On Thursday, the latest sign that the economic decline may be bottoming out came as the government reported that 1.9 million Americans had applied for unemployment insurance during the last week of May – a painfully high number but the lowest since the novel coronavirus started spreading widely in the country in March.

The jobs data follows modest signs that the economy may be inching toward the beginnings of a recovery as the nation reopens. Mortgage applications have surged in recent weeks amid record-low interest rates. Consumption of oil and petroleum products is up. The number of travelers at airports, as measured by the Transportation Security Administration’s precheck numbers, have begun increasing in recent weeks. Even restaurant reservations have inched up.

“This covid recession will go down as the shortest and arguably the most severe in history,” said Mark Zandi, chief economist at Moody’s Analytics.

Zandi said the recession caused by the pandemic is likely to be over, almost as abruptly as it started. He points out that private payrolls declined by 2.76 million people in May, according to a report released Wednesday by payroll processor ADP. That was far below analysts’ estimates.

Yet, even when economists declared the Great Recession officially over in June 2009, the unemployment rate did not return to prerecession levels until 2017, a reminder that the economic pain can linger for years. Similarly, experts predict that this recovery will take years.

Cheered on by President Donald Trump, some states have lifted some of their most severe restrictions in recent weeks, more businesses have reopened – at least partially – and brought back workers. But there is still no sense of when commerce will resume at the scale seen late last year. Until there’s a widely available vaccine against the novel coronavirus, the economy is likely to continue struggling at a low rate. And public health officials continue to warn of a second wave of infections in the fall or winter, which could bring on another round of shutdowns.

For now, the U.S. economy is in limbo, with many companies operating at half capacity and a big question mark about how long firms can survive that way. Idled workers aren’t sure when they will be called back, so they are hoarding cash. State and local budgets have been decimated, which is likely to trigger more layoffs later this year.

“These are extremely ugly numbers, but because there were so many forecasts talking about a total collapse of the economy, the numbers we’re seeing, while extremely bad, aren’t the worst-case scenario,” said Lindsey Piegza, chief economist at Stifel Fixed Income. “It’s not as bad as it could have been. It’s an odd silver lining.”

The dueling stories about this economy – it is improving yet remains greatly depressed – are likely to play out all the way through the presidential election. Trump is seizing on any data showing a rebound and is taking credit for the bounce-back in the stock market, where the S&P 500 index just experienced its best 50-day rally since 1952.

“By the time of [the] election, I believe the economy will be doing phenomenal numbers. Big job increase, big GDP increases, and that’ll be before the election,” Trump said Wednesday on Fox News Radio’s “The Brian Kilmeade Show.”

“The stock market is booming,” he said.

But presumptive presidential nominee Joe Biden and other Democrats have been quick to point out that millions of Americans remain out of work and that the job losses aren’t as bad in other countries, raising questions about the U.S. government’s response to the pandemic. Biden predicts a slow recovery.

“Economic growth is likely to be back in positive territory by the third quarter,” Stifel’s Piegza said, but “what we’re really talking about is going from extremely terrible to slightly less terrible.”

Official government growth data looks at how much the economy changes from quarter to quarter. Since the April-to-June period is likely to be one of the worst in U.S. history, the third quarter, even if sluggish, will look like a big surge, giving Trump a talking point just before the election.

What matters to many Americans is the job situation. When Americans feel it is easy to get work, they tend to give the economy more-positive ratings and spend more. When people fear they will lose their jobs, have to take pay cuts or have trouble finding new work, they tend to save more. In April, the U.S. savings rate hit a record high of 33 percent, a sign of how scared people are.

“The savings buildup over the past two months can hardly be considered firepower for future consumption,” Bob Schwartz, senior economist at Oxford Economics, said in a recent note. “The stimulus checks were a one-time payment that has already run its course.”

The unemployment rate for May, due out Friday, is expected to be close to 20 percent, a level not seen since the 1930s. The Congressional Budget Office released projections this week showing it doesn’t expect the U.S. economy to fully recover until 2030.

The CBO also said that the pandemic will shrink the size of the U.S. economy by nearly $8 trillion in the next decade, assuming there are no more coronavirus waves that trigger crippling shutdowns in coming months.

More than 40 million people have applied for unemployment benefits during the pandemic, and roughly 30 million are receiving them, previously unimaginable figures that wiped out a job market in which unemployment was at historic lows as recently as February.

“Whatever optimism there is from seeing some people return to work, we’re not seeing a drastic move off unemployment,” said Jay Shambaugh, a senior fellow at the Brookings Institution. “If anything, we’re seeing a stable number of people on unemployment. Last year it was around 1.5 million.”

Still, signs that the economy is no longer plunging are an encouraging start, forecasters said.

New data from the Census Bureau’s weekly Small Business pulse survey shows businesses are starting to get back on their feet. In the week ending May 30, about 3 in 5 small businesses reported revenue of above $15,000. That’s a massive reversal from a month earlier, when 60 percent of businesses reported little or no revenue.

Other signs of a turning point are that only a quarter of businesses closed locations in the past week, down substantially from a month earlier, and businesses are reporting fewer supply-chain problems and missed loan payments.

Flights are also picking up. American Airlines announced Thursday an expansion next month as travel demand picks up again. For July, the airline expects to fly 55 percent of last year’s domestic trips, up from a mere 20 percent in May.

Americans are also beginning to eat out again. Restaurant reservations on the online platform OpenTable showed that more than 30 percent of its participating restaurants had begun taking bookings as of June 3, vs. zero throughout most of April.

The Federal Reserve has scaled back its purchases of government bonds, a vote of confidence that the worst probably is over.

Yet, the manufacturing sector is a telling example of just how modest any rebound is.

The industry experienced its worst contraction in April since the Great Recession. The Purchasing Managers’ Index slumped to 41.5 in April, signaling a deep contraction. In May, the index rose to 43.1, an improvement but far below the 50-mark that is considered healthy and expansionary.

Such contradictions are also apparent in the job-market data, economists say. New jobless claims are trending lower, but even with so much of the economy reopening, nearly 2 million people filed new applications for unemployment aid.

“It’s a sign that things are not getting as worse as they were before,” said Nick Bunker, economic research director at Indeed Hiring Lab. “We have seen a reduction in the pace of people becoming jobless. So that’s positive. But we’re still seeing claims at astronomical levels than what we saw before this crisis.”

Job postings tell a similar story. The number of jobs posted on Indeed’s site in May was 5 percent higher than in April. But those numbers were still 34 percent lower at the end of May than at the same date in 2019 – a staggering drop.

“It is, at most, an extremely partial rebound,” Bunker said. “Postings are still growing at a rate far slower than we saw last year. I think it’s worthwhile celebrating that the pace of things getting worse has slowed down. But that means we haven’t hit a bottom yet. There are still a fair amount of folks losing their jobs and folks not hiring yet.”

The SPV was registered on February 13 with a capital of Bt4.5 billion, with Bangkok Airways being the largest shareholder with a 45 per cent stake, BTS Group holding 35 per cent, Sino-Thai Engineering and Construction 10 per cent and the policy committee the remaining 10 per cent.

Meanwhile, the SPV board of directors will include Prasert Prasatthong-Osot, Putthiphong Prasatthong-Osot, Pradit Theekhakul, and Anawat Leelawatwatana from Bangkok Airways, Keeree Kanjanapas, Suraphong Laoha-Anya and Kong Chi Keung from BTS Group and Pakpoom Srichamni and Chaikaew Techapichaya from Sino-Thai.

The policy committee is reportedly partnering up with BBS Group for the project, though it first needs permission from the Royal Navy to use the 6,500 rai for the development. BBS Group will only be able to go ahead with the construction once the policy committee issues a “notice to proceed”.

Ahead of the notice, BBS has to come up with a master plan for the four phases of developing the airport and surrounding area, which is expected to eventually accommodate 60 million passengers.

Phase 1, which is expected to accommodate 16 million passengers, higher than the 12 million initially specified, will include the construction of taxiways for planes, high-speed rail and traffic links to the airport. BBS Group estimates this phase to cost about Bt40 billion.

Construction of the first phase will begin after the environmental impact assessment (EIA) report has been considered, a coordination panel for the high-speed link is set up and the entire project is tied together so work can be done simultaneously.

He added that the department has been closely monitoring the market situation and will launch these activities during favourable periods. The planned activities include the promotion of Thai goods via online platforms of its foreign partners including China’s Tmall, India’s BigBasket and global Amazon.com as well as in shopping malls overseas.

The department has already launched online and offline promotions for Thai goods in China and Hong Kong.

It has also launched match-making activities between Thai exporters and US importers covering 20 categories via an online channel from May to September.

He added that the department maintains its export growth target of 3 per cent this year, thanks to high demands for Thai products such as food, medical supplies and furniture.

Inflation in May was -3.44 per cent year on year, the lowest in a decade and in the minus territory for a third month in a row.

“Technically, Thailand has entered deflation, marked by a drop in the price of goods and services, with inflation entering negative domain for three months – March -0.54 per cent, April -2.99 per cent and May -3.44 per cent,” said Pimchanok Wonkhorporn, director of the Commerce Ministry’s Trade Policy and Strategy Office.

The dropping price of oil matched with government subsidies in electricity and water have largely contributed to the negative inflation, she told the press on Thursday (June 4).

However, she said, core inflation has expanded 0.1 per cent, suggesting that the price for some goods and services (excluding food and energy items) has risen, so there should not be concerns about deflation.

Separately, Bank of Thailand (BOT) senior director Don Nakornthab said the country was not experiencing deflation from the financial market’s point of view. He said BOT follows the European central banks’ definition of deflation, which takes four conditions into account:

–    Negative inflation for a prolonged period;

–    Many goods and services experiencing negative inflation;

–    The five-year forecast on inflation rate is significantly lower than targeted; and

–    The economy contracts combined with rising unemployment.

He said the BOT believes inflation next year will return to positive, as the five-year forecast is 1.8 per cent, which is close to the target of between 1 and 3 per cent.

However, he warned that there is a risk of deflation if the economy experiences deep contraction coupled with a delay in recovery.

“The BOT has to closely monitor the economic situation and inflation,” he added.

Charl Kengchon, executive chairman at Kasikorn Research Centre, is optimistic that the economy will start recovering in the second half of the year.

“Thailand is unlikely to experience a lost decade like Japan did when it experienced deflation, hitting the vicious cycle of the prices of goods and services falling, consumers not spending due to loss of confidence and the economy contracting subsequently,” he said.

He added that deflation in Thailand had been caused by the drop in energy prices and the impact of the lockdown.

Economic activities are returning as lockdown restrictions are being eased, and the economy in the third and fourth quarters should expand on a quarter-to-quarter basis, he said. However, the economy will contract by 6 per cent for the entire year, though it may grow next year and return to pre-Covid crisis level in 2022.

But Amornthep Chawla, head of research at CIMB Thai Bank, was pessimistic. “We have entered deflation now as prices are also falling due to weak demand. People don’t have much money to spend,” he said.

He also warned that the public will suffer hardship once the government’s financial handouts come to an end. He added that the price of energy and other products and services may rise in the next few months, but people may not be earning enough to match that rise in cost of living.

According to CIMB’s projection, the economy will shrink sharply at 8.9 per cent this year, deeper than the contraction in 1998 during the Asian financial crisis.

Over five years — from 2015 until May 2020 — the value of investment in the special economic development zone amounted to Bt24.699 billion. There are 4,223 businesses with total registered capital of Bt8.409 billion. Most of the companies are small and medium-sized enterprises (SMEs), with about 98 per cent involved in construction, logistics, manufacturing garments, real estate and hotels, resorts and suites, aquatic products, electricity generation and wood products.

In addition to establishing new businesses, there were also requests for investment promotion from the Board of Investment (BOI) for another 75 projects totalling Bt11.043 billion for garments, plastics, pet food, vehicles, machinery and parts, construction equipment, hospitals, etc.

The private sector’s investment in Trat, Kanchanaburi and Nakhon Phanom’s special economic development zones totalled Bt5.106 million.The number of privileges requested under the investment promotion measures of the Customs Department for two projects in Tak and Songkhla in the special economic development zone totalled Bt140 million.

As for the management of foreign workers in special economic development zones, it established a one-stop service centre for labour. The number of foreign workers coming to work in the area, between October 2017 to February 2020, totalled 385,487 people of different nationalities. Of the total, 344,478 people — 155,361 Cambodian workers and 189,117 Myanmar workers — came on a seasonal basis.

The NESDC said basic infrastructure development is on average about 70 per cent complete and key projects will be gradually completed by 2022. Many projects were completed in 2019, such as Highway 12 in Tak province, Mae Sot Airport building, the second bridge over Moei River, the new Sadao Customs checkpoint and the Mae Sot border checkpoint No 2.