What is the shape of the recovery curve?
The United States, which froze to a standstill between March and May, is attempting to reopen its world-leading economy, returning even non-essential employees to work. But the crisis isn’t yet behind us. The American labor force lost 20.5 million jobs in the month of April. The unemployment rate is 14.5% with 33 million applying for unemployment benefits. Unemployment hasn’t been on this level since the Depression-era 1930s.
But if you’re one of the lucky ones who is still employed, everything’s okay, right? Not quite. Even the currently employed have seen salary cuts. A Marketplace-Edison Research poll found that 26% of those who still have jobs are paid less per hour and 36% are working fewer hours.
According to the US Census Bureau, retail sales were down 8.7% in March, more than double the decline during the 2009 economic crisis. Many large retail chains are closing stores and others are declaring bankruptcy.
In an attempt to stabilize the situation, 30 states have already announced easing of restrictions on factories, stores, and outdoor activities. But it comes with risks. In several states — South Carolina for instance — the lockdown was lifted before the number of cases significantly declined. In other states that have already opened up—Alabama, Iowa, South Dakota, Utah—there’s been a noticeable increase in cases over the last few days. Texas is also slowly loosening restrictions despite a steady number of new cases. Since the virus has an incubation period of two weeks, the real effect of these measures will only be discovered in two weeks’ time.
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