- Sweeping lockdowns to curb the spread of coronavirus shocked the US in mid-March and quickly pushed the economy into a recession.
- But states started to slowly reopen parts of their economies in April, and by the end of May, all 50 US states had relaxed at least some of their lockdown restrictions.
- Now, real-time data, or “high-frequency” indicators, are showing signs of life again as the US economy reopens and begins to recover.
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There are encouraging signs that the US economy is beginning to recover from the depths of the coronavirus pandemic that swiftly pushed the country into a recession.
The US economy was swiftly decimated by the coronavirus pandemic and pushed into a recession that could rival the Great Depression. In mid-March, parts of the country abruptly went into lockdown to curb the spread of disease, closing schools, sending non-essential workers to do their jobs at home, and shuttering restaurants, shops, and places of entertainment.
Claims for unemployment insurance spiked almost immediately, and hit a high of nearly 7 million Americans filing in one week at the end of March. In April, the US lost a record 20.5 million jobs, and the unemployment rate surged to 14.7%, the highest since the depths of the Great Depression.
But in the stretch of a month, green shoots of a recovery began to appear. States began slowly reopening their economies in April, and by the end of May, all 50 states had relaxed at least some of their coronavirus restrictions. As businesses adjusted to the new normal, some workers returned to their jobs and consumers — fueled by fiscal stimulus and unemployment benefits — began to shop again.
In May, the US economy added 2.5 million jobs, and the unemployment rate declined to 13.3%, a surprise to economists that expected a dismal report. In the same month, retail sales rebounded, jumping 17.7%.
To be sure, there are signs of increasing coronavirus cases since states have reopened, prompting fears of a surge that could lead to more shutdowns and further hurt the US economy. Still, US states have continued to carefully reopen with measures in place to protect workers and consumers.
Given the speed of the rebound, economists and analysts have started relying more heavily on real-time data, or so-called high-frequency indicators that have less of a lag than the nonfarm payrolls print or monthly retail sales figures.
A number of them are showing that industries hit hard by the coronavirus pandemic, such as restaurants, hotels, and airlines, are starting to recover as the economic reopening pushes forward.
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