The US is now the world’s largest COVID hotspot; banks warn economic data will be ‘unrecognisable’
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After having only 100 cases at the start of March, the US now has over 80,000 cases — more than anywhere else in the world.
On late Thursday evening, local time, the US had 82,404 confirmed COVID-19 cases. This is ahead of China’s 81,782 and Italy’s 80,589.
Nearly half of America’s cases are in New York state, which accounts for 37,258 cases. Governor Andrew Cuomo blamed the rapid increase on a backlog of infections left unconfirmed due to a lack of testing.
Over 20 states have issued stay at home orders or advisories. Several other cities in states without statewide mandates have issued their own stay at home orders.
While a hit to the economy has been anticipated, the cracks are starting to appear. In the last week 3.28 million Americans applied for unemployment insurance.
Only a fortnight earlier it was just over 200,000 and the most recent unemployment rate was only 3.5 per cent.
Economists are predicting America’s GDP will fall at a pace not seen since 1947. The most radical prediction this week was made by Morgan Stanley.
It projects a 30 per cent fall in the June quarter and unemployment to reach 12.8 per cent.
“With disruptions to economic activity becoming greater, we now expect this contraction in economic activity to be even deeper,” the bank said in a client note.
Even Credit Suisse, which estimated a relatively modest contraction of 12 per cent and unemployment to reach 8 per cent, had a fairly bleak outlook.
“Economic data in the near future will be not just bad, but unrecognisable,” it said.
While many expect a rebound in the second half of the year as the pandemic abates, it will be a slow return to normal.
The Bank of America said the economy will be “feeling somewhat more normal” in July.