It could take years for economy to bounce back from COVID-19 outbreak: Expert

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Wednesday, April 15, 2020
It could take years for economy to bounce back from COVID-19 outbreak: Expert
COVID-19: How long will this recession last? as reported by Bob Brooks during Action News at 11 on April 14, 2020.

Roughly 50 to 70 million Americans are supposed to receive their direct cash COVID-19 stimulus payments this week, and that's just the start. And for most, if not all, this money is desperately needed.

For Eve Lowen and Chris Schmidt of South Philadelphia, shopping isn't so fun right now. Even if it's for groceries.

Like so many, they've lost their jobs.

Lowen is in entertainment. Schmidt is a lead stage carpenter.

"I was building stage sets every day for a 30-week contract and that was instantly canceled," said Schmidt.

So now they're living off savings.

"But it's not going to last forever," said Schmidt.

We know the virus and our ability to beat it dictates when commerce resumes.

While we wait, economic uncertainly and fear grows.

On Tuesday night, Action News spoke with economist Ryan Sweet with Moody's Analytics.

He says this may have fundamentally changed the American business model.

"Do consumers change their behavior permanently? Do businesses adjust how they do travel? Less face-to-face meetings?" says Sweet.

He says we've all watched the Dow Jones Industrial Average plunge in March, then last week start to rally.

But with millions of people now unemployed and businesses missing months of revenue, he says it'll take quite a while for things to return fully.

"Take for example today, unemployment in the United States is close to 17%. At the peak of the Great Recession it was at 10%."

We know putting food on the table and paying rent and mortgages gets tougher with each missed paycheck.

But he says if you can hang on, the US economy will return, it always has.

"It's going to be like a dimmer switch. We're going to be turning the lights back on slowly. It's going to take a few years until we're back to where we were prior to the coronavirus," said Sweet.