Leaning into recession

The coronavirus pandemic takes a toll on the economy and stock market.


Illustration by Molly Roberts

Experts fear coronavirus could have a detrimental effect on the economy.

Experts fear that coronavirus will cause an economic downturn in the stock market that could go into next year, and even beyond that. In response to government restrictions on businesses to lessen the spread of the virus, unemployment rates are increasing and stores are closing.

“I’ve seen business change all over the world during this pandemic,” said Senior Kate Gallaway. “Restaurants are closing way earlier and only doing takeout.”

The coronavirus’ severe effect on the economy could persist even after the virus is contained. Experts believe the recover will be slow and that even after the pandemic is over people may be less likely to go to crowded restaurants or concerts due to fear of contamination (nytimes).

“Typically, we see recessions come as a result of structural or cyclical change, but this slump is far different as vast sectors of he economy have come to a complete standstill,” said Senior Jack O’Keefe. “Airlines, restaurants, and various companies in the manufacturing sector are recording previously unheard of losses in revenue so this is something that could be potentially very detrimental to the economy.”

Although the virus impacts all businesses, it’s hit industries such as retail, transportation, and travel the hardest. Quarantine has forced many people to take out loans due to a loss of jobs. The unemployment rate is around 13 percent and much higher than it was during the Great Depression (nytimes).

“The coronavirus has caused some of the biggest losses in the equity market” said Senior David Feng. “It will take some time for the stock market to recover from the virus as the hospitality and travel industry are all hit very hard as some stocks like American Airlines have dropped by 85%.”

Even though economists are uncertain about whether the economy will enter a recession in 2020, the longer the pandemic lasts the more dramatic effects it will have on the economy. The economy is highly dependent on whether health officials can manage to slow the spread of the virus.

“There will have to be massive mobilizations of workers to get back to work, and every week the economy is shut down will just be adding to our domestic losses in revenue,” O’Keefe said. “I suppose we will just have to see how it goes.”