"US Economy Shows Inverted U-Shaped Growth, Not V-Shaped"…Trump Considers Additional Cash Payments

US COVID-19 Cases Reach 50,000 Per Day

[Asia Economy New York=Correspondent Baek Jong-min, Reporter Kwon Jae-hee] The number of new coronavirus disease 2019 (COVID-19) cases in the United States has exceeded 50,000 per day. Expectations for a 'V'-shaped rebound in the U.S. economy have disappeared, and new observations suggest a recovery in the form of an inverted root (√) shape. President Donald Trump has announced that he is preparing additional cash payment policies due to concerns about an economic recession.

According to Worldometer on the 1st (local time), the number of new COVID-19 cases in the U.S. reached a daily record high of 51,097 the previous day. This was due to a sharp increase in cases in Texas, California, and Florida. The U.S. Federal Reserve (Fed) warned in the minutes of the Federal Open Market Committee (FOMC) meeting held on June 9-10, released that day, that "if the coronavirus continues to increase, the U.S. recession could worsen by the end of this year," and since then, the increase in cases in the U.S. has become a reality.

As the situation worsens, the U.S. economic outlook has shifted from a V-shaped to an inverted root-shaped recovery. The Wall Street Journal (WSJ) reported that "the resurgence of COVID-19 and shutdowns will slow the pace of recovery," and "future economic rebounds will show a loose recovery in the shape of an inverted root symbol rather than a 'V'."

Over the past two weeks, the resurgence of COVID-19 has led state governments to halt the reopening of economic activities, putting a brake on the V-shaped rebound. New York City postponed indoor dining at restaurants scheduled for the 6th, and California reimposed restrictions on bars and restaurant operations.

Jesse Edgerton of JPMorgan Chase said, "According to JPMorgan Chase's internal customer data, signs of COVID-19 resurgence were confirmed three weeks after the economy reopened and people began consuming at restaurants and bars," adding, "This shows a strong correlation between reopening measures and the spread of COVID-19."

Employment indicators also support this. Andre Kurmann, an economist at Drexel University, said, "Data analysis shows that corporate employment rapidly increased from mid-April to mid-June but has recently been almost stagnant."

Mary Daly, president of the Federal Reserve Bank of San Francisco, also stated, "It is still unclear whether this can be seen as a recovery signal," and added, "Moreover, I find it difficult to agree with the government's claim that the U.S. economy is experiencing a V-shaped rebound."

As concerns about economic recovery spread, U.S. President Trump announced that he would prepare a large-scale additional support plan, including cash payments, to support economic recovery from the damage caused by COVID-19.

In an interview with Fox Business on the same day, President Trump said, "I want to give more cash than the plan prepared by the Democrats." Instead of explaining specific cash payment plans, he said, "(Cash payments) should not interfere with employment," and "It should be implemented appropriately."

Previously, the U.S. government, through an agreement with Congress, provided cash payments of up to $1,200 per person based on income to all citizens. Separately, the U.S. government has been paying an additional $600 on top of basic unemployment benefits to those unemployed due to COVID-19. It is unclear exactly what President Trump's clear cash payment statement means. However, The Washington Post interpreted it as meaning that instead of ending the expanded unemployment benefits scheduled to expire at the end of this month, support payments for early employment would be provided.

President Trump also expressed strong support for wearing masks in the interview. Local media reported that he changed his previous stance on mask usage due to concerns that the resurgence of COVID-19 could negatively affect the reopening of economic activities.