Associated Press
Having endured what was surely a record-shattering slump last quarter, the U.S. economy faces a dim outlook as a resurgent coronavirus intensifies doubts about any sustained recovery the rest of the year.
A huge plunge in consumer spending as people stayed home and avoided shopping, traveling or gathering in crowds as the virus raged is estimated to have sent the economy sinking at a roughly 32% annual rate in the April-June quarter. That would be more than triple the previous worst quarterly economic fall, a 10% drop set in 1958. Depressed activity in such areas as business investment, home construction and government spending also likely contributed to the worst quarterly contraction on records dating to 1947.
On Thursday, the government will issue its first of three estimates of economic activity, as measured by the gross domestic product, for the April-June quarter.
Recent reports sketch a cautionary picture of the economy, with weekly applications for unemployment benefits still topping 1 million and consumer confidence falling sharply, with big declines in Michigan, Florida, Texas and California, all of which suffered a resurgence in confirmed virus cases.
Yet in a more hopeful sign, sales of new and previously owned homes have been rising after sharp declines in the spring, thanks to ultra-low mortgage rates. And it was reported Wednesday that the number of Americans signing contracts to buy homes jumped 16.6% in June after a record 44% gain in May.
Economists regard increased government aid as essentially a stop-gap action to keep the recession from deepening further. The most critical need, they agree, is to control the virus, most likely through a vaccine that most likely won’t be widely available until next year.
“If you tell me what will happen to the virus, I will tell you what will happen to the economy,” said Sung Won Sohn, a business and economics professor at Loyola Marymount University in Los Angeles. “At the moment we are seeing rollbacks and a slowing in activity” because of the upsurge in virus cases.
Sohn noted that the economy needed six and a half years to regain the ground it had lost in the 2007-2009 Great Recession. This time, he said, the recovery will likely take even longer.
The government support has been intended in large part to sustain households and businesses — from struggling jobless workers to people facing eviction from apartments to shop owners at risk of bankruptcy. Yet even though the government has spent the colossal sum of roughly $3 trillion with more to come, and the Federal Reserve has cut borrowing rates to record lows, the benefits may ease only some of the damage.
Consider Sara Farish, who had to close her inn on Orcas Island, north of Seattle, between March and June. With the inn limited to 50% capacity by local orders, revenue remains well off the Outlook Inn’s normal levels. Thirty-five weddings that had been booked for this summer have been canceled.
Farish worries about what will happen if the inn is forced to close again if there’s a resurgence of the virus in Washington state. It’s not just a short-term problem; the inn needs to be highly profitable in the summer to cover its expenses during the slower months.
She received a Paycheck Protection Program loan and a Small Business Administration disaster loan. But her bank, apparently worried about the risk of loans going bad, canceled her line of credit.
“We’re trying to do everything we can, day by day, to keep the health of our business,” Farish said.
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Republished with permission of the Associated Press.
2 comments
Sonja Fitch
July 30, 2020 at 8:33 am
Take a rhythm and use it! Shut down 14 days! Open 14 days!
Margu ustinvenif
August 1, 2020 at 3:17 pm
De santis out of brains. Florida economy continuing to destroy to infinity if doesnt do now what over 80 percent florida voters demanding. Strict lockdown 4 weeks to slow out of control virus collapsing tourism,businesses, hospital systems, unemployment, and record avoidable record deaths.
Deaths now 1000 plus a day that’s 30000 dead every 4 weeks as lagging numbers deaths are higher and higher ongoing unless he acts now it’s too late.
He saw what short loose lockdown in April did.just brought Avg to half from 1200 to 600 and still opened early may with rising cases hospitalizations.
At today’s increasing hospitalizations and deaths there
is no way stop florida total destruction at this point without strict lockdown not loose previous april one didn’t stop rising hospitalizations and cases.
To sacrifice 4 weeks then open slowly steps smart to see affect each step before next step is only answer to fast action now necessary to stop economy destroyed totally much much longer time. 4 weeks vs years as as so little restrictions now causing increasing deaths as they come in record highs from each lagging week showing up daily record highs and will continue as doing nothing to stop track.masks alone social distancing alone will not work. De santis has allowed many millions over 5 weeks out there infecting.
Now tests taking so long get results causing more daily dead workers and seniors.useless as too many positive cases at 9000 daily get any tests results back to help anybody.
De santis is being penny deadly foolish and pound catastropic destruction every day he waits to shut down.businesses closing down from virus.
Hospitalizations record highs from virus. Deaths record high from virus. Unemployment rising from virus.
This will continue more and more in all categories to infinity no end in sight unless he steps up despite minority protesters and short sighted bussinesses and does strict 4 week lockdown. Now.
It’s a 4 week strict lockdown enforced best as can vs ongoing on and on worsening. 9000 a day plateau is way to high plateau closing businesses as sick workers and customers. People local scared go out. Tourists scared to come. No staffs no customers across florida worsening daily cause de santis not shut down strict 4 weeks.
His phases open were a lie as no way we’re slow smart but he rushed every step in a week not allowing any time to see affect at all of a step open before rushed more and more.
Florida is dying. At all levels getting worse at a huge plateau of 9000 which increases from that too often.
Florida economy and hospitalizations barely alive at an alarming plateau which will surge higher still as other areas in florida showing daily increases hospitalizations and cases that require icu beds.
De santis murdering more these areas as the hospitals there have zero icu beds or very few which are already full with low supplies.
There is no icu beds within 80 miles of me and there are now only 6 available. Same many in florida as virus surging thru pt st lucie etc in just last few weeks went from 1000 to over 4000 icu beds gone weeks ago.
This can’t continue with de santis ongoing downplaying talking abt fake positivity rates and what he did for nursing homes etc. He says deaths are alarming.YET DOES NOTHING TO STOP THEM.
He continues to say what’s happening is tragic. BUT HE DOES NOTHING TO STOP THE WORSENING OF IT.
HE continues to say it’s hard to see fatalities.YET HE DOES NOTHING TO STOP THEM.
HE continues to distract with emotionless rhetoric abt everything nonimportant right now. On and on.
WHILEVEN HE STILL DOES NOTHING TO STOP OVERWHELMED HOSPITALS AND INCREASING DESTHS, DEATHS LAGGING AS COMES IN BUT ALWAYS HIGHER AND HIGHER…BECAUSE HE’S DOING NOTHING LOCKDOWN TO STOP VIRUS FOR 4 WEEKS SO ECONOMY CAN REBOUND NOT CONTINUE TO DIE TO INFINITY WITH CURRENT OPENINGS. TOO LATE MASKS ONLY.
WORSE THAN ITALY WORSE THAN NY. WORSE THAN MANY COUNTRIES.
CANT HE SEE NOT LOCKING DOWN GIVING SAME DRASTIC RESULTS ONGOING IN FLORIDA THAT TRUMPS IGNORANT RESPONSES DOING TO AMERICA..??,, ONLY TO GET WORSE AD WORSE AS WAY TOO LITTLE TESTING AND LITTLE TRACING POSSIBLE ANYWHERE ESPECIALLY FLORIDA,
TRUMP WANTS FLORIDA GET BETTER AND EVERYTHING DE SANTIS NOT DOING MAKING IT DESTROYED NO END IN SIGHT. TRUMP IS INSANE AND DE SANTIS CORRUPT SOULLESS STUPID AND DEADLY CUNNING AS HE DELIBERATELY SAYS CANT ENFORCE SO WHY BOTHER GIVING FLA NO CHANCE. AT ALL.
OTHER STATES SET FINES IF BREAK LOCKDOWN.ENFORCE A FEW FINES GETS IN NEWS THEN MORE COMPLY. THAT’S WORKING.
HOWN CAN DE SANTIS KEEPS IGNORING TRACK VIRUS TOLL TAKING AT EVERY LEVEL IN FLORIDA.WAITING FOR WHAT??
IT’S NOT GOING LOWER THAN DISASTROUS 9000 BUT HIGHER AS OTHER AREAS NOW IN FLORIDA INCREASING TRIPLE DAILY LAST FEW WEEKS TO BECOME A WHOLE STATE IN FLORIDA OF DESTRUCTION OF ECONOMY AND LIVES IN WHOLE STATE AS THAT’S HAPPENING MORE DAILY AND HE KNOWS IT.
SO MANY MILLIONS INFECTED WALKING ALL OVER ONLY CONTAINMENT SINCE HE LET GO ON SO LONG IS 4 WEEKS STRICT LOCKDOWN.THEN IT’S OVER, OPEN SLOW WAIT SEE AFFECT. BE4 OPEN MORE,
IF DON’T DO IT NOW IMPOSSIBLE SOON EVEN LOCKDOWN STOP IT.
APRIL LOCKDOWN TOO LOOSE CAUSED HIGH RISING CASES OF 1200 WHEN HE OPENED EARLY MAY.EVEN WITH HIS CONTROLLING TOTAL DAILY TESTS TAKING PERCENT OF POSITIVE RATE TRICK WAS CRAZY DEADLY TRUMP ORDERS.
TRUMP NEVER WANTS DO ANYTHING RIGHT,HE DEMANDS FOR HIS EGO INSTANT GRATIFICATION OF HIS IRRATIONAL IDEAS AND that has destroyed america with no end in sight and de santis is letting trumps ego and political reasons destroy florida.
Like many failed trump projects trump has catrosphic ally failed america, florida and de santis career.
Trumps reality day to day loses touch and ignores forgets doesn’t understand what he’s done.so he puts it out of his mind concentrates on election plays golf while america florida and governors sacrifice their states,their careers for him, and he doesn’t care as he just puts it out of his mind. That’s destroying governors careers and their states as they don’t ignore him and close strit lockdown 4 weeks. Trump lives in the moment so all must stay open he says.as he is .unable to comprehend the future that he caused mass destruction in ecomomy, cases, deaths, low suplies etc in america and many governors states.and their people.
De santis is in the moment denying the moment and denying the worsening future. The catastropic future has been here over 5 weeks and worsening with 9000 10000 cases not at all asymtomatic mostly as again hospitalizations and deaths record highs over and over 5 weeks and alarmingly not lowering to 400 or 500 daily cases even.other states saw 400 new cases.closed down causes. De santis went from 1000 to 9000 etc etc did nothing still.letting trumps mind ignoring reality destroy de santis career and florida and america.
The world is revising de santis as corrupt and trump as insane not in reality.
Whiche is worse??? To florida to the nation to the world..it’s de santis because for political reasons, not insanity, de santis is murdering florida as he continues to follow loser trump whose mental state let’s him forget virus completely. De santis for nothing is sacrificing his career as trump will lose fla anyway and by november florida will be totally dead in all areas.
The people of florida vasthe majority of voters republican and democratic want 4 week lockdown to put a stop to this ongoing to infinity death and destruction as huge numbers after 5 months self quarantining still. Millions, so no customers. Would prefer strict lockdown 4 weeks with fines not tell can’t enforce do best can….so after 4 weeks slow open, and not have self quarantine another 6 or 8 months as are ready to do. Would rather 4 weeks strict lockdown be able dine out shop again.
Many millions still and will continue self quarantine until virus stopped.evenow if years.so de santis knows now why few business customers. Won’t get any til strick lockdown. Ever again.and for sure won’t vote for him or trump does not strict lockdown so all continue self quarantining 8 or more months can’t dine out can’t shop can’t go anywhere. That’s why low business customers. We all refuse to go out and hate de santis doing no strict 4 week lockdown as our spending is not as usually is going to restaurants and shopping.
Retirement huge disposable incomes sitting still because isn’t safe go out and spend spend as usual.
Young people can’t spend like retired in florida and the retired are still as long as takes self quarantining.
Hate not dining out 3X a week,hate not daily retail shopping, hate just seeing money pile up have stay in can’t go out spend socialize. That’s why businesses have staff no customers,
Because vast majority customers seniors who spent a lot. Now are smart enough majority won’t leave home. Order online from amazon etc everything.but would prefer 4 week strict lockdown have a life out again.
Thousands of big spenders just my area alone retired won’t leave house until strict lockdown 4 weeks brings virus down.
Young people de santis catering to but economy is tanking.market more because retired are majority are local big spenders it’s their way to socialize with local friends. And buy do all love to travel a lot too.and he’s killing that economy too all over florida,
He’s catering to opposite of what would rebound economy and keep open local businesses all over florida.it’s retired. Not young workers with no customers.customers are hugely big spenders and retirees all over florida.and they are staying hometc over 5 months ready do a yr as long as takes ,so do strict 4 week lockdown let retiree spenders rebound local economy again.that’s wherected de santis is not getting it,
Florida is filled with retirees not spending 5 months and to infinity if he doesn’t do strict 4 week lockdown true slow open. Million and millions of senior dollars nit being spent except resorted to amazon and online.would much prefer dine and shop again locally.
Retirees have guts. They are smart. They are self quarantining not doing normal lot local spending.get it de santis.
Revenue not getting better because Retirees won’t go out.they have lot more spending power than young de santis caters to.businesses know Retirees are huge part revenue and they will not go out unless strict lockdown makes safe.
Bars when opened still not great revenue.because seniors dining out 3 or 4 week and daily retail shopping missing.because de santis is on wrong economy track.
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