After an 11-year continuous rise, the U.S. economy is off track, and acceleration went downhill from there. Signs of impending recession has long loomed large on the radar screens of exchange, economists have listed the alarming indicators, but the market invetory didn’t pay attention to all this negativity and bought securities relying on the “bright future” when the stocks will cost even more and will turn a profit. But then came “black Swan” in the guise of coronavirus, and the economy has entered; accordingly, and the stock prices also began to decline.

currently on the rise in the U.S. no one speaks. A five per cent reduction in GDP in the first quarter of 2020, in itself, excludes “lift”. Economists argue only that now in the court – recession or depression. In this dispute about the terms to push off only from the classic definitions of a recession – economic recession for at least two consecutive quarters depression – many months of falling GDP plus prolonged unemployment of 20% or more. But the postulates of the classical Economics is a relative thing. The vast majority (79%) of economists polled by the financial website Bankrate, expressed the opinion that America is already in recession. The presence of a recession reject 8%, and 13% believe that the current situation is not a recession, a depression, the first since the great depression 1929-1939 years.

Two scales

My assessment of the situation announced recently by the National Bureau of economic research, USA (NBER). The recession, the organization measures not only the duration of the recession, but its depth and coverage of the sectors of the economy. And the recovery after the recession – is not as simple and straightforward a thing as it might seem. Technically the recession is over when GDP goes from minus to plus; but, as pointed out Scott brown, chief economist at financial and investment firms Raymond James Financial, it is necessary to take into account the time required to return to coresession level. He predicts that the coronavirus after a recession it takes several years before the us economy will be released on the performance end of 2019.

when Analyzing the current state of the U.S. economy, the TV business news CNBC also points to the relativity of the terms “recession” and “depression”. Depression in human history ever happened only once, although he was “great”. The individual parameters of the current recession cause temptation to classify it as depression, but most economists agree that this recession will reach depression because it will not last long. Experts believe that the recession, which States officially joined in February of this year, next year will come to naught. This lookpoison on the economic prospects gives a surprise on the us labor market in may: all of a sudden forecasters, the us economy had created 2.5 million jobs, and unemployment fell from 14.7% to 13.3%.

as for the hypothetical of depression, experts point to a fundamental difference between what has struck industrialized countries 80-90 years ago, and the fact that the world is experiencing today. At the peak of the great depression, in may 1933, U.S. unemployment reached 25.6 per cent, almost twice the figure may 2020. However, this time the alarming rate at which collapsed the labor market.

In the history of the US unemployment rate only twice (not counting the great depression) were over 10% in December 1982 and in October of 2009. But never was such as it is now: derecesini with a record low level of 3.5% before the current horror it’s only been two months. For comparison, when the Great depression, such negative trend lasted for more than a year.

Then and now

Another negative point: by his own admission, the Bureau of labor statistics, the American Ministry of labour, during the epidemic of the coronavirus was a significant “neuchtenka”: for example, the April figure of real unemployment – is not of 14.7% and 19.7%, which is similar to a depression, not a recession.

On the other scale – the fact that of the total number of Americans who have lost their jobs, 73% of retired temporarily sent on unpaid leave. They hope to return to their jobs when their company will start working again in full force after the abolition of coronavirus limits and the recovery of consumer demand (let’s not forget that it kept two-thirds of the U.S. economy). In the years of the depression of dismissal was final. And in the history of America there was only one case where the proportion of “temporary layoff” in the General rate of unemployment reached double digits – compared to 24.4 percent in June 1975.

Economists point out one very important difference of the current recession from the great depression. The present is not a natural disaster, a voluntary, man-made phenomenon: it took place at the behest of governments, which in the conditions of a pandemic shut down much of the economy in the name of preserving human lives. In the 30-ies of the last century, this humanism was unimaginable.

Society in which they lived the contemporaries of the great depression, was typical of “capitalism with an animal grin”. It did not have paid holidays and sick days. Was not the insurance of Bank deposits when banks went bankrupt, people lost everything. There were no state pensions for old age and disability, no unemployment benefits and much more, which appeared only after – and as a result of the great depression.

To combat the current recession, the US government uses (as was the case during the previous recession of 2008 – 2009 years) the whole clip of measures to help ordinary citizens, small businesses and corporations. The deadlines for receipt of unemployment benefits, increased the amount that small business receives preferential loans, all citizens are paid a lump sum, etc.

Word experts

Let’s hear what they say leading American economists, who were interviewed online resource Bankrate:

Mike Fratantoni, chief economist at the mortgage bankers Association: “the Sudden stop of the economy in March and the extent of this decline is unprecedented. In the second quarter, with high probability, will be one of the biggest reductions in GDP in history. Of course, we expect that economic growth will recover relatively quickly, however the depth of the fall of the labor market and “hangover” after the social distancing are likely to keep GDP growth in negative territory throughout the third quarter. Likely, economic activity will recover to a greater extent in the fourth quarter. But it depends on the situation with restrictive measures in connection with the coronavirus”.

Bob Hughes, senior research fellow, American Institute for economic research: “the Reduction in employment, incomes and production volumes indicate a recession: although the duration of this may be small, but the drop occurs at a very great depth”.

Bernard Markstein, President and chief economist of the research firm Markstein Advisors: “clearly the economy is in recession due to the necessary measures in connection with the current pandemic. The term “depression” I leave for very long (three years or more) period of reduced economic activity… and to sustain a high (double-digit) unemployment.”

Jim Sullivan, chief strategist for macroeconomics USA, TD Securities: “It will be a short recession – some three months – but incredibly tough.”

Stephen roach, a Yale University Professor, former Chairman of Morgan Stanley Asia: “the United States freely enjoyed the support of the rest of the world, providing a disproportionately high level of life. For nearly 60 years the world complained, but did nothing about it. Those days are gone… Currency create a balance between two forces – the state of the national economy and the abroad assessment of its strength or weakness. The balance is shifting, and seems to be nearing the collapse of the dollar…According to the estimate of the congressional Budget office, US Federal budget deficit will increase in 2020 to a record peacetime rate at 17.9% of GDP in 2021 will drop to too ��malenkoy digits to 9.8%. The fall of the Almighty dollar is superimposed on the pandemic COVID-19 and race riots, which would entail very serious consequences for suffering from a lack of savings in the American economy”.

Get everything, but not equally

Analysts draw attention to the fact that the decline in the American economy in varying degrees affects the welfare of different regions of the country. (Russia is also familiar with the uneven impact of the crisis on the one hand, on powerful Metropolitan and industrialized region, and other subsidized underdeveloped regions of the South and East of the Russian Federation). In the news ABC News told, for example, about how the pandemic has destroyed the economy of the resort and the Hawaiian island of Maui. At the resort the Kahului in April, unemployment reached 35% – a record for the US index.

Reuters quoted another example is North Dakota, which until recently was a showcase of American shale oil production. By leaps and bounds, has grown not only oil production, but everything else, stimulated “black gold”. Now Governor Doug Burgum talks about “economic Armageddon” and requires all state agencies to reduce costs. More than half of wells are plugged; the owners of the land on which was fought the oil and gas production, lost 85% of income – rent from land rights; hotels lost 80% of its guests; the revenues of the state decreased by 53%.

in Addition to the oil and gas sector, large losses are sustained by agriculture in the state: sales of trump showdown with China has dealt a serious blow to sales of American agricultural products. There are similar difficulties in other States, the welfare of which depends on mining and agricultural production – Oklahoma, Alaska, new Mexico, etc.

but the centers of high technology, Finance, show business and other “smart services” – California, Massachusetts, new York less vulnerable to the adverse consequences of crisis than raw materials and agricultural States, as well as manufacturers of cars and planes (States of Michigan and Washington), for which demand has fallen sharply and it is unknown when you return to the former positions.

will Fly the second “black Swan”

Here the place to draw a parallel with Russia, where the dependence from the extraction of mineral raw materials is too well known. This dependence makes it more vulnerable to crisis than diversified economies of Europe, America or Japan. 40% of budget revenues at the expense of oil and gas is a serious Achilles heel. The demand for hydrocarbons will recover after the pandemic (and it’s not over) not soon…

All of these predictions and the reasoning of the experts, however, can be equally untenable, as Radornia predictions investment Bank Goldman Sachs at the beginning of this year, the Bank believed the recession in the United States an incredible script. Now, this scenario has become a reality.

what can overturn the predictions, the turmoil in the U.S. and other countries, which are increasingly destructive. To the fighters for racial justice along a whole army of extremists and criminals – just as it was in the midst of the movement “Occupy Wall Street”, only the scale is now larger. This development does not Bode well for American cities, the economy of the United States. This is the second “black Swan”. He’s already hovering over Europe, but most likely will fly past Russia. But rejoice we do not have. Although a number of economies in the world began to open up after a coronavirus, Talon, the IMF sees no reason for optimism – on the contrary, the Fund predicts the deterioration of the situation.

“for the First time since the great depression, 2020 will be a year of recession for developed economies, and developing. The June update of the global situation clearly show the negative growth figures that will be even worse than previous estimates,” says Gita Gopinath, IMF chief economist.

the Fund believes that the current crisis (the”Great lockdown”) will be “unlike anything ever, seen before.”