Restaurants Cameron Mitchell
The devastating economic cost of the coronavirus pandemic will crystallize into a number one Thursday. The GDP report from the Department of Commerce is expected to show the highest contraction in modern American history in the quarter between April and June.
“It will be awful,” said Nariman Behravesh, chief economist at IHS Markit. “We’ve never seen anything like it.”
The report is expected to show that the economy slowed at an annual rate of around 35% over the quarter as shops and factories closed their doors in a desperate effort to reduce the spread of the virus. That’s about four times the fall during the worst quarter of the Great Recession.
Tens of millions of people lost their jobs this spring before the effort to reopen the economy began. That recovery is still incomplete and could be jeopardized by a new rise in infections.
“As the virus began to re-emerge in major states like Texas, California, Arizona, Florida, it is disappearing very quickly,” Behravesh said.
Restaurant owner Cameron Mitchell believes the hurricane pandemic. What appeared to be resuming business in June turned out to be simply the source of the storm, and is now again overwhelmed by the winds of a force of health.
“Our associates are more afraid to work today and guests are more afraid to go out, so sales have declined,” Mitchell said.
Business at its restaurants in Florida had almost recovered to pre-pandemic levels in June but has since declined sharply.
Other industries enjoyed a longer-term recovery, although few returned to where they were in February.
Dental offices are generally one of the most stable parts of the economy, but are closed for all services except emergency during much of the spring. Dental engineer Alexis Bailey had been off work for 10 weeks before her office in Lansing, Mich., Reopened in late May.
At first, she was reluctant to go back to work while the virus was still circulating.
Christina Dauka, MSDH
“I was terrible,” Bailey said. “I wasn’t happy to come back. But I have a job to do and I love doing it and I want to help people. We talk about how essential we are, so that’s what we had to do.”
Within an hour of returning to work, Bailey said, she began to feel comfortable, particularly with the additional protective equipment and other safety precautions her office adopted.
“I’m telling my patients all the time that I wouldn’t be here if I didn’t feel safe,” she said.
Nationwide, dental offices added more than a quarter of a million jobs in May and another 190,000 in June. And there was no shortage of patients.
She thought no one would want to come. “But we reported,” Bailey said. “People lose their teeth clean. They want to catch up. Every time they come in, they say, ‘It was nice to get out of the house and feel safe and talk to someone.’ “”
Production at the factory began to resume, along with construction. But airlines and amusement parks are still struggling.
“It’s very much a kind of two-tier economy right now,” Behravesh said.
The unemployment rate approached 15% in April, and in June was still higher – at 11.1% – than during any post-war recession. The economic downturn was mitigated somewhat, however, by an unprecedented level of federal spending.
Wages and salaries fell sharply in April, but this was more than offset by the $ 1,200 aid payment the government sent to most adults and with supplementary benefits for unemployment of $ 600 a week.
Those government payments helped prevent a sharper decline in consumer spending – the nature of life in the U.S. economy – and allowed struggling families to buy groceries and pay rent. .
Federal Reserve Chairman Jerome Powell said Wednesday that the money “was well spent. It kept people in their homes. It kept businesses in business. So that’s a good thing.”
Those extra unemployment benefits are expiring this week. With coronavirus infections still threatening recovery, additional federal support is likely to be needed.
“As long as we have the virus under control, we will need more help,” Behravesh said. “Our thinking is that we will not be reaching pre-pandemic levels of economic activity until sometime in 2022.”
Restaurant owner Mitchell says his business lost $ 700,000 in June alone. He predicts a wave of restaurant failures unless the federal government provides more relief.
“No one is looking for a brochure here,” he said. “We’re looking to survive.”
He is watching the news of vaccine trials up close in hopes that eventually dinner will feel comfortable eating again in large numbers.
“I don’t think it’s the next few weeks,” he said. “But I tell our team,‘ Every day that passes, is a day closer to the end of this thing. “”