirus is the main risk for the US economy this year.
According on 9 June, the virus has killed more than 113,5 thousand Americans are sick more than 2 million.
“With the exception of a possible second surge Covid-19, the overall U.S. economy may have turned for the better, as evidenced by the unexpected growth in jobs, although it remains to be seen how it will look like the new normal indicator”, — said Tony Bedikian, head of global markets at Citizens Bank.
Despite the promising report, 80% of NABE respondents said they are pessimistic about the economic prospects of the United States.
It is expected that by the last quarter of the current year the gross domestic product, the broadest measure of goods and services produced in the economy will shrink by 5.6 percent — the sharpest decline since the Second world war, after the disastrous fall of 33.5% according to the second quarter.
Most economists expect the country will return to pre-crisis levels, at least until the second half of 2021.
51% of economists believes that the vaccine against the virus is the best factor that can help the US economy, while 29% said that they consider this factor policy testing and tracking, which will mitigate the spread of the virus and provide a broader re-opening of businesses in the country.
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