The shadow of the virus looms over the american economy

L’ombre du virus plane sur l’économie américaine

Photo: Andy Lyons Getty Images/AFP
The manufacturing industry remains under pressure, demand for which is low, but also because of the perturbations on the supply chain and of the containment measures.

The shadow of the pandemic continues to loom over the u.s. economy, the rebound could be a startle as contamination, an increase in a large part of the country, have forced many States to back down and close a part of their economy. The world’s largest economy, up from nearly two months of encouraging figures : unemployment is down slightly, but continues from the month of April, the consumption jumps up again, the industry finds color…

Last week, 1.3 million people have pointed to unemployment for the first time, a figure almost unchanged compared to the previous week. The total number of beneficiaries also continues its slow decrease, they were 17.3 million. If we add the persons who receive unemployment benefits extended in the framework of the us stimulus package in the face of the pandemic, such as self-employed workers, in total there are 32 million people who were receiving financial assistance.

In June, the u.s. unemployment rate has decreased from 13.3 % to 11.1 %. But the new registrations could again climb next week, “for the first time since march,” with the new containment measures in several States, is concerned about Ian Shepherdson,chief economist at Pantheon Macroeconomics. “The striking experience of the re-opening botched in may and June means that it will take some time before the figures of the [COVID-19] […] be good enough to allow further easing of restrictions “, he added.

The number of reported cases is on the rise in nearly 40 States out of 50. California announced Tuesday that it is closing part of its economy. President Donald Trump, who hopes to get elected to the White House next November, is trying to limit the damage, and even agreed on Saturday for the first time, to wear in public a mask, become the United States as a symbol of political affiliation.

Mask mandatory

And to try to avoid to the maximum of the additional closures, with serious consequences economically, several giants of the distribution in the United States came to require the wearing of masks in their stores, including the chain Walmart, which symbolizes the ” heartland “America is” real “. The boss of the airline Delta was also of the view that to allow the activity to leave, ” it would be useful […] that our federal government reinforces the need to wear a mask, not only when they travel by plane, but in life in general.”

Because the consumption, the engine of american growth, is also picked up : retail sales rose 7.5% in June, after an increase of 18.2% in may, according to data from the Commerce department also released on Thursday. However, for the whole of the second quarter, the total amount is a decrease of 8.1% compared to the second quarter of 2019.

And the industry struggles to pull his head out of the water, after having suffered from the trade war with China and then the crisis of the COVID-19, who had at first shut down the factories of chinese suppliers, then the us plants. The production of the country as a whole rose by 5.4 % last month, had said on Wednesday the Fed, noting that the level was still far lower than before the pandemic.

“The manufacturing industry remains under pressure, demand for which is low, but also because of the perturbations on the supply chain and of the containment measures,” says Rubeela Farooqi of High Frequency Economics, in a note. “The restart of the activity has led to a certain recovery, but the resurgence of the virus will most likely limit production in the coming months “, she adds.

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