Dry blow from the coronavirus outbreak to the world’s first economy. United States GDP has contracted 4.8% in annualized terms in the first quarter of the year due to a pandemic that has already affected more than 1.02 million people in the country and that has taken the lives of 58,355 people, according to the latest data released the Johns Hopkins University. This decline in activity contrasts with the 2.1% advance that the country’s wealth registered at the end of 2019, in the previous quarter. This rpeliminar data supposes, in addition, the fastest fall in US GDP since the 2008 financial crisis, specifically, since the last quarter of that year in which the bankruptcy of Lehman Brothers took place.
The latter implies, among other things, that Covid-19 has ruined the longest expansion in the United States economy. However, and according to the first estimate of the data published this Wednesday by the Government Economic Analysis Office (BEA)), the full economic effects of the pandemic cannot yet be quantified, since the data on which its calculations are based are still incomplete and will take time to update.
“The decline in real GDP in the first quarter reflected negative contributions from personal consumption expenditures (PCE), nonresidential fixed investment, exports, and investment in private inventory that were offset in part by positive contributions from investment fixed residential, federal and state and local government spending “, BEA notes in its statement.
Consumption has been negatively affected by the drop in new vehicle sales; in addition, and in the case of non-durable goods, the increase in purchases of food and prescription drugs was partially offset by a decrease in the demand for clothing and footwear. All, according to data from the Census Bureau’s Monthly Retail Survey (MRTS), and estimates from the Intercontinental Marketing Services Health.
Consumption, which represents two-thirds of the US economy, has been affected by the confinements applied since last month, the lockdown of companies and the dismissal of millions of workers. In fact, the data from weekly jobless claims for the past six weeks shows how the Covid-19 crisis has caused the destruction of 26.7 million jobs in the country. Thus, the retail sales plunged 8.7% in March, its biggest drop since records began in 1992.
It is not surprising that one of the first measures announced by the Donald Trump government and approved by the Senate was precisely to approve a plan valued at 2 trillion dollars (1.85 trillion euros) that includes, among other things, direct aid in the form of a rent payment to each adult citizen of $ 1,200 and $ 500 to each child. That is, the one known as helicopter money or minimum income.
The forecasts of the agencies and experts are not at all rosy in relation to how the pandemic can affect the world’s leading economy. The International Monetary Fund (IMF), without going any further, he estimates that the country’s wealth will fall by 5.9% this year, if bine will manage to recover next year with an advance of around 4.7%.