American Economy to Reopen in Three Phases as Trucking Braces for More Job Losses
Washington D.C. – On Thursday, President Donald Trump and his White House Coronavirus Task Force unveiled a three-phased plan to reopen America’s cratering economy.
Widespread shelter-in-place orders designed to slow the spread COVID-19 and prevent America’s health care services from being overrun have been effective, but unfortunately, have also served to decimate the U.S. economy with unprecedented ferocity.
According to the U.S. Department of Labor, another 5.2 million Americans filed for unemployment benefits last week bringing the total number of jobs lost during the last four weeks to more than 22 million.
Unemployment has now soared to 13.5 percent, which is a reality that seemed unthinkable only a couple of months ago when America was enjoying historically low unemployment of 3.5 percent.
The trucking industry, which was largely insulated from the obliteration through much of March, mostly due to panic buying among U.S. consumers, has seen its fortunes drastically change in recent weeks also.
As freight levels have sharply declined, many trucking companies have laid off significant portions of its labor force including many truckers.
Even despite three phases of unprecedented governmental action to the tune of more than $4 trillion (and counting) in relief stimulus, most trucking economists continue to forecast GDP to decline at an annual basis of up to 20 to 30 percent in the second quarter (Q2).
Last week, JPMorgan economists cut their second-quarter forecast even more, now expecting the economy will decline by 40 percent in Q2.
To put that into perspective, the worst quarter during the Great Recession of 2008 saw an 8.4 percent reduction which occurred in Q4.
Earlier this month, Bob Costello, chief economist for the American Trucking Associations (ATA), sounded the alarm about just how bad the COVID-19 mitigation measures were expected to impact the trucking industry.
“The vast majority of businesses are going to hurt and hurt badly,” Costello said. “I would expect a lot of trucking failures. I hate going out and saying that, but I think you need to know that.”
President Trump signaled publicly multiple times over the last two weeks he was hopeful to get America open for business again soon.
On Wednesday, the White House announced its Great American Economic Revival Industry Groups comprised of leading executives from each sector of the economy to advise the President and U.S. leaders on how best to safely get Americans back to work.
Then, today in a White House press briefing, President Trump, along with other White House Coronavirus Task Force members put forward new guidance on how governors can accomplish this.
Click HERE to read the specific details of the three-phased plan.
The first phase hinges on States’ ability to quickly set up safe and efficient screening and testing sites for symptomatic individuals and trace contacts of COVID+ results, as well as to quickly and independently supply sufficient Personal Protective Equipment (PPE) and critical medical equipment to handle a dramatic surge in need.
If certain “gating” benchmarks are met, governors are encouraged to move on to Phase Two and then to Phase Three.
President Trump acknowledged some States hardest hit by the coronavirus outbreak such as New Jersey and New York will be slower to meet the benchmarks.
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However, he indicated other States are ready to move into Phase One almost immediately.
Depending on how quickly States are able to reopen its economies will largely determine whether the U.S. economy experiences an accelerated (v-shaped) recovery or a slower one.
Costello, like most trucking economists, is remaining optimistic about a strong rebound especially given the nature of the financial crisis.
“This is not an economic crisis. This is a health crisis. If we can get past the health part of it, hopefully we can get a v-shaped recovery,” he recently commented.
President Trump was asked about JPMorgan’s dire forecast and the prospects of a strong recovery at a White House press briefing last week.
“I think my economic advisers are interested in the third quarter and really in the fourth quarter,” he stated. “I think we have a chance to do record fourth quarter numbers because there is a tremendous pent up demand,” he declared.
TransportationNation.com will continue to follow new developments closely.