Surge in virus threatens to reverse global rebounds
WASHINGTON — The resurgence of coronavirus cases engulfing the United States and Europe is imperiling economic recoveries on both sides of the Atlantic as millions of individuals and businesses face the prospect of having to hunker down once again.
Growing fear of an economic reversal coincided with a report Thursday that the U.S. economy grew at a record 33.1% annual rate in the July-september quar ter. Even with that surge, the world’s largest economy has yet to fully rebound from its plunge in spring when the virus first erupted. And now the economy is slowing just as new confirmed viral cases accelerate and rescue aid from Washington has dried up.
If many consumers and companies choose — or are forced — to retrench again in response to the virus as they did in the spring, the pullback in spending and hiring could derail economic growth. Already, in the United and Europe, some governments are re-imposing restrictions to help stem the spread of the virus.
In Chicago, where Gov. J.B. Pritzker of Illinois has banned indoor dining and drinking, Grant Deporter, who runs Harr y Caray’s Restaurant Group, worries that the blow to restaurants and their employees could be severe.
When indoor dining was first shut down in the spring, he noted, employees could get by thanks to a $600-a-week federal unemployment benefit. That benefit has expired.
“Ever yone is incredibly disappointed by the state’s decision,” Depor ter said.
In France, President Emmanuel Macron has declared a nationwide lockdown star ting Friday. And in Germany, Chancellor Angela Merkel announced a four-week shutdown of bars, restaurants and theaters. Merkel warned of a “difficult winter” as Germany’s daily reported coronavirus cases hit a new high Thursday.
A major uncertainty is whether most people will abide by government directives or whether the resistance to lockdowns and other restrictions that have emerged in par ts of the United States and Europe will slow progress in controlling the pandemic. President Donald
Trump, facing an election in five days, has loudly denounced states and cities that have imposed restrictions on businesses to help control the pandemic. And many of his suppor ters have registered their agreement.
The U.S. government’s estimate Thursday of third-quarter growth showed that the economy has regained only about twothirds of the output that was lost early this year when the eruption of the virus closed businesses, threw tens of millions out of work and caused the deepest recession since the Great Depression.
The economy is now weakening again and facing renewed threats. Confirmed viral cases are surging. Hiring has sagged. Federal stimulus has run out. With no further federal aid in sight this year, Goldman Sachs has slashed its growth forecast for the current fourth quarter to a 3% annual rate from 6%.