After pocket lockdowns, get ready for pint-sized recoveries.
From Tokyo to Miami, authorities are imposing localized curbs on social and commercial life in an an attempt to constrain resurgent waves of the new coronavirus without locking down completely. Targeted mini-measures were designed to avoid the devastating contractions of the last quarter, yet they are inevitably undermining the return to economic health. That reality was borne out in Federal Reserve Chairman Jerome Powell's dour view of the world economy this week.
Japan's expansion will be shaved by an annualized 0.8 percent should a surge in Tokyo COVID-19 infections prompt renewed domestic travel limits, Goldman Sachs Group Inc. warned Tuesday. That prospect would bear out Bank of Japan Gov. Haruhiko Kuroda’s caution that, after an initial spurt, the rebound will slow. China, the first major economy to reopen after a deep freeze, lost momentum in July. India’s struggles will probably warrant another interest rate cut next week; some form of debt monetization is conceivable this year.