This week, a slew of data showed just how much the coronavirus pandemic and lockdowns to curb the spread of disease have damaged the US economy.
Many economic indicators released this week posted record slumps, fell to lows not seen in years or decades, or surpassed data from the Great Recession of 2007-2009.
"For awhile, we are going to be in territory that was just unthinkable," Heidi Shierholz,a senior economist at the Economic Policy Institute, told Business Insider. In comparison to the Great Recession, the current situation is a much more rapid deterioration, she said.
For example, the worst weekly jobless claims report during the Great Recession showed fewer than 1 million Americans filed for unemployment insurance — now, the US is seeing sustained weeks of millions of claims. "We're just in this extraordinary space," Shierholz said.
The great lockdownOver the course of the last four weeks, the US has shut down large parts of its economy to curb the spread of COVID-19, the illness caused by the new coronavirus. That's meant banning nonessential businesses and asking consumers to stay at home and practice social-distancing.
For many economists, a US recession spurred by the coronavirus pandemic is a foregone conclusion. Many are forecasting staggering declines in US gross domestic product in the second quarter — JPMorgan economists are expecting a 40% drop. That could send the unemployment rate to 20% in the April jobs report, nearing the all-time high of 24.9% seen during the Great Depression.
There have been efforts by the government to effectively press pause on the US economy until it can eventually reopen. President Donald Trump signed a $2 trillion coronavirus relief act at the end of March that included expanded unemployment, aid for businesses, and direct $1,200 checks to many Americans. There is potentially more aid on the way — on Thursday, the Small Business Administration ran out of relief funding, having exhausted $349 billion in just two weeks.
The Federal Reserve has also gone beyond its Great Recession toolkit to provide support to state and local governments and more. Fed Chairman Jerome Powell has shown that the central bank has a "do whatever it takes" approach to boosting the US economy.
What will recovery look like?Still, as more data is released, the dire situation in the US is becoming more clear. And, there could be more pain ahead as lockdowns continue. While President Trump said he'd offer guidelines for states to begin reopening economies, the entire country won't be back in action at once. On Thursday, New York Gov. Andrew Cuomo said that the state's stay-at-home order would be extended to May 15 instead of April 30.
Now, economists are watching to see just how bad the situation gets before the US can safely reopen its economy and begin a recovery. While President Trump has boasted of a quick rebound, economists aren't so sure. It's more likely any recovery will take a more gradual U-shape instead of a V-shape, especially if consumer spending remains depressed.
"A V-shaped recovery is pretty low on my list likely outcomes," Seth Carpenter, chief US economist at UBS, told Business Insider. When the worst is over, the US will go back to growth, but it will be "tepid because you're balancing out the natural instinct of a rebound with a bunch of caution from the households and businesses," he said.
Here's all the economic data released this week that show the full impact of the coronavirus pandemic on the US:
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