With signs that the Coronavirus pandemic in the U.S. has peaked, people are beginning to ask when normality will return. As of April 9th, there are about 30,000 new cases of the Coronavirus being reported daily in the U.S. This has been consistent over the past week and will likely continue to stay around this number. Considering this, we may currently be at the apex of the proverbial Coronavirus curve.
Despite the positive news of the number of new cases beginning to flatten, the numbers are still considerably high. At this point, the concern about reopening businesses too quickly is a large spike in new cases after doing so. Government officials do not want the strict quarantine measures implemented to be nullified by returning to normality too quickly. This would be disastrous.
Last week, 6.6 million Americans filed for unemployment. This is flat from the week before, but up 3.3 million from two weeks ago. Currently, the unemployment rate is at its highest since the Great Depression. With so many people out of work, the economy is suffering. Many publicly traded companies reporting earnings are showing sharp declines in net income. Employers also have become incentivized to furlough employees as many can collect more money while on unemployment. This is due to congress passing legislation that adds $600 per week to existing unemployment benefits.
The economic fallout from all of this could be catastrophic. With the national debt already more than 100% of GDP, increased government spending is exacerbating an already dire problem. Quantitative easing measures taken by the Federal Reserve such as interest rate cuts and bond purchases will cause inflation. Unless they implement quantitative tightening and/or austerity measures once things return to normal, another economic crash will ensue.
These are difficult times the country and the world are facing, but there is a beacon of hope. After three weeks, the amount of new cases appears to have peaked and case and death projections have fallen. Our country, nevertheless, is in an incredibly difficult predicament. If businesses reopen too suddenly, much of the efforts of the quarantine will have been for nothing. A second wave of outbreaks after the first would be devastating.
Concurrently, the longer the status quo continues the worse the economic fallout will be once this concludes. Beyond the superficiality of economic prosperity gauges, such as the stock market, the coronavirus is causing profound economic calamity. A full economic recovery could take years, if not a generation, depending on the duration of the national quarantine. Americans should adhere to the advice of the CDC, the President and their state’s governor. Doing so gives the country the best chance to recover from this as quickly as possible.