'Will the Coronavirus Cause a Recession? Keep Your Eye on the Barbershops' diff viewer (10/11)

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Will the Coronavirus Cause a Recession? Keep Your Eye on the Barbershops	Will the Coronavirus Cause a Recession? Keep Your Eye on the Barbershops
2020-06-23 06:56:38 UTC	2020-06-23 23:18:13 UTC (about 16 hours later)
Epidemiologists are nervously tracking signs that the coronavirus is spreading widely beyond its origins in China. Economists are watching for much the same thing when it comes to the economic damage.	Epidemiologists are nervously tracking signs that the coronavirus is spreading widely beyond its origins in China. Economists are watching for much the same thing when it comes to the economic damage.
The global outbreak has caused upheaval in stock markets and disrupted supply chains around the world. On Tuesday, the Federal Reserve took aggressive steps to try to contain the damage, announcing that it would slash interest rates by half a percentage point.	The global outbreak has caused upheaval in stock markets and disrupted supply chains around the world. On Tuesday, the Federal Reserve took aggressive steps to try to contain the damage, announcing that it would slash interest rates by half a percentage point.
So far, there have been few signs of widespread economic damage, at least in the United States. Most employers aren’t laying off workers. Consumers are still spending. Shops and restaurants remain open. The Fed’s move is an effort to keep it that way.	So far, there have been few signs of widespread economic damage, at least in the United States. Most employers aren’t laying off workers. Consumers are still spending. Shops and restaurants remain open. The Fed’s move is an effort to keep it that way.
Economists say a pandemic could clearly cause a recession in the United States. But for that to happen, the effects would have to spread beyond manufacturing, travel and other sectors directly affected by the disease. The real sign of trouble, said Tara Sinclair, an economist at George Washington University, will be when companies with no direct connection to the virus start reporting a slump in business.	Economists say a pandemic could clearly cause a recession in the United States. But for that to happen, the effects would have to spread beyond manufacturing, travel and other sectors directly affected by the disease. The real sign of trouble, said Tara Sinclair, an economist at George Washington University, will be when companies with no direct connection to the virus start reporting a slump in business.
“The key is to watch big macro numbers rather than obsessively watching things tied to virus and supply chains,” Ms. Sinclair said. “If people aren’t getting haircuts anymore, that’s a bad sign.”	“The key is to watch big macro numbers rather than obsessively watching things tied to virus and supply chains,” Ms. Sinclair said. “If people aren’t getting haircuts anymore, that’s a bad sign.”
The coronavirus epidemic is evolving rapidly, and no one can predict the economic impact with any confidence. Instead, analysts tend to think in terms of scenarios — what are the different ways the situation could play out? And what are the risks that existed even before the virus struck?	The coronavirus epidemic is evolving rapidly, and no one can predict the economic impact with any confidence. Instead, analysts tend to think in terms of scenarios — what are the different ways the situation could play out? And what are the risks that existed even before the virus struck?
The outbreak has already caused factories to be closed, flights grounded and events canceled. Entire cities in Asia and Europe are nearly shut down. Apple, Mastercard, United Airlines and dozens of other companies have warned that the virus will hurt profits.	The outbreak has already caused factories to be closed, flights grounded and events canceled. Entire cities in Asia and Europe are nearly shut down. Apple, Mastercard, United Airlines and dozens of other companies have warned that the virus will hurt profits.
The Organization for Economic Cooperation and Development said Monday that global growth could be cut in half, to 1.5 percent in 2020, if the virus continues to spread. Laurence Boone, the group’s chief economist, warned that the forecast was “not a worst-case scenario.”	The Organization for Economic Cooperation and Development said Monday that global growth could be cut in half, to 1.5 percent in 2020, if the virus continues to spread. Laurence Boone, the group’s chief economist, warned that the forecast was “not a worst-case scenario.”
The United States will not be immune. Goldman Sachs estimated over the weekend that the outbreak would reduce economic growth by a full percentage point in 2020.	The United States will not be immune. Goldman Sachs estimated over the weekend that the outbreak would reduce economic growth by a full percentage point in 2020.
The economy was growing at an annual rate of only around 2 percent before the virus hit. So if the outbreak worsens, it isn’t hard to imagine that gross domestic product might fall outright.	The economy was growing at an annual rate of only around 2 percent before the virus hit. So if the outbreak worsens, it isn’t hard to imagine that gross domestic product might fall outright.
But a recession is more than just a dip in gross domestic product. As most economists think of it, a recession involves a cycle that feeds on itself: Job cuts lead to less income, which leads to less spending, which leads to more job cuts. (Of course, that doesn’t go on indefinitely, especially if central banks and governments intervene forcefully to kick-start growth.)	But a recession is more than just a dip in gross domestic product. As most economists think of it, a recession involves a cycle that feeds on itself: Job cuts lead to less income, which leads to less spending, which leads to more job cuts. (Of course, that doesn’t go on indefinitely, especially if central banks and governments intervene forcefully to kick-start growth.)
“Consumer spending being 70 percent of the economy, you are going to have to see it on the consumer side for this to take the U.S. economy down,” said Claudia Sahm, a former Fed official who is now director of macroeconomic policy for the Center for Equitable Growth, a progressive think tank. She noted that some researchers had studied how shocks spread through the economy, using methods originally developed to model the spread of disease.	“Consumer spending being 70 percent of the economy, you are going to have to see it on the consumer side for this to take the U.S. economy down,” said Claudia Sahm, a former Fed official who is now director of macroeconomic policy for the Center for Equitable Growth, a progressive think tank. She noted that some researchers had studied how shocks spread through the economy, using methods originally developed to model the spread of disease.
Think about hurricanes or earthquakes. A bad natural disaster can easily cause output to decline in one part of the country, as stores close, shipments are delayed and people stay in their homes or shelters. A really bad one might even cause a dip in G.D.P.	Think about hurricanes or earthquakes. A bad natural disaster can easily cause output to decline in one part of the country, as stores close, shipments are delayed and people stay in their homes or shelters. A really bad one might even cause a dip in G.D.P.
But barring other factors, the economy should snap back once the water recedes or the ground stops shaking. In fact, natural disasters are often followed by a temporary increase in economic activity, as people rebuild. In that way, disasters are different from financial crises, for example, which don’t just reduce spending and investment in the short term but also make people and companies less willing or able to spend for months or years.	But barring other factors, the economy should snap back once the water recedes or the ground stops shaking. In fact, natural disasters are often followed by a temporary increase in economic activity, as people rebuild. In that way, disasters are different from financial crises, for example, which don’t just reduce spending and investment in the short term but also make people and companies less willing or able to spend for months or years.
So far, the coronavirus outbreak looks more like a hurricane than like a financial crisis — but that could change quickly.	So far, the coronavirus outbreak looks more like a hurricane than like a financial crisis — but that could change quickly.
Here’s how a coronavirus could cause a recession: As fear of the virus spreads, Americans stop going to restaurants, concerts and the movies. Airlines cancel domestic flights. Sports leagues scrap games. Hotels, museums and amusement parks close.	Here’s how a coronavirus could cause a recession: As fear of the virus spreads, Americans stop going to restaurants, concerts and the movies. Airlines cancel domestic flights. Sports leagues scrap games. Hotels, museums and amusement parks close.
Then, with less revenue and no certainty on when business will bounce back, companies start laying off employees. Newly unemployed workers pull back spending further, and others, fearful that their jobs could be next, do the same. That hurts demand for an even wider array of products, forcing more layoffs and pushing some companies into bankruptcy.	Then, with less revenue and no certainty on when business will bounce back, companies start laying off employees. Newly unemployed workers pull back spending further, and others, fearful that their jobs could be next, do the same. That hurts demand for an even wider array of products, forcing more layoffs and pushing some companies into bankruptcy.
Or imagine a slight twist: Supply-chain disruptions make it hard for manufacturers to get parts, and for retailers to stock shelves. With nothing to sell, they have to lay off workers, setting off the same cycle of job losses and reduced spending.	Or imagine a slight twist: Supply-chain disruptions make it hard for manufacturers to get parts, and for retailers to stock shelves. With nothing to sell, they have to lay off workers, setting off the same cycle of job losses and reduced spending.
The common element in both cases: Once the direct effects of the coronavirus spread to the job market, the ripples reach much further into the economy. If that happens, the economy might remain sluggish even after the outbreak is controlled.	The common element in both cases: Once the direct effects of the coronavirus spread to the job market, the ripples reach much further into the economy. If that happens, the economy might remain sluggish even after the outbreak is controlled.
“The question is whether it pushes firms so far that they go out of business or start laying employees off,” said Karen Dynan, a Harvard economist and former official in the Treasury Department. “That’s where you can get the bigger impacts on the economy.”	“The question is whether it pushes firms so far that they go out of business or start laying employees off,” said Karen Dynan, a Harvard economist and former official in the Treasury Department. “That’s where you can get the bigger impacts on the economy.”
The impact of the coronavirus won’t show up in economic statistics right away. Hardly any data is available from February, when the virus began to spread widely beyond China, and its effect on jobs and spending might not be clear until the spring or summer.
Updated June 22, 2020	Updated June 22, 2020
A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.	A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.
The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.	The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.
The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.	The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.
So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.	So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.
Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.	Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.
A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.	A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.
The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.	The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.
States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people.	States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people.
Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.	Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.
If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)	If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)
If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.	If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.
If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested.	If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested.
	The impact of the coronavirus won’t show up in economic statistics right away. Hardly any data is available from February, when the virus began to spread widely beyond China, and its effect on jobs and spending might not be clear until the spring or summer.
The few indicators that are available so far paint a mixed picture. In the University of Michigan’s survey of consumer sentiment, 20 percent of respondents interviewed last week cited the coronavirus as a concern, and even they were relatively confident about the economy on average. Recent surveys from the Federal Reserve Bank of Kansas City and the Institute for Supply Management similarly found that companies were nervous about the virus but that business activity was still increasing.	The few indicators that are available so far paint a mixed picture. In the University of Michigan’s survey of consumer sentiment, 20 percent of respondents interviewed last week cited the coronavirus as a concern, and even they were relatively confident about the economy on average. Recent surveys from the Federal Reserve Bank of Kansas City and the Institute for Supply Management similarly found that companies were nervous about the virus but that business activity was still increasing.
Such sentiment indicators could be among the first to detect trouble. Economists will also be watching weekly claims for unemployment insurance to see if layoffs are picking up and monthly retail sales data for signs that consumers are deferring restaurant meals or other spending. Measures of financial conditions, such as an index from the Federal Reserve Bank of Chicago, should signal whether financial institutions become reluctant to lend, another way the outbreak could slow the broader economy.	Such sentiment indicators could be among the first to detect trouble. Economists will also be watching weekly claims for unemployment insurance to see if layoffs are picking up and monthly retail sales data for signs that consumers are deferring restaurant meals or other spending. Measures of financial conditions, such as an index from the Federal Reserve Bank of Chicago, should signal whether financial institutions become reluctant to lend, another way the outbreak could slow the broader economy.
One indicator that economists do not recommend focusing on is the stock market. Yes, stocks just had their worst week since the 2008 financial crisis. And yes, the evaporation (at least on paper) of some $6 trillion in wealth could cause some people to reconsider buying new cars or splurging on vacations, a phenomenon economists call the “wealth effect.”	One indicator that economists do not recommend focusing on is the stock market. Yes, stocks just had their worst week since the 2008 financial crisis. And yes, the evaporation (at least on paper) of some $6 trillion in wealth could cause some people to reconsider buying new cars or splurging on vacations, a phenomenon economists call the “wealth effect.”