While Democrats’ favorite coronavirus talking points are to compare the U.S. response unfavorably to Europe, new reports show that Europe’s economy had even worse declines than America’s in the second quarter of the year.
Europe, which is no stranger to recessions, is now in the worst recession on record, according to Eurostat. The economies of European Union nations declined 11.9% in the second quarter, while economies of Europe as a whole had a slightly worse decline of 12.1%.
Most European nations went on lockdown in February and March in an attempt to slow the spread of the virus with the notable exception of Sweden, which did not mandate lockdowns but did ask residents to take reasonable precautions against the virus voluntarily.
The United States, on the other hand, had a handful of states where lockdowns were not mandated and which generally had low numbers of cases during the quarter when things were locked down.
US sees slightly less economic decline
Even so, the U.S. also had a record-breaking GDP loss of 9.5%, with declines being larger in states that locked down.
While American media reported the U.S. decline as an annualized decline of 32.9%, that figure is disingenuous because things are less locked down now and the decline is already slowing, as evidenced by an increase in June personal spending.
At least for now: who knows what excuses Democrat governors like Gretchen Whitmer (MI) and Tom Wolf (PA) will find to institute new lockdowns even though by now a good deal (not all) of the current surge has been explained by increased testing and counting errors.
It should have been expected that cases would increase as parts of the economy reopened, as well as the hundreds of thousands of people protesting in cities around the country. The media panic over the increase was wildly overblown, and it looks like the spikes are beginning to come back down in at least some states with only a mild increase in deaths.
Partial reopenings stalled
In Europe and the U.S., many reopenings have been stalled as cases have increased. While most businesses have been able to reopen, restaurants and bars are at partial capacity in many cases and larger venues like arenas and movie theaters remain closed.
Texas, Florida and California have all paused openings or reinstituted some restrictions to try to slow case spreads, which has held back some economic recovery that would otherwise have occurred.
Similarly, European countries like the UK have also reinstituted restrictions, including a ban on visiting each others’ homes and further delaying the reopening of casinos, arenas and movie theaters.
Both the U.S. and Europe should see GDP increases in the third and fourth quarters unless cases spike further and more lockdowns are instituted.