A second wave of the COVID-19 outbreak in the United States may slow the country’s reopening efforts and delay the economic recovery, economists said.
“In the second week of June, new coronavirus cases are on the rise in 20 states, many of them with record highs,” Mark Vitner and Charlie Dougherty, economists at Wells Fargo Securities, wrote Tuesday in a report on possible regional impacts of a second wave of COVID-19.
“While the increase in new cases can be partly explained by factors such as more prevalent delays in testing and reporting, some state and local officials have warned that further deterioration could impair the hospital’s capacity and require a delay in reopening plans or even a reopening. imposing restrictions on commercial activity, “they wrote. The two economists noted that the pandemic appears to be intensifying in the so-called large Sun Belt subways in the United States, such as the greater Houston metropolitan area and the city of Miami, which were among the fastest growing in the country before the coronavirus crisis.
“Even without new restrictions or blocking orders, the new waves of coronavirus could weigh alone on consumer and business confidence and prolong the return of economic activity to previous peak levels,” they said. The report was released when the governor of Texas, Greg Abbott, urged people to stay home on Tuesday after the state reached another high level in its daily number of COVID-19 cases. “If you don’t have to leave, the best advice is still to stay home,” Abbott said at a news conference in Austin.
Miami Mayor Francis Suarez also said on Monday that the city would not move on to the next phase of reopening because of concerns about the increase in COVID-19 cases. “As it stands, we are not ready for the Phase 3. Although hospitalizations have remained consistent, the overall number of positive cases has increased and even the number of positive cases proportional to the test has increased slightly, “tweeted Suarez.
US Federal Reserve (Fed) President Jerome Powell said on Tuesday that the economy may be entering a recovery phase, with the easing of social distance measures and the resumption of commercial activities, but employment and production will be “very short” pandemic level. “Much of this economic uncertainty comes from uncertainty about the path of the disease and the effects of measures to contain it,” Powell said in a virtual hearing at the congress. “Until the public is sure that the disease is contained, a full recovery is unlikely.”At its policy meeting last week, the Fed kept its benchmark interest rate unchanged at the record low level of almost zero, and projected interest rates will remain at the current level until at least 2022.
The central bank also projected that the economy economy will shrink 6.5% in 2020, followed by a 5% gain next year. As the consequences of COVID-19 continue to spread across the country, more than 100 economists asked the US Congress on Tuesday the immediate approval of another multifaceted assistance law to save the economy affected by the pandemic.”If Congress fails to act, state and local governments face potentially disastrous budget deficits, and the Congressional Budget Office estimates that the unemployment rate is likely to be over 11% by the end of the year,” the economists said in a statement to leaders of the Congress launched by Washington C
The US economy contracted at an annual rate of 5% in the first quarter of this year, according to the Department of Commerce. That figure, however, does not yet fully capture the economic damage of COVID-19, and many analysts believe the decline in the second quarter is likely to be much deeper.
