(WKBN) – The U.S. economy has entered a recession. Usually, they’re fueled by imbalances in the economy or a downturn in something like the housing market. But this time, it’s different.
“This is totally different,” said Bill Adams, PNC senior economist. “This is a deliberate choice to shut down the economy to try to save lives.”
The streets are emptier than normal. The governors in Ohio and Pennsylvania have told people to stay home unless they work in an essential business. As a result, this downturn is happening much faster.
“Some workers are able to work from home but for those who can’t, that just means that side of the economy output has dramatically plummeted to near zero,” Adams said.
The Federal Reserve has taken multiple emergency steps and Congress has a $2 trillion stimulus package. Those are the tools at their disposal, which can limit this recession and how deep it goes.
“There’s only so much those tools can do, given that we all have to stay home right now if we’re not in essential positions,” Adams said. “That is necessarily going to mean a big drop in economic output.”
But people are struggling to pay rent, businesses are working to pay their bills. That makes the duration of this recession incredibly difficult for economists to call.
“Once the restrictions on activity are lifted, then we could see a relatively quick return to economic growth and a much faster rebound than we saw coming out of the Great Recession,” Adams said.
So how does it end? The first thing is we have to turn a corner in health, then we can look for signs the economy is returning to normal.