By Alan Wolf, YSN
The nation’s economic recovery from the COVID-19 crisis is likely to be an uphill climb and will probably vary by location.
That’s the word from Jack Kleinhenz, Chief Economist for the National Retail Federation (NRF), the retail industry’s largest trade association. Kleinhenz’s forecast comes as governors begin lifting stay-at-home directives and stores including furniture showrooms reopen for business.
“As states begin to slowly reopen, and assuming the coronavirus does not come back, the economy should begin a process of gradual recovery,” he noted. “My overall impression is that the recovery will have fits and starts among states, regions and cities depending on the severity of the pandemic in their localities.”
Kleinhenz acknowledged that coronavirus has wreaked havoc on the U.S. and global economies, and that it could take several months just to “assess the full consequences and project a path forward.”
Indeed, U.S. gross domestic product (GDP) shrank 4.8 percent in the first quarter of 2020 after growing at an annualized rate of 2.1 percent at the end of 2019, the NRF said, ending an unprecedented 10-year period of economic expansion. The quarter ended with an 8.7 percent decline in retail sales in March, representing the worst month-over-month drop on record.
Kleinhenz said the decline in first-quarter GDP is “likely just a murmur” compared to a much deeper contraction that is expected during the current three-month period.
“Getting back to work or shopping in a pre-virus manner is difficult to predict at this time,” he said, “with households likely to tiptoe back in rather than making an immediate return to the lives they experienced before.”
But the economist’s outlook remains rosier for the longer term. “In the end, shopping is more than a transaction,” he said. “It is a social activity that is part of the fabric of American life, making it likely that consumers will want to return to normal shopping habits once the pandemic subsides and the economy fully reopens.”