Coronavirus Recession Looms, Its Course ‘Unrecognizable’

The proposed federal stimulus — which in a Senate Republican version would include checks of up to $1,200 for taxpayers — would be helpful, economists say, but it would probably only blunt the pandemic’s impact, not stave it off.

“A $1,000 check, or even a $2,000 one, won’t pay the rent in New York City, and I suspect it would run out pretty quickly in most parts of the country,” said Beth Ann Bovino, chief U.S. economist at S&P Global. “It’s nice and it’s needed, but it’s just a Band-Aid.”

The credit-rating agency Moody’s found that lodging, restaurants and airlines would be among the most affected industries, with sectors like health care, pharmaceuticals, mining and chemicals taking more modest hits. Telecommunications, software and the steel industry would be among the least affected.

“This will probably be the world’s first recession that starts in the service sector,” said Gabriel Mathy, an assistant professor at American University whose specialty is economic history. “We can see employment falling much faster than G.D.P. The spike in unemployment claims could be eye-popping.”

Historically, recessions began in goods-producing areas of the economy, according to Mr. Mathy. Some manufacturers build up inventories that can be sold when conditions improve. But at restaurants and barbershops, things have ground to a halt without warning, and that business is lost forever.

Even if the pessimists are correct in their estimates so far, the coronavirus recession would not approach the devastation of the Great Depression. From 1929-33, the economy shrank by one-third, unemployment jumped to 25 percent and the stock market fell 80 percent.

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