US GDP shrinks 4.8% in the first quarter
Trump’s reelection hopes bleaker with worsening unemployment
The US economy contracted 4.8 percent in the first quarter of 2020 because of severe disruptions caused by the spreading coronavirus pandemic.
Analysts said any rush by the US government to reopen its economy prematurely may inflict further damage on the world’s largest economy, which may hinder global economic recovery.
The figure is below economists’ average forecast of a - 4 percent contraction, which is the worst quarterly performance since the first quarter of 2009.
US GDP figure in the first quarter cannot not be deemed an important indicator of its economic performance, as the country was not badly impacted by the virus at that time, Tian Yun, vice director of the Beijing Economic Operation Association told the Global Times on Wednesday.
GDP numbers for the second and third quarters may dive by double-digits, as one of the key indicators is the number of people applying for unemployment benefits, which has soared to the highest level for decades, he said.
Even if the US government is trying hard to support enterprises, more workers are being laid off, which is not a good sign, Tian said. He predicted that it would take two or three years for US economy to recover. By April 16, more than 22 million Americans have filed for unemployment aid, since US President Donald Trump declared a national COVID-19 emergency in mid-March.
China International Capital Corporation economists predicted in a recent note that the US’ unemployment rate may hit a new high not seen since
World War II of 16 percent in late April and May. They predicted the US economy may tumble by 28 percent quarteron-quarter in annualized rate in Q2.
With local economies in dire straits, some US states are to accelerate economic reopening, according to US media reports.
“It’s unwise but understandable for the Trump government to reopen the economy as soon as possible, as US politicians are thinking more about how to win the November presidential election. By contrast, China always attaches more importance to people’s safety and health,”
Wang Yiwei, a professor at the School of International Relations under the Renmin University of China, told the Global Times on Wednesday.
By Wednesday, the number of confirmed coronavirus infections in the US exceeded 1 million and at least 53,000 people have perished.
As the global pandemic decimated economic activities in European countries, many teeter on the brink of economic recession. Recent data from the Bank of France showed French economy contracted around 6 percent in the first quarter, its worst performance since 1945.