Covid-19, monster demonstrations against racism, riots and elections in six months… Could the first world economy falter? If the paralysis of the American economy with the containment measures decreed by the federal states had an immediate devastating effect in March-April, Uncle Sam shows, once again, a formidable capacity for rebound.
In two months, unemployment rose as never before in the United States, going from 3.5% in February ... to 14.7% in April. In April alone, 20 million jobs were destroyed. But while some analysts already saw unemployment at 20% in May, 2.5 million jobs were created last month. A divine surprise which reduced unemployment to 13.3% of the working population. And Donald Trump to extol the "strength" of the American economy.
Less drastic confinement
"If you only look at the GDP (Editor's note: national wealth) , the United States shows a less severe contraction than the European Union or China in the first quarter of 2020," notes Jason Furman, professor of political economy at the John F. Kennedy School of Government at Harvard. "And they will have a considerably less severe contraction in GDP than that of the EU in the second quarter," added the man who chaired the committee of economic advisers to Barack Obama.
Why this difference? First, because the United States has not confined as drastically as in Europe. Then thanks to the reaction of the White House and the Federal Reserve (FED), the American central bank. "The US fiscal and monetary response has been good," said Jason Furman.
Substantial aid for individuals
"The budgetary measures have also been effective," says Jean-Noël Barrot, professor at the Massachusetts Institute of Technology (MIT), also a member of the Finance Committee (MoDem). The federal government has injected $ 2000 billion into the economy, 10% of the GDP! He signed a check for $ 1,200 to all Americans who earn less than $ 75,000 a year (66,500 euros). Even French citizens who live in France with dual nationality have received it. "
"We are coming out of this period with a health tragedy (Editor's note: more than 100,000 deaths) and more contaminations (more than 2 million) than other countries, which will complicate our recovery in the coming months", however tempers Jason Furman. Another fear: unemployment. "A rate over 10% ... Two or three years ago, we would have considered this a disaster," he breathes. The American economy could take years to return to its usual unemployment rate, around 4-5%, especially if other threats accumulate.
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"The current riots will have an impact on economic activity," notes Jean-Noël Barrot. In any case, they highlight the social and racial inequalities that undermine the United States. While the fall in unemployment in May benefited whites (minus 1.8 points to 12.4%) and Hispanics (minus 1.3 points to 17.6%), black and asian workers continued to see unemployment rise in their ranks…
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Can Beijing take advantage of these ups and downs? In the past ten years, the American industrial ecosystem has largely hybridized in China. President Trump now wants to backtrack, even if it means launching into an economic standoff with Beijing, "likely to increase the consumption basket of American households," notes Jean-Noël Barrot.
But Washington's economic leadership does not appear threatened for the moment. "The United States has a significant lead, including an extremely powerful tech ecosystem," he continues. They have gigantic capacities in terms of public investment, research and development. What to prepare for the future.