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The coronavirus pandemic has sent the U.S. economy into freefall, but key indicators suggest the downturn will subside by late summer if states pursue an aggressive reopening timetable, according to two conservative White House economists.
In an analysis released this week, Art Laffer and Stephen Moore — both members of President Trump’s Economic Recovery Task Force — argued that an increase in gold prices and the financial market’s resilience to the crisis (last month, despite the economic paralysis, stocks saw their best monthly gains since 1987) indicated a severe recession, but a quick rebound.
“With the right policy prescriptions and states opening up for business quickly, we will see a very sharp contraction this summer with high unemployment followed by a strong recovery that will arrive within six months,” they wrote.
The analysis concluded that nine states will lead the recovery: Arizona, Colorado, Florida, Georgia, Nebraska, Nevada, South Carolina, Utah and Washington.
Several states have started to navigate reopening after Trump last week unveiled several key measures states should meet before lifting stay-at-home mandates, including a downward trajectory in confirmed cases of COVID-19, the respiratory illness caused by the virus, over a 14-day period.
Public health officials have warned that reopening too early could trigger a resurgence in cases and deaths from the virus.
“Unless we get the virus under control, the real recovery economically is not gonna happen," Dr. Anthony Fauci, the nation's top infectious disease expert, said during a recent interview on ABC's "Good Morning America.” "So what you do if you jump the gun and go into a situation where you have a big spike, you’re gonna set yourself back.”
Georgia, Tennessee and South Carolina were among the first states to make moves to reopen businesses, though it's unclear whether they meet the necessary criteria.
Nine states that will slow down the recovery, the economists said, are Connecticut, Illinois, Michigan, New Jersey, Ohio, Pennsylvania, Rhode Island, Texas, Wisconsin and New York, the American epicenter of the disease. Texas will be among the badly hit states because of the plunge in oil prices, they wrote.
New York, California and Pennsylvania already extended stay-at-home orders this month. Many are also working to expand testing capabilities
Reported cases in the U.S., the world’s hardest-hit country, topped 1 million Thursday, with nearly 61,000 deaths caused by the disease, according to data compiled by Johns Hopkins University.