The US economy is heading for a recession. According to experts, the bad data for the first quarter is only a foretaste of the true extent of the corona crisis in the United States.
Washington (dpa) - The US economy contracted in the first quarter due to the coronavirus pandemic. From January through March, economic output declined by 4.8 percent year-on-year compared to the previous quarter, as the Ministry of Commerce announced on Wednesday.
In the fourth quarter of 2019, the world's largest economy grew by a solid 2.1 percent. However, experts are now warning that the USA is threatened by the greatest slump in growth since the Great Depression almost 100 years ago.
The coronavirus pandemic had intensified in the United States from March. From mid-March, many states began to impose exit restrictions that were devastating for the economy. Since then, more than 26 million people have lost their jobs in the United States. Experts believe that the unemployment rate should now be around 15 percent. The government fears an even more drastic economic downturn in the second quarter - possibly even a shrinkage of up to 30 percent.
Wednesday's data was the first estimate of economic growth, so the value could still be corrected in late May or late June.
In the United States, growth figures for the quarters are always extrapolated to the year. They indicate how the economy would develop if the pace of growth continued for a year. This method is not used in Europe, which is why the figures are not directly comparable.
Individual U.S. states are already beginning to relax corona restrictions. US President Donald Trump therefore hopes that the economy will recover quickly in the third and fourth quarters. However, most analysts expect a severe recession in 2020 - which Trump is unlikely to experience in the election year. He tries to get a second term in November.
The U.S. Congress and government have already launched $ 2.7 trillion stimulus packages to slow the rise in unemployment and the slump in the economy due to the pandemic. The US Federal Reserve (Fed), in turn, has already cut its key interest rate to almost zero and launched emergency programs worth several trillion US dollars to stabilize the financial markets and the economy. Central bank chief Jerome Powell wanted to comment on the economic situation after a meeting of the money market committee on Wednesday (8.30 p.m. CEST).
According to data from the University of Johns Hopkins, around one million people in the United States have been infected with the novel coronavirus Sars-CoV-2. More than 58,000 people have died.
Third estimate of growth in Q4 2019, English
Growth in the first quarter of 2020, English