Some experts predict the peak of the pandemic will hit later this month, and then there'll be a steady decline in cases and deaths in the months thereafter. At some point later this year, hopefully, as many are predicting, the pandemic will be fully behind us.
But what will happen the day after the pandemic is officially over?
Is the U.S. Government the Answer?
And even though the Trump administration’s first salvo of federal aid has been approved, a $2.4 trillion-dollar relief package, it has yet to materialize in the economy. Even the program’s $350 billion paycheck protection program has yet to reach small business owners, the backbone of the U.S. economy.The longer the delay, the greater the impact of the economic lockdown.
Will Economy Crash 30 Percent—Or Rebound?
The delay in getting liquidity into the right areas of the economy is a big part of the challenge. That’s not to say that the massive money printing by the Federal Reserve is the way our economy is intended to operate, because it’s not. But that’s where we are, and where we have been since at least 2008.Pretending that that’s not the case isn’t acknowledging reality.
But again, the longer it takes to get the economy working again, the worse the economy will be going forward. The resultant recession or depression could last at least for the next year or so, but potentially much longer.
What Jobs Will Be Lost?
Over just the past two weeks or so, 10 million Americans have lost their jobs. Even if the pandemic ended today, many of those jobs wouldn’t come back soon, if they came back at all. There are several reasons for this.Employers who have either remained open or have just closed their doors have suffered significant financial losses. They’re operating, or will if they re-open, with fewer workers. That will last for months if not a year or more. For the time being, the days of 3 percent unemployment are behind us.
Will the Housing Market Recover?
In the first two months of 2020, the housing market was healthy. But by the week ending March 28, the number of newly listed properties fell by 34 percent year-over-year. Sellers just aren’t listing houses, and buyers aren’t eager to tour them during this pandemic.Not surprisingly, the number of mortgage applications has dropped off as well, by 24 percent year-over-year.
Federal Aid for Homeowners
That said, the federal government has put protections in place, including a 90-day moratorium for loans issued under Fannie Mae or Freddie Mac programs. The aim is to prevent Americans from losing their homes to foreclosure the way they did in the financial crisis of 2008–2009.Some Jobs Will Return Faster Than Others
With the economy likely in an official recession by the end of June, employee salaries, many of which have already been reduced, may be slow to return to their prior levels. Some jobs, like the gig economy, that includes ridesharing, deliveries, and other service-oriented jobs, may return quicker.But it may be some time before higher-paying jobs return in pre-pandemic numbers. Middle management jobs may remain fewer, as corporations will likely be running on leaner budgets, at least at first. And, as noted above, the housing industry, including construction and finance, may remain below pre-pandemic levels.
How quickly the U.S. economy recovers, whatever such a recovery may look like, may well depend on how quickly the repatriation efforts, as well as the relief programs, begin.