The economic impacts of COVID-19

Unemployment is on the rise as stay-at-home orders spare only the essential

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Photo courtesy of Jason Taellious at Flickr.com

A sign outside of a business in Olympia, Washington.

JACKSONVILLE, Fla.– The coronavirus has rapidly spread across the world and U.S.

An April 8 post by the CDC has the total number of cases in the U.S. at 395,011 and the total death count at 12,754.

The virus has also had a significant impact on the economy.

With the number of cases increasing by the day Florida governor Ron DeSantis signed an executive order on April 1 that issued a stay-at-home policy for the state. With this order in place, only employees of essential businesses are to remain working.

Some examples of essential workers are public healthcare, law enforcement, public safety, energy and water/wastewater.

These actions were taken in order to reduce the spread of the virus. It encourages people to stay home and follow social distancing guidelines.

According to a 2020 post by the CDC, these guidelines include stay six feet from other people, do not gather in groups, and stay out of crowded places and avoid mass gatherings.

While all of these measures are in place to help keep the public safe, it will very likely have a deep impact on our economy.

According to 2020 news release by the Bureau of Labor Statistics, “The number of unemployed persons rose by 1.4 million to 7.1 million in March.”

With the rapid increase of unemployment many Americans worry about a repeat of the 2007-2009 Great Recession. According to a March 17 post by Fortune, a recession is a period when economic output contracts for two straight quarters.

An Oct. 11, 2019 article by History.com helps explain what caused the Great Recession of 2009. With the housing boom in the U.S. during the mid-2000s, many mortgage lenders acquired high risk mortgages in hopes to make a profit, but it proved catastrophic.

According to the Encyclopedia Britannica, what resulted was high rates of unemployment, companies such as GM and Chrysler declared bankruptcy, and confidence in the economy plummeted.

The virus has affected a multitude of Americans and according to a March 26 post by Vox, the recession is already here.

“The coronavirus crisis has sent the economy into a tailspin in the United States and around the globe,” said Emily Stewart in the article. “The restaurant industry has ground to a halt. So have air travel, auto manufacturing, hotels, gyms, and cruise lines.”

The article also explains how the warning signs for the recession already exist even though the data doesn’t show it. The most important of the warning signs is the spike in unemployment.

This is uncharted territory and how severe the recession will be if it does occur is unclear.

Everyone in America is facing new trials and worried about the worst outcome. A recession is possible but, it is unknown when, if and how bad it might be.

Janet Yellen, the former Federal Reserve chair, recently did an interview with the Brookings Institute published in an article on April 1 on the possible economic effects of the virus.

“Federal Reserve statistics show that a large share of Americans couldn’t come up with $400 to deal with an emergency,” Yellen said in the interview. “Many households have little savings and a lot of debt and are very poorly positioned to deal with the impact of job loss and increases in health care expenditures.”