The U.S. economy continues to fall like a stone. For the week ended April 11, 5.245 million people registered as unemployed in the United States. In four weeks, 22 million Americans lost their jobs in a country with a labour force 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 recession of 5.9% in 2020 (less severe than the 7.5% expected in the euro area) before rebounding by 4.7% in 2021.
The crisis concerns supply and demand, as confirmed by the first indices published on Wednesday 15 April. Closed factories, value chains interrupted: U.S. industrial production fell in March to its largest decline since 1946, down 5.4%. On the consumer side, the situation was also worse than expected, with retail sales down 8.7%. Unheard of since the creation of statistics in the early 1990s. While Americans rushed to grocery stores and drugstores to stock up on basic necessities, they deserted bars and restaurants (a quarter less sales), clothing stores (sales halved), car dealerships (minus 25%) and remain confined.
Funds sunk in a few days
The federal government and the states have been in a hurry. Twelve million Americans hit unemployment last week. Those who have lost their jobs are entitled to federal compensation of up to $600 (approximately 550 euros) per week for almost nine months. This is in addition to the compensation paid by the states, which can reach 500 dollars. The 150 million Americans earning less than $75,000 (69,200 euros) a year began receiving individual assistance of $1,200 (plus $500 per child) from the Treasury. The proceedings were reportedly delayed by a few days because Donald Trump demanded that his name appear at the bottom of the cheques.
The funds made available to businesses by Congress were swallowed up in a matter of days. More than 1.4 million SMEs have been given the green light by the administration to receive $350 billion in loans, non-refundable if they are intended to pay employees. Congress is considering opening a new $250 billion envelope. The major companies most at risk have been urgently bailed out, such as airlines that are expected to receive some $25 billion in subsidies, repayable to the tune of only 30%. The restructuring of the Texas oil industry, which was in disarray before the epidemic, is shaping up to be a very violent one.
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