I left my office almost empty-handed on the second Tuesday of March. Like many others, I had no idea that six months later I would still be working at home.
Among the few files I grabbed on the way out was a report on the economic impact of the COVID-19 pandemic on the U.S. produced by the London firm Capital Economics.
“Our current working assumption is still that the number of coronavirus cases in the U.S. is restricted to the low tens of thousands,” the firm wrote in a report dated March 5.
The worst-case scenario, Capital Economics wrote then, would be the economy contracting for a one-year pandemic, cutting gross domestic product by about 3%. The firm’s most likely case was an economic contraction of less than 1% for the year.
The total U.S. confirmed COVID-19 cases last week, though, was approaching 6.5 million, not the tens of thousands, and the firm’s worst-case scenario for the economy didn’t turn out to be pessimistic enough.
The point of bringing this up is not to pick on an excellent firm, but to show that in early March I wasn’t the only person paid to know what’s going on who didn’t grasp the situation.
And six months into the pandemic in the U.S., the picture does not look that much clearer.
It’s still hard to know which of the vaccine candidates will be shown to be safe and effective, or how effective they might be. It’s hard to know how quickly vaccines can be distributed.
As for the economy, a recent survey of 28 economists by the news site FiveThirtyEight and University of Chicago’s business school showed a chasm between the high and low estimates of real GDP growth in the fourth quarter, from double-digit percentage growth to an economic contraction.
The uncertainty hasn’t stopped the public relations industry from pitching experts who seem to know what’s going to be forever changed. Those pitches had started arriving back in March. How could anyone really be that confident?
Admittedly, some innovative ways customers have been served since March are likely to stick around.
Show up in the Target parking lot and have someone wheel out a cart full of stuff to stick in the back of the car? That seems better than in-store shopping.
Grocery delivery doesn’t seem to work as well, with no chance to carefully select meat or produce. However, it’s a substitute that works.
Video chats with a physician seem to work well enough, too.
As for restaurant food, curbside pickup has turned out to be a great service, although it’s still painful to go by popular places and long to pop inside for a relaxed meal with friends.
Small-business revenue in our region at last check was still off 17% from earlier this year, according to a regularly updated dashboard created by economists from Harvard and Brown universities.
A lot of that decline has to be from restaurants and bars.
It’s not easy finding a full-service restaurateur making money since March, with customers largely seated on patios, parking lots and sidewalks.
The New York state restaurant association just released a poll of more than 1,000 members, and more than 6 out of 10 thought they might close for good by the end of the year without additional government aid.
That would mean a generation of financial capital is wiped out. The know-how would still be there when conditions improve — how to run a kitchen, hire and train staff and so on — but their capital to restart would be gone.
So it’s not really not a surprise that in Minnesota, July employment in lodging was off about 40% from last year and full-service restaurant employment was still down more than 30%.
It’s important to remember that job losses are continuing, too, as new unemployment claims in the U.S. last week came out unchanged at 884,000. The highest that number of weekly claims had ever been before the pandemic was less than 700,000.
Some of the assistance for furloughed or laid-off workers was put in place just this year, part of a swift government response that was highlighted in a thoughtful research report last week by the investment strategist Jim Paulsen of Minneapolis-based Leuthold Group.
Maybe, he wrote, the extraordinary reaction to the pandemic could even be seen as an overreaction — a whopping fiscal stimulus by the federal government, plus an extraordinary effort to save money by both consumers and businesses. That response might actually set up the economy for a very strong 2021.
As an investor, that’s the right way to look at the world, deciding on what seems most likely to happen rather than concentrating on what is happening right now.
But without really knowing when a more normal life can resume, friends and neighbors seem to be working much harder on becoming better adapted to a pandemic that just continues. They have bought fire pits and propane heaters to make safely distanced socializing outdoors more comfortable, and bikes and trampolines for the kids.
Those who can work from home have ordered inexpensive desks and chairs.
And while we might have looked odd to the neighbors, last week my book club meeting took up most of a St. Paul front lawn, each of us seated well apart from each other in a big ring of Adirondack and camp chairs.
It was only about 45 degrees out, and darkness came shortly after we sat down.
Yet it was still better than no meeting of old friends.
It’s likely no colder at next month’s meeting. Maybe by then, the whole idea might not seem as odd.