The US economy continues to fall like a stone. For the week ended April 11, 5.245 million people were unemployed in the United States. In four weeks, 22 million Americans have lost their jobs in a country with a workforce of 165 million. The unemployment rate is not known, but is expected to soar from 3.5% before the crisis to almost 17%. The International Monetary Fund (IMF) forecasts a 2020 recession of 5.9% (less severe than that of 7.5% expected in the euro area) before a rebound of 4.7% in 2021.
The crisis concerns supply and demand, as confirmed by the first indices published Wednesday April 15. Closed factories, interrupted value chains: American industrial production experienced its sharpest decline since 1946 in March, with a decline of 5.4%. On the consumer side, the situation is also worse than expected with a drop in retail sales of 8.7%. Unheard of since the creation of statistics in the early 1990s. If the Americans rushed into grocery stores and drugstores to stock up on basic necessities, they deserted bars and restaurants (a quarter of a figure less), clothing stores (sales halved), car dealerships (minus 25%) and remain confined.
Funds engulfed in a few days
The federal government and the states were prepared for the most urgent matters. Twelve million Americans hit unemployment last week. Those who have lost their jobs are entitled to federal compensation of up to $ 600 (about € 550) per week for almost nine months. This is in addition to compensation paid by states, which can reach $ 500. The 150 million Americans earning less than $ 75,000 (€ 69,200) a year have started receiving individual aid from the Treasury of $ 1,200 (plus $ 500 per child). The proceedings were reportedly delayed a few days because Donald Trump demanded that his name be initialed at the bottom of the checks.
The funds made available to businesses by Congress were swallowed up within a few days. More than 1.4 million SMEs have received the green light from the administration to receive $ 350 billion in loans, which are non-repayable if they are intended to pay employees. Congress is considering opening a new envelope of an additional $ 250 billion. The most threatened big companies have been bailed out as a matter of urgency, such as the airlines which should receive some 25 billion dollars in subsidy, repayable at only 30%. The restructuring of the Texas oil industry, which was in a state of collapse before the epidemic, promises to be most violent.
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