Our economy is in a massive hole. And it might stay there

As much as TrumpWorld and Wall Street try to convince people that we'll see a V-shaped recovery with the economy getting back near normal in a few months. But reality keeps intruding on those statements, including today's projection from the International Monetary Fund.

The IMF's latest dire World Economic Outlook update is nearly 2 percentage points worse than its last forecast in April, representing a slower-than-expected global recovery. The organization also downgraded its 2021 growth projections from 5.8% to 5.4%, which would leave global gross domestic product next year about 6.5 percentage points lower than pre-pandemic projections from January.

"We are definitely not out of the woods," IMF chief economist Gita Gopinath said at a news conference. "We have not escaped the great lockdown."

Gopinath said the crisis has had an "unprecedented global sweep." Real GDP growth is projected to decline 8% for advanced economies in 2020, while emerging market and developing economies could see a 5% decline – nearly 3% worse than the IMF forecasted in April. Contact-intensive economic sectors such as tourism "remain depressed" and trade is expected to collapse by 12%, according to Gopinath. Public debt will also exceed a post-World War II peak, according to data shared during the news conference.

And as UW's Menzie Chinn notes at Econbrowser, the IMF says that the US is among those places that'll have a lower GDP at the end of 2021 than they did at the end of 2019.

And a big reason why is because we have a COVID-19 pandemic in America that is resurgent. In no small part because our "businessman president" and other Republicans wanted to "keep it out of sight, out of mind", and they ended up reopening the economy too fast and too soon, as they tried to trick the average person into thinking things were returning to normal.

The U.S. broke its record for the highest coronavirus cases recorded in a single day, with 36,358 new positives reported on Wednesday, according to a tally by NBC News.

Wednesday’s cases top the previous highest day count from April 26 — the first peak of the pandemic in the U.S. — by 73 cases, according to NBC News tracking data. The World Health Organization saw its single-day record on Sunday with more 183,000 cases worldwide.

Health experts told NBC News on Monday that the resurgence in cases in Southern and Western states can be traced back to Memorial Day, when many officials began loosening lockdowns and reopening businesses.

Meanwhile, the Northeast region have seen significant decreases in cases as authorities in the area have maintained policies around social distancing and wearing face masks.

This graph is damning, particularly when you consider that there are 120 million more people in the EU than in the US.

That's a whole lot of lost productivity and lives. And it's not going to encourage more people to go out, travel and spend.

Even when financial media says something is an "improvement", it still leaves us far behind where we were. A good example was this touted "improvement" in US business conditions...that really wasn't an improvement.

The flash U.S. service sector purchasing managers index rose to a 4-month high of 46.7 in June from 37.5 in the previous month, IHS Markit said Tuesday. The flash manufacturing sector purchasing managers index rose to a 4-month high of 49.6 from 39.8 in May. Though an improvement, the readings remain slightly below 50 which indicates worsening conditions. The flash estimate is typically based on approximately 85%-90% of total survey responses each month. The composite index rose to 46.8 in June from 37 in the prior month.

What happened: U.S. firms reported a slower contraction in June as businesses began to reopen on a larger scale after the lockdowns imposed to combat the coronavirus pandemic. Still some businesses reported that renewals and requests for new business were muted. There were further cuts in workforce numbers. Firms also reported higher prices for the first time since February. Separate readings from the eurozone showed that their economies are no longer collapsing.

Hate to tell you, but a "slower contraction" means it's still falling! That's not the direction you want to be going!

We still have new unemployment claims running at well over 1 million a week, most places have reopened in the last few weeks, so there's no one-time blip to counteract the new layoffs, like we saw in May. In fact, Wisconsin has had numerous mass layoffs announced in June - mostly in manufacturing, with more than 1,600 workers affected.

That's 700 more mass layoffs than Wisconsin had announced in May, and nearly 4 times the amount we had in February. And the real danger looming is when enhanced unemployment benefits run out next month and jobs have not returned. Between that cut off of income, and Moody's saying Congress refusing to give aid to state and local governments might cost 4 million jobs and 3% of GDP, and you can see that we are in significant danger of having things fall again.

Which helps explain why this was by far the most common prediction from economists in a 538.com survey.

And the biggest concerns from those economists that might lead to the recession deepening?

Ruh roh.