Stephen Middot; SMIDDOT; Roach

Double DIP (Double DIP, in the dance means that men and women's lower waist at the same time) are not a dance step, but a trend of the long -standing American economy, that is, it has fallen into a decline again after a short -term recovery.Over the years, this situation has often occurred.Although the current flooding financial market is showing a beautiful state of V -shaped recovery, there is evidence that after the United States has experienced a devastating 2019 coronary virus disease impact, it may occur again.

History of the suffering of the American business cycle, we must not be proud and complacent.Since the end of the end of World War II, there have been two bottoms in eight games. We can simply define it as the decline in the actual domestic GDP (GDP) after a brief rebound.There are only a few exceptions from 1953 to 1954, a short contraction in 1980, and a mild decline from 1990 to 1991.Other recessions not only include a second bottom, but also three bottoms of them, that is, the two short -term returns after twice.

Of course, the bottom out of the bottom does not come out of thin air.It is the fragility that cannot be got rid of the economic fundamentals, and the combination of the first round of economic recession impacts the aftershocks.Generally speaking, the more severe the decline, the greater the destruction, the longer the healing time, and the greater the possibility of the second bottom.From 1957 to 1958, 1973 to 1975 and 1981 to 1982, this was the case with the major contraction of the global financial crisis from 2008 to 2009.

The current economic recession has classic conditions for the second bottom.After experiencing the actual GDP annualized in the second quarter of 2020, it plunged 32.9%month -on -month. It was also the largest quarterly decline in history.The unprecedented blockade implemented to fight the early epidemic of crown disease has caused the economy to suffer unprecedented severe blows, and almost no recovery has begun.The sharp rebound of this quarter was a simple arithmetic problem. In fact, it was achieved by the partial opening of the shutdown business.However, this situation will continue, or will it decline again?

The major financial markets are not worried that the economy will decline again, which is largely due to unprecedented currency easing policies.This is reminiscent of an ancient saying: Don't do it with the Federal Reserve.It aims to reduce the impact of the epidemic on enterprises and families, and the unprecedented financial assistance measures introduced have also brought additional comfort.

However, this may be just wishful thinking.The fundamental problem is the virus, not the liquidity injection dominated by the Fed, or the requirements of temporary support provided by financial measures.Currency and fiscal measures can alleviate the dilemma of the financial market, but they are almost inherent in solving the fundamental health and safety issues facing the real economy.

Since the United States is still under the magic claws of the epidemic, the opportunity to recover is quite slim.Although the rebound of production and employment highlights the major progress of the economic supply side, these achievements are far from great achievements.As of July, the number of non -agricultural employment only regained 42%of the unemployed in February and March, while the unemployment rate of 10.2%was still nearly three times before the epidemic.Similarly, the industrial output value in July was 8%lower than that in February.

Repair on the demand side is more uncertain.This is particularly obvious in key components of non -consumption, especially retail shopping, and expenditures in catering, tourism, and leisure and entertainment.Because comprehensively participating in these activities (all these activities require people's face -to -face contact), they may bring health risks that most people do not want to bear, especially considering increasing infection cases and lack of effective therapy and vaccine.

If you want to correctly look at the impact of the epidemic, you can refer to the data of transportation, entertainment, catering and accommodation (also the field of consumer demand for crown disease). In the first quarter of 2020 before the epidemic, they occupied family services21%of total category expenditure.In the second quarter, calculated based on the value of actual (after the inflation adjustment), and the annualized expenditure of these categories plummeted by 86%month -on -month.

The monthly data as of June highlights these important non -necessary consumption fields that have been suffering from reverse wind.Although the total expenditure of durability and non -durable consumer goods has risen by 4.6%compared with the level before the epidemic (calculated according to actual value), so far, the total expenditure of the family in the service industry (also the biggest part of the total consumption) is43%of the loss caused by the blockade.

All in all, this is the so -called non -synchronized normalization, that is, the contribution of the supply side is higher than the local recovery of the demand side.This situation is not unique to the United States, and similar situations also appear in other economies.Even if it is China, its national leading system is much more effective than the influence of the demand side on the demand side of the demand side's sensitive family consumption behavior specifications on the demand side.

However, the normalization of non -synchronization in the US economy has a large difference in a key aspect: the poor performance of the United States in controlling viruses not only exacerbates people's continuous panic in infection, but also likely set off a new wave of crown disease epidemic.Although new cases of new cases have been reduced in the past month, in the week of August 20, the number of daily infections was close to 48,000, which was more than twice the records of May and June.

In addition, since late July, an average of more than 1,000 people daily daily, and it is expected that this level will still be maintained in the remaining time this year. This rising infection speed is increasingly clearing the future situation.In this case, consumers' concerns, and their impact on the sensitive service of epidemic, is unlikely to fade, and even intensify the new wave of infection.

All this shows that the second bottom of the bottom is possible.After experiencing the most serious economic impact in history, local and non -synchronized normalization indicates that the US economy still has vulnerability; and failure to curb the virus highlights the obvious possibility of aftershocks.This is exactly the combination that caused many times before.However, the flood of the financial market is attached to the classic V -shaped recovery.The rhythm of history indicates a completely different result.

Author Stephen S. Roach is a senior lecturer at the School of Management of Yale University. It is the unbalanced: The United States and China are dependent on each other.

English Title: Americas Coming Double Dip

Copyright: Project Syndicate, 2020