How Bad Is The Impact To Our Economy?

How Bad is The Impact To Our Economy?

The COVID-19 virus has affected all our lives. “Stay at home” orders were issued to reduce the strain on our medical system. Those orders also placed our economy in a “medically induced coma.” The media focuses their attention on the human impact of the virus. We rarely hear about the economic impact. Today, we offer some insight to the question, “How bad is the impact to our economy?” Thanks to some data from our friends at First Trust Portfolios, we can get a glimpse of the impact to our economy.

Initial jobless claims

This is the only number we see in the news. And we know those numbers have been huge. But let’s put it in context. A year ago (April 3, 2019) weekly jobless claims were 203,000. On April 3, 2020, initial claims were 6.6 million. That’s a 3,154% increase!

How Bad is the impact to our economy - jobless claims

To put this in perspective, here are weekly historical jobless claims in an animated chart.

Box office receipts

After staying home for a few weeks, you might be itching to go to a movie. A year ago, box office receipts were over 184 million dollars. Between March 27 and April 2, box office receipts were $5,508. A near 100% reduction.

How bad is the impact to our economy

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The hotel industry

The economic shutdown has crushed the travel industry. A year ago, hotel occupancy rates were 90%. As of April 4, only 21.6% of rooms were full.

How Bad is the economy hotel occupancy

Another measure of the hotel industry is the revenue per available room. Last year at this time, hotels earned $89.67 per room. Right now, they are earning $16.50 per room. This is a stunning 81% decline.

Impact to our economy How Bad

Airline passengers

The TSA publishes data about the number of passengers they screen each day. A year ago, they were screening about 2.2 million people every day. Now, they are screening 95% fewer travelers, only 94,941 per day.

How bad is the economy - airlines

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Rail traffic

One of the ways you can measure economic activity is by tracking how much freight travels our railways. A year ago, we saw 510,000 cars moving goods and services. Today it has dropped to 429,000 cars–a 19% drop.

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Hard choices and their unintended consequences

Our elected officials made choices they felt were for the greater good for the health of our country. We don’t offer these data points as a criticism of their choices. But these choices affected the American economy. Unfortunately, most of this data gets ignored by the mainstream media. When we look to answer the question, “How bad is the impact to our economy?”, we see it is extreme.

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About the Author

Neal Watson is a Certified Financial Planner™ Professional and a Financial Advisor with Fleming Watson Financial Advisors.  

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