A cruel paradox: Beating virus means causing US recession
Associated PressWASHINGTON — The coronavirus is dealing a death blow to the longest U.S. economic expansion on record, triggering layoffs and putting intense strain on the nation’s financial system. “The U.S. has 2.6 million waiters and waitresses, nearly all of whom will be unemployed by Friday,” said Michael Hicks, an economist who directs Ball State University’s Center for Business and Economic Research. The record is 1.96 million job losses in September, 1945, right after V-J Day.’’ “We are already in recession,’’ said Robin Brooks, chief economist at the Institute of International Finance, an association of financial companies. For now, Brooks fears “all the things we don’t see: The social distancing, the quarantining and the uncertainty aren’t in the hard data yet.’’ The early evidence is sobering: The Federal Reserve Bank of New York reported Monday that manufacturing activity in New York state plunged this month to the lowest level since the Great Recession year of 2009. Mark Zandi, chief economist at Moody’s Analytics, calculates that every $1 of wealth lost to falling stock prices reduces by nearly a nickel spending by consumers, who drive about 70% of U.S. economic activity.
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