The next terrifying phase of the coronavirus recession

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The economy is now moving sideways as business failures mount and the virus continues to maim and kill. New unemployment insurance claims, for example, peak at more than a million a week, more than double the highest rate reached during the Great Recession, indicating that more job losses are becoming permanent. After increasing when the government sent stimulus checks and increased unemployment insurance payments, consumer spending is still falling, down 10% from a year ago. Homebase, a human resources software provider, says the rebound has reached a “plateau” in terms of hours worked, share of employees working and number of open businesses.The next terrifying phase of the coronavirus recession is here: a damaged economy, a virus that is spreading faster than in March. The disease itself continues to wreak bloody and direct havoc on workers, with more than 60,000 Americans tested positive per day and tens of thousands suffering from prolonged illness. The statistical value of American lives already lost to the disease is around $ 675 billion. The current phase of the pandemic also takes a heavy secondary toll. States whose epidemics have not been alleviated have been forced to lock out or suspend their reopening, killing weak businesses and disrupting the labor market. Where the virus spreads, the economy stops.

It is not only due to government edicts. Some consumers rushed to bars and restaurants and resumed shopping and traveling. Young people, who tend to be less sick with coronavirus than the elderly, appear to be the cause of today’s pandemic. But millions of others make it clear that they are not risking their lives or the lives of other members of their community to go out. Avoiding the virus, more than stopping orders, seems to affect consumer behavior. Places without official lockdowns have experienced financial collapses similar to those that have them, and a study by economists at the University of Chicago found that declines in economic activity are closely linked to “fears of infection” and are “strongly influenced by the number of reported COVID deaths” in a given county.

In other respects, the spread of COVID-19 prevents Americans from returning to work. The perception of public transit as dangerous, for example, makes it costly and difficult for commuters to access jobs. Schools and daycares are struggling to figure out how to reopen safely, which means that millions of parents are faced with juggling work and child care. It is a disaster. “The persistent uncertainty about resuming education in person is not the result of embezzlement, but a total impractical,” said former head of the Department of Homeland Security, Juliette Kayyem, in Atlantic. “Four months of home care orders have shown that if schools are not available, a city cannot function, a community cannot function, a nation cannot protect itself.”

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