U.S Economy during pandemic.

Global Pandemic: History and trumps strategy:
It is a contagious disease caused by severe acute respiratory syndrome coronavirus-2. The first case was reported in Wuhan china in December 2019, which later spread worldwide and become a pandemic. The first case of covid-19 in US were reported in January 2020, which become an outbreak in March and April 2020. Symptoms may differ and vary from person to person but the most common symptoms which were noticed are high fever, cough, breathing difficulty, loss of smell/taste, weakness. The time period for showing symptoms is between one to fourteen days after exposure to the virus. Some people has mild symptoms, some have severe like acute respiratory distress syndrome causes multi organs failure, blood clots and vice versa. The virus spreads when a person is closely in contact with an infected person. From the nose and mouth of an infected person, Droplets and aerosols that contains virus can be spread when they breathe, sneeze and cough. Various tests are conducted to diagnose the disease, the standard one is real-time reverse transcription polymerase chain reaction from a nasopharyngeal swab.
Preventive measures include social distancing, putting an infected person into quarantine (self-isolation), covering cough and sneeze, use of hand wash, face mask or covering the face has been recommended specially in public areas just to minimize the risk of transmission of the disease. Few vaccines have been made but still the work is in progress to inhibit the virus.
President Donald trumps was continuously blame china for covid-19 for months. He did not done anything to stop the spread of virus in the United States of America but also deliberately put himself and his family, his supporters in the path of covid-19. There were decline in the number of new cases after taking numbers of precautionary measurements. However new cases picked up again during fall season and were continuously increasing as of December mid as people were starting to go on jobs and travelling were started globally.

U.S Economy during Pandemic:

The coronavirus pandemic has raised both public health crises and economic crises in America. The pandemic has destroyed many lives and slowdown the global economy. To slowdown the spread of the covid-19 globally as a precautionary measures lockdown and social distancing were implemented worldwide which causes severe economic disruption. The global pandemic has created demand shortage, supply shortage and financial shortage all at once. The US economy GDP growth fell down during second quarter by 31.4%. Unemployment rate is at its peak. From October 12 report there are 6.8 million unemployed peoples than there were in the February. Thus coronavirus pandemic is about on a wave of bankruptcies in US. Big apparel brands and department stores like j.crew, brooks brother, neiman marcus, and jcpenney all filed for bankruptcy to reorganize their businesses but it’s not just the retail sector that is suffering bankruptcies now ripple through almost every industry i.e. Automotive, aviation, telecom, oil and gas company in the US are also feeling the pain as demand dries up during the covid-19 pandemic. Car rental company hertz declared bankruptcy, oil driller Chisholm fracking pioneer Chesapeake energy and your favorite childhood restaurant chuck e cheese also went under. Economist say this is only the tip of the iceberg. Despite billions of dollars spent in government support and loans, it might be too late for a lot of these companies or many companies have closed forever.
According to the reports the US stock market was at its peak during February 12, and then fell down over 37% in March 23. Bond yields indicates health of the economy. The yield on February 19 was 1.56% and fell down over 0.56% in March 9 which created a big concern that the yield may go negative. If bond yield is low the investor tend to invest in stocks thus stock prices go high because when total net buying is greater than total net selling the stock prices go high. The US economy rebounded again after the second quarter by annualized rate of 33.1%, hence the unemployment rate stayed at 6.7% in November 2020.

What measures should be taken?

The key policies were taken according to the report on January 7 2021.


• On December 28, the president signed $877billion bill for coronavirus relief and government funding’s which also include unemployment benefits, direct payments to individuals, resources for vaccines, testing and other benefits. This amount is about 4.5% of the GDP.
• Around $483 billion paycheck were issued to help small business administration to provide grants and loans to support small business. Funds for hospitals and vice versa. Around $2.3 trillion were provided for coronavirus aid, economy security which includes unemployment benefits, food benefits and sources to the most vulnerable and poor people, for the prevention of corporate bankruptcy by issuing loans and guarantees, for international assistance. Also student loans were issued and obligations were suspended for two months. This amount is about 11% of the GDP.
• Approximately $8.3 billion were issued for coronavirus testing, tracing and medical funding. Vaccines development, diagnosis.

Monitory and financial:

• Federal funds were lowered by 150bp to 0-0.25bp.
• Federal reserves also supports the flow of credit by introducing new facilities. Some of the facilities are commercial paper funding facility, primary dealer credit facility, money market mutual fund liquidity facility, primary market corporation credit facility, term asset backed securities loan facility, paycheck protection program liquidity facility, to provide liquidity to the financial institutions that provides loan PPP. Main Street lending program to purchase new or expand the loan amount for small business, municipal liquidity facility to purchase short term notes directly from the states and government.
• Federal bank supervisor encourage depository institution to use their capital, holding of US treasury securities and deposits in the Federal Reserve Bank could be temporarily excluded from the calculation of leverage ratio.
• Lower the community bank leverage ratio to 8%.
• Fannie mae and Freddie mac have announced assistance to the borrowers including mortgage bearance for 12 months and not asking for related late fees, suspending foreclosure sales and eviction of borrowers for 60 days and offering loan modification options.
• No measures were taken in exchange rates and balance of payments.


How is US economy doing right now 2020?

According to analysts the US economic state is improving after the destructive effect of covid-19, the expert’s reviews of the key indicators including GDP, unemployment and inflations. They also have taken a hard look at oil and gas prices, interests rates, jobs and vice versa. The most critical indicator is GDP.
The US economy after the third quarter of 2020 is recovering and increased by 33.1%. Since the record keeping began in 1947, quarterly GDP never drop more than 10%. In April 2020 the retail sales were down by 14.7% due to lockdown but during may 2020 sales were increased by 18.3% as shops and restaurants were starting to reopen with precautionary measures. As the pandemic covid-19 second wave again hits in the fall season, the sales again starting to fall down by 1.1% in November 2020. During the week end of December 12, there were highest unemployment rate filed. But analysts believe that US economic state will be recovered till the second quarter half of 2021.

Is the US in a recession right now?

In the year 2020 the US economy has endured its deepest recession due to covid-19 pandemic, the recession was unpredicted. However the economy is going better as of December 2020 but the unemployment rate is still the same which is 6.7%.

What will be the condition of US economy in 2021?

• According to federal open market committee meeting on December 16th 2020, the economist forecasts that the US economy will grow 4.3%. The experts raised their growth prediction for 2021 which is measured from fourth quarter of the prior year.
• The unemployment rate was 6.7% in the prior year which will decrease by 5.3% in the year end 2021.
• The bureau of labor statistics expects to increase the employment by 6 million jobs.
• The inflation rate was predicted to be slowly rise by 1.8% in 2021.
• During the impact of covid-19 federal open market committee lowered the fed funds to 0.25% which will be same by 2023 until the inflation rate becomes 2%.
• Energy information administration of US predicts that crude oil per barrel price will be $49 in 2021 for brent global and the oil prices will also increases.
• Finished goods prices will accelerate in the year 2021.
• The US dollar is expected to be weaken in 2021. There will be increase in investor risk tolerance and widening trade deficit.
• The US economy will accelerate slowly in the second half of 2021.
• The companies finished goods prices will rise in 2021.

What is the unemployment rate right now?

According to the bureau of labor statistics, in December 2020 the unemployment rate was unchanged at 6.7% due to recent hit of covid-19 second wave and increasing number of coronavirus cases. However experts expected to have good growth of the economy in the mid-2021.