With measures to halt the spread of the novel coronavirus intensifying, the U.S. is embarking on its sharpest downturn since at least the end of World War II, the Wall Street Journal reported. The states where nonessential businesses are shut down, including California, New York and Ohio, account for more than 40 percent of U.S. gross domestic product. Many of those workers and businesses will face severe constraints quickly, surveys suggest. In two weeks time — the period of a typical paycheck — many workers will struggle to make ends meet. After a month, more than half of them could be in trouble. At that point, a fifth of small businesses with lost sales could be on the brink. The stimulus the Federal Reserve announced Monday, including its planned program to support lending to small and midsize businesses, will help. So, too, will the fiscal spending package Congress is hammering out — when it comes. For the economy, the most important questions are how soon help will arrive, how ample it will eventually be and, above all, how long the coronavirus crisis will last. Between the big stimulus likely to come out of Washington, D.C., and plans by lenders to extend loans or offer grace periods on payments, consumers and businesses can manage a shutdown lasting several weeks. Beyond that is uncharted territory, and with the crisis at an intense point right now, few people are thinking that far out. Most economists think the economy will shrink more than 10 percent in the second quarter, at an annual rate, a larger decline than that at the start of the financial crisis and one that would mark the worst contraction since quarterly measurements began shortly after World War II. But most are assuming that by the start of summer, the spread of the virus will have been contained and activity will begin to bounce back. That is no sure thing, with many epidemiological models suggesting containment won’t occur until later.
