The big unknown — what’s on everyone’s mind — is how quickly the U.S. recovers from the shock of a coronavirus pandemic that ignited the fastest and deepest economic slump in modern history.
If the end of the great toilet paper shortage is any indication, the U.S. economy has already bottomed out and a fragile recovery is underway.
There’s little doubt among economists the U.S. will experience a burst of growth before the end of the year. Blitz likened the economy to a rubber duck being held under water in a bathtub. When it’s released, it briefly shoots up in the air — before falling back down. “A full recovery in the economy is going to hinge on how well society gets the pandemic under control,” said Boston Federal Reserve President Eric Rosengren. “If consumers are afraid to eat out, shop, travel, a relaxation of laws may do little to bring back customers and thus jobs.”Absent a cure, large and critical segments of economy will require sweeping changes just to survive that could result in the loss of millions of jobs.
The jobless rate rose unofficially to almost 20% in May, according to a government analysis, from just 3.5% three months ago. More than 20 million people lost their jobs in April alone.Feeling growing public pressure and worried about falling tax revenue, every state is reopening their economies ore relaxing restrictions to try to limit the damage
“The much slower rise in continuing claims suggests that people are now beginning to return to work,” chief U.S. economist Paul Ashworth of Capital Economics said. The next pivotal event for the economy is likely to come by midsummer when federal programs that offer extra unemployment benefits and subsidies to keep small business workers on payrolls expire. If not enough workers are able to return to their jobs because business is slow, Congress might need to add more money to the pot to prevent more mass layoffs and another shock to the economy.
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