BEIJING: Bleak figures from the world’s two largest economies underscore how quickly the coronavirus is delivering a massive economic blow.
China on Friday reported GDP shrank 6.8 percent from a year ago in the quarter ending March, its worst contraction since before economic reforms began in 1979. In the US, the world’s largest economy, the ranks of the unemployed swelled toward levels reached during the Great Depression.
Still, the economic data from China was not as bad as some had feared, prompting shares in Asia to surge. That was after Wall Street also rose, powered by buying of Amazon, health care stocks and other market niches that are thriving in the coronavirus crunch.
The recovery for workers is likely to take a long time, however. Some forecasters earlier said China might rebound as early as this month, but they have been cutting growth forecasts and pushing back recovery timelines as negative trade and other data pile up.
The US government reported 5.2 million more Americans applied for unemployment benefits last week, bringing the four-week total to 22 million — easily the worst stretch of US job losses on record. The losses translate to about 1 in 7 American workers.
South Korea reported its worst jobless figures in more than a decade, with almost 200,000 fewer people working in March than in the same month last year.
President Donald Trump reacted to the pressure on the economy by outlining a phased approach to reopening parts of the country where the pandemic is being brought under control.
He told the nation’s governors that restrictions could be eased to allow businesses to reopen over the coming weeks in places that have extensive testing and a marked decrease in COVID-19 cases.
“We are not opening all at once, but one careful step at a time,” Trump said, adding that his new guidelines give governors the freedom to act as they see fit.
His comments marked an abrupt change after he clashed with governors over his claim that he had “total” authority over how and when the country reopens.
Worldwide, the outbreak has infected more than 2.1 million people and killed more than 144,000, according to a tally by Johns Hopkins University, though the true numbers are believed to be much higher. The death toll in the US topped 33,000, with more than 670,000 confirmed infections.
China raised its death toll to over 4,600 after Wuhan, where the outbreak first took hold, added nearly 1,300 deaths. State media said the undercount was due to insufficient admission capabilities at overwhelmed medical facilities. Questions have long swirled around the accuracy of China’s case reporting, with some saying officials sought to minimize the outbreak.
The spread of the virus is declining in Italy, Spain and France, but rising or continuing at a high level in Britain, Russia and Turkey. Singapore reported a record daily high of 728 new cases as it ramped up its testing at dormitories crammed with foreign workers.
UN Secretary-General Antonio Guterres warned that the economic impacts of the pandemic were putting many of the world’s children in jeopardy, and urged families and leaders everywhere to help protect them.
The UN chief said in a video statement that the lives of children were being “totally upended” by COVID-19, with almost all students out of school, family stress levels rising as communities face lockdowns, and reduced household income expected to force poor families to cut back on essential health and food expenditures, which would affect children in particular.
In China, retail spending, which accounted for 80 percent of economic growth last year, plunged 19 percent in the first quarter from a year earlier, below most forecasts. Investment in factories, real estate and other fixed assets, the other major growth driver, sank 16.1 percent.
Factories and other businesses were allowed to reopen. However, cinemas, hair salons and other enterprises that are deemed nonessential but employ millions of people are still closed.
New York reported more encouraging signs, with a drop in the daily number of deaths statewide.
“We’ve controlled the beast,” Gov. Andrew Cuomo said. Still, Cuomo extended the state’s lockdown through at least May 15.
Lifting of restrictions, when it happens, won’t be like flipping a switch. Restaurants and other businesses may be reopened in phases, with perhaps a limited number of entrances or reduced seating areas, while supermarkets may stick with one-way aisles and protective shields at the cash registers, experts say.
Many European countries, like the US, have seen heavy job losses, but places like Germany and France are using government subsidies to keep millions of people on payrolls.
Italy’s Lombardy region is pushing to restart manufacturing in early May, and Switzerland announced staggered re-openings.
“The transition is beginning,” Swiss Health Minister Alain Berset said. “We want to go as fast as possible, and as slow as necessary.”
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