The United States has announced a 4.8% fall in GDP in the first quarter, which is leading the country to a recession and ending more than a decade of economic boom.
The world’s largest power has been growing steadily since March 2009, when it managed to emerge from recession after eighteen months, the longest period since World War II.
Then, the economic break was named after Lehman Brothers. Today, it has the identity of the Covid-19, responsible for an unprecedented pandemic and its still uncertain consequences, which has ravaged the world. The boom enjoyed by the United States since 2009, the longest it has ever lived, has been slow but sustained until it reached a fully employed labour market, a level of unemployment of less than 4%, controlled inflation in the environment 2% and GDP growth of about 3%.
An international emergency health crisis has broken the foundations of growth in an unexpected way and just when Donald Trump tried to revalidate his position as president in November with the revenue of the economy.
The 4.8% drop in US wealth in the first three months of 2020 is the biggest since the fourth quarter of 2008 and is the tip of the iceberg for what is to come. For the second quarter, affected by total containment measures and the closure of businesses and borders, the collapse could exceed 30%, with an unemployment level of more than 20% that would bring the country closer to the darkest period of the Great Depression.
From the White House, they try to emphasize the temporality of the crisis. Treasury Secretary Steven Mnuchin says he expects a strong rebound in the economy in the second half of the year of 17% thanks to billions of measures approved by Congress to tackle the coronavirus and aimed at stimulating consumption, which involves two-thirds of the country’s wealth. For its part, the International Monetary Fund (IMF) calculates that the economy will fall almost 6% throughout the year, much more than in the great recession.
The incentive packages that have been launched in the country will not, in any case, be free. The United States will shoot up its public debt this year above 130%, opening a scenario of deficit and difficult to conclude. The largest economy in the world already had historical debt ratios, which in 2019 already exceeded 100% of GDP.