Topic: The U.S. economy contracted sharply in the first quarter of 2020 (Read 830 times)

I waited for a week before commenting on this and experience on my own how the economy would react once things opened, as in my current country we're almost on the last few restrictions which don't really affect the economy that much.

From the start I was a bit pessimistic, or should I say optimistic about that 40% downturn, I don't think it will come near that.

Here we're experiencing some sort of relaunch and I'm not really sure it's just a dead cat bounce, as it seems like a real start over.
Constructions are back almost at full power, almost all the construction sites in the new neighborhood east of the city are working full time, most of the factories except the ones with cases are working between 75-100%, and it seems that a whole start-up almost at the same time in Europe has managed to keep the logistic chains working without many hiccups.
Of course, there is tourism, but we're relying more on city breaks than full 7-12 days holidays, and most of our tourists are also from the EU, so we won't be suffering like other countries which must convince them to fly 12 hours and not be scared of the thoughts of getting stuck abroad.

The US might be hit harder, but I doubt even with those numbers regarding unemployment that this crisis will be indeed the biggest and worst we have seen in the last centuries. As for the response against the virus, I love how the democrats and other leftist papers in Europe are criticizing Trump but they are so quiet about Sweden, every democrat, when asked what economic/healthcare/policing model should be followed, is pointing to Sweden but this time their fingers are frozen stiff.

 

Easing the lockdown and letting people go back to their job might be a good idea if they are to help their economy rise back. But another bad news is that many people have lost their jobs because of this coronavirus. And apart from that they are having a serious protest (should I really count that in, cause there are other countries doing the same?).

But, I believe when the economy is opened and people starts working again, it’s going to help boost the economy again. It has been this same way for most countries, and a lot of people fear that there will be a recession soon. In my country it’s going to be the issue of food because there is no way to import since borders are closed.

What precautions and limitations are you talking about if people have nothing to eat. Here only if the fence around your house is big to put. But maybe you meant that the states of all countries should get together and make decisions that will save people. Turn to wealthy people in your own country. Are the poor so much worse than the rich that they must starve to death?

Already in the first quarter of 2020, US GDP fell by almost 5%. In addition, many economic experts express their opinion that the US economy has already theoretically reduced by 40%. almost 26 million people applied for unemployment benefits. These are only hypothetical data, which can be even more if real and more detailed calculations are made. but it should be noted that the consequences of quarantine because of the pandemic affected not only the United States, but also other developed countries of the world. according to the UN, more than one and a half billion people will soon be without means of subsistence. I believe that the best way out of this situation is the introduction of other rules and regulations of precautions and restrictions in order not only to save the economy, but also to save people’s life, to give their father-in-law the opportunity to work in all types of business, but under strict state control over compliance with the rules and using individual means protection.

Hoping for the best but preparing for the worst is a wise move. The decision of the White House not to issue projections is one proof that the condition of the American economy is alarming. But in the mirror of American history, America will rise up and with the consideration that the pandemic is prevalent in almost every corner of the world.

https://www.washingtonpost.com/business/2020/05/28/white-house-coronavirus-economic-projections/

Due to Corona, which spread to 215 countries, many countries made a total travel ban and border shutdown. While the majority imposes a partial travel ban and border shutdown. The level of anxiety over a pandemic is the greatest compared to the period of the financial crisis that has happened several times. Capital owners withdraw their capital and move it to safer assets such as gold and dollars.

So, demand decreases, investment decreases, unemployment increases, budget deficits. But neither the state nor the public will remain silent seeing this condition. The majority will do what they can to move, either with the profit or humanitarian motives. Vaccines are indeed the only solution to overcome the pandemic and to break the lethal effects of the corona pandemic in the economic sector, but even if the vaccine is limited to expectations, humans will not give up.

There is nothing wrong in having an optimistic view about the situation but when you say that when the virus situation is sorted everything will be back to normal and figmentofmyass just explained how long will it take to have a vaccine and the economy is crumbling and the jobless people are rising and it will not be back to normal just like that. The real damage will be known in the next two years, right now what we know is the situation is really bad but we are yet to understand the extend of the damage.

All right then we'll all go back 20 years and then another Hitler will be born and reshape Europe. Is that what you wanted to read here? I'm just trying to be a little optimistic at the time when every site is filled with information noise and news shit.

the most optimistic estimate for a widely produced and safe vaccine = 1.5 years. and that would be record-shattering for vaccine development so let's not get our hopes up too much. 5+ years is the typical development cycle, and sometimes (as with the SARS coronavirus) no vaccine is ever successfully developed.

the economic damage is quickly surpassing 2008. maybe this recession will end up somewhere between 2008 and the great depression.

Yes tourism also trade with China. China was locked down already in February. Also another thing. California that is by far biggest USA economy, had virus and businesses closed even before Europe in early March. Same as Washington state. So it sort of makes sense now.

The Trump administration, desperate to improve the economic outlook, is giving up on defeating the corona virus: https://www.cnn.com/2020/05/06/politics/coronavirus-task-force-trump-pence/index.html


I assume they will continue thwarting testing efforts because of how bad the numbers look, and will look in the future. The White House projection for death counts has nearly doubled recently and will likely worsen again with reopening. Mitigation and containment obviously failed, cases are still rising and will rise more after reopening, so I believe eventually governors will begin shutting states down again as the health care system gets overrun.

This is all building up to an eventual brutal crash in the stock markets when that next wave of shutdowns occurs.

I'm not saying that it is not necessary to develop vaccines to treat people and to support them. I'm saying that getting out of the current situation will be faster than trying to get out of the great depression or 2008.
As soon as they find a fully working 100% method of vaccination, the world will come to life again and everything will be as before in just a year and a half.
Anyway, investors think that even without vaccines economy will start to recover in  2021 Q1

There is also an increase nowadays which could be understood as the recovery. There was obviously a fall and we couldn't expect anything else honestly. Think about it the pandemic happened and people were stuck at home, what were you expecting them to do? Go out and spend money? There is no way to earn money or spend money right now if you are expandable and there was a lot of people who were expandable for a job, sure you are needed to grow and get bigger, but to survive you weren't needed, to survive only a handful of people is enough for many places.

So, this was an expected drop. It doesn't mean that the system works, system doesn't work and it showed us a lot of times before, only a decade ago or so we were in another drop, but just because the system is crooked for the wealthy and it doesn't work for us doesn't mean that this wasn't expected.

America's biggest mistake is to underestimate the corona virus, so it's no wonder the spread of the corona virus in America is the worst.
This is caused lockdown late, so I am not surprised that the economy in America has fallen victim. The first quarter of 2020 is very bad
for America, But the second quarter would be far worse for America if a vaccine was not found to stop the spread of the corona virus.
Hopefully a miracle happens, because America needs it now.

No one is expecting this virus to spread so fast around the world and I know that most of the countries here aren't ready and unplanned. That's the most crucial problem in this pandemic, economies are crashing because of the sudden effect of this virus to the world. Everyone's struggling especially that the US are a large country and the number of infected is still increasing and they are already in 1 million+ cases. This lockdown is really helpful and at the same time bad when it comes to economy. It slower the rate of transmission but the economy is not moving properly and having a hard time to grow. GDP will not drop as long as the government also prioritize their economy and execute some effective ways to handle it.

We live in a global economy now, so even if the USA had no lockdown, other countries trading with them, would have had a lockdown and their trade with the USA would have gone down. I am specifically thinking of the closure of the International borders and the influence that the tourism income would have had, with almost zero tourist being allowed to visit other countries.

Imports and Exports will also suffer now, because some industries and companies in other countries are closed for business, so they are not manufacturing goods for exports. So let's say a company in the USA are building cars and they import some of the parts from another country, then their production are also halted, because those industries are under lockdown in another country.

The USA will take a lot more damage for a much longer time, because they are the worst affected country in the world. (1.23 million infections and 72 000 deaths) <---- A lot of people will avoid traveling to the USA for this reason alone. 

Since the USA went on lockdown very late, I think that's the reason why their GDP fell that much. Before they impose lockdown, the virus was already spreading and they are being affected already. Travel ban and their tourism I think was already affected even before the lockdown. It makes it even worse for them because the government didn't make an early action about this problem. The virus began last year, no wonder why even without the lockdown it already affected the GDP of the US and its economy.

2nd quarter will even be harder for them. Not only the USA but for every country affected by the virus. 2nd quarter of the year yet there is still no vaccine available, it means the longer this lockdown will last, the more the economy will be affected badly.

They are really having a hard time controlling their stock market, their economy and as well as the virus. US really needs to have a prior plan so that they can recover one step at a time, they are experiencing issues simultaneously and I believe that their leader are panicking because of a huge number of cases in their country. They think that they are really strong and healthy enough to fight the virus that's why they underestimated the tragedy brought by the Covid-19. The reason why their economy is contracted sharply right now is because the government is focusing and allocating their funds on the hospitals and making people recover from the virus. Hopefully they can recover from their GDP so that their issue about their economy will become lessen.

Trump's remarks about Lysol's disinfectant injection at the daily briefing forum on the development of COVID-19 in America, became the subject of discussion in Indonesia that the American President had lost his mind. Many trump statements are considered humorous, such as inserting extracts of light into human skin, which are deemed inappropriate by a president of a world superpower.

Trump is a combination of economist and nationalist, now he needs something to bring him elected the second time but the corona pandemic becomes a stumbling block. Just hope that the choice made by Trump is not an economist at war which is Trump's expertise.

that's what is weighing on my mind. people don't seem to understand that businesses shutting down for months can completely destroy them---this has a systemic effect on supply chains and layoffs/oversupply of labor.

a recent survey of small businesses shows:



that is staggering and quite scary. without bailouts, half of all small businesses would go bankrupt after "a few months" or less. it's already been 2 months!

and less than half of business owners applied for the SBA relief loans, not all would be approved, and even for those who are, this is the truth:


everyone is talking like we can just "reopen" as if that means flipping on a light switch, and magically we will return to the q4 2019 economy. even if we ignore the waves of bankruptcies that are likely coming, business owners see the writing on the wall re consumer spending:

It shows that the economy was struggling well before the lock down and for many countries the corona virus will be used as an excuse when there is an election, many business are shut down during this period and it will show in the next quarter and it will be terrible. The elections are coming up and Donal Trump will be having a tough time convincing the voters.