By Alan Wolf, YSN
While the reopening of businesses that were sidelined by the pandemic is an important step forward, it’s still too early to tell how quickly or smoothly the nation’s economy will bounce back from retail and other shutdowns.
That’s the word from Jack Kleinhenz, Chief Economist for the National Retail Federation (NRF), the largest trade association for merchants.
The shutdowns, which were mandated to bring COVID-19 under control, also changed the course of the U.S. economy almost overnight, he said, from the longest expansion on record to an “historic economic slump.”
The unparalleled drops in employment, gross domestic product, retail sales and other indicators that resulted from the forced closures are not comparable to anything in economic history, Kleinhenz said, making it difficult if not impossible to the assess the damage or predict a timetable for recovery.
“Is it possible the worst of the coronavirus pandemic is behind us? Maybe,” he observed. “But we are not out of the woods yet, and uncertainty abounds… Previous downturns offer little guidance on what is likely to unfold over the next six to 12 months. There is no user’s manual in which government, businesses or consumers can find precise solutions for what we are going through.”
To help provide some degree of guidance, the U.S. Census Bureau, which produces a monthly tally of retail sales across multiple distribution channels, has introduced three new weekly research tools: the Household Pulse Survey, the Small Business Pulse Survey and a weekly version of the Business Formation Statistics report. The first two show households have seen reductions in income and most businesses do not expect to resume full operations for six months, although the third found new businesses are still being formed despite the pandemic, with 9,000 applications for companies planning to hire workers filed in a single week in mid-May alone.
Another report leveraged by the NRF comes from the Conference Board and labor market analytics company Burning Glass Technologies. That study found that online help-wanted ads were down 60 percent between February and mid-April, but only declined 40 percent since then — a sign, suggested Kleinhenz, that the downturn may be easing and “seeds for recovery are being planted.”