Covid-19: US already in recession; Trump accuses China of taking advantage

US President Donald Trump | Photo: Reuters
A survey, carried out by the National Association for Business Economics (NABE), has revealed that the US economy is already in recession and will remain in a contractionary state for the first half of 2020, as the coronavirus (Covid-19) pandemic severely restricts economic activity.

Economists believe the US economy entered recession in March itself.

“The consensus is real GDP declined at an annualized rate of 2.4 per cent in the first quarter of 2020, and will shrink at an annualised rate of 26.5 per cent in the second quarter", NABE President and KPMG Chief Economist Constance Hunter said in a statement on Friday. 

"The panel is optimistic about a return to economic growth in the latter half of 2020, anticipating an annualized real GDP growth rate of 2.0 per cent in the third quarter," Hunter said.

The survey of 45 economists, conducted between April 3-7, showed that the US unemployment rate is expected to spike to 12 per cent in the second quarter, with a loss of 4.58 million jobs on average for the monthly nonfarm payroll employment. But the unemployment rate is expected to fall back to 9.5 per cent at the end of 2020.

"Despite a sharp deterioration in labor market conditions, the median forecast suggests conditions will improve by the end of the year with support from aggressive fiscal and monetary stimulus, as panelists expect the Federal Reserve to hold steady on near-zero interest rates through 2021," she said.

With the country at a stand-still, the economy rapidly contracting and millions unemployed, President Donald Trump on Friday said that If China is considered a developing country, the US should also be made one, alleging that Beijing had been taking advantage of his country. 

"China has been unbelievably taking advantage of us and other countries. You know, for instance, they are considered a developing nation. I said well then make us a developing nation too," Trump told reporters at his daily White House news conference on coronavirus.

Read the full text of the NABE survey

"They get big advantages because they are a developing nation. India, a developing nation. The United States is the big developed nation. Well, we have plenty of development to do," he said.

Reiterating that United States was being taken advantage of by the World Trade Organization, Trump said the Chinese economy started booming after it joined WTO with the help of the US.

"If you look at the history of China, it was only since they went into the WTO that they became a rocket ship with their economy. They were flatlined for years and years," he said.

"Frankly, for many, many decades. And it was only when they came into the WTO that they became a rocket ship because they took advantage of all -- I'm not even blaming them. I'm saying how stupid were the people that stood here and allowed it to happen," he said.

In another major development,, a staggering 16.8 million Americans filed for unemployment benefits in the last three weeks, with weekly new claims topping 6 million for the second straight time last week as the novel coronavirus outbreak relentlessly savages the economy.

Donald Trump last month signed a historic $2.3 trillion rescue package, which made provisions for companies and the unemployed. Both Trump and US House of Representatives Speaker Nancy Pelosi have floated an infrastructure stimulus.

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