National

Record economic plunge, bleak jobs numbers reveal virus toll

WASHINGTON (AP) — The coronavirus pandemic sent the U.S. economy plunging by a record-shattering 32.9% annual rate last quarter and is still inflicting damage across the country, squeezing already struggling businesses and forcing a wave of layoffs that shows no sign of abating.

The economy’s collapse in the April-June quarter, stunning in its speed and depth, came as a resurgence of the viral outbreak has pushed businesses to close for a second time in many areas. The government’s estimate of the second-quarter fall in the gross domestic product has no comparison since records began in 1947. The previous worst quarterly contraction — at 10%, less than a third of what was reported Thursday — occurred in 1958 during the Eisenhower administration.

Soon after the government issued the bleak economic data, President Donald Trump diverted attention by suggesting a “delay” in the Nov. 3 presidential election, based on his unsubstantiated allegations that widespread mail-in voting will result in fraud. The dates of presidential elections are enshrined in federal law and would require an act of Congress to change.

So steep was the economic fall last quarter that most analysts expect a sharp rebound for the current July-September period. But with coronavirus cases rising in the majority of states and the Republican Senate proposing to scale back aid to the unemployed, the pain is likely to continue and potentially worsen in the months ahead.

The plunge in GDP “underscores the unprecedented hit to the economy from the pandemic,” said Andrew Hunter, senior U.S. economist at Capital Economics. “We expect it will take years for that damage to be fully recovered.”

That’s because the virus has taken square aim at the engine of the American economy — consumer spending, which accounts for about 70% of activity. That spending collapsed at a 34.6% annual rate last quarter as people holed up in their homes, travel all but froze, and shutdown orders forced many restaurants, bars, entertainment venues and other retail establishments to close.

Tentative hopes for a swift recovery have been diminished by a resurgence of viral cases in the South and the West that has forced many businesses to close again or reduce occupancy. Between June 21 and July 19, for example, the proportion of Texas bars that were closed shot from 25% to 73%. Likewise, 75% of California beauty shops were shuttered July 19, up from 40% just a week earlier, according to the data firm Womply.

The second surge does appear to be leveling off, but cases are still rising in close to 30 states, with the outbreak’s center of gravity seemingly now shifting toward the Midwest.

Many states have imposed restrictions on visitors from the states that have reported high levels of cases, hurting hotels, airlines and other industries that depend on travel.

That has led to mammoth job losses. In a sign of how weakened the job market remains, more than 1.4 million laid-off Americans applied for unemployment benefits last week. It was the 19th straight week that more than 1 million people have applied for jobless aid. Before the coronavirus erupted in March in the U.S., the number of Americans seeking unemployment checks had never exceeded 700,000 in any one week, even during the Great Recession.

An additional 830,000 people applied for unemployment benefits under a new program that extends eligibility for the first time to self-employed and gig workers. All told, the government says roughly 30 million people are receiving some form of jobless aid, though that figure might be inflated by double-counting by some states.

The pain could soon intensify further: A supplemental $600 in weekly federal unemployment benefits is expiring, and Congress is squabbling about extending the aid, which will probably be done at some reduced level of payment.

“The risk of temporary job losses becoming permanent is high from repeated closures of businesses,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “That could result in an even slower pace of recovery.”

Last quarter’s economic drop followed a 5% fall in the January-March quarter, during which the economy officially entered a recession, ending an 11-year economic expansion, the longest on record in the United States.

The Trump campaign said in a statement that the GDP report reflected a period “when much of the economy was essentially closed down to save millions of American lives.”

The economic harm from the virus is extending well beyond the United States. On Thursday, Germany reported that its GDP tumbled 10.1% last quarter. It was the biggest such drop since records began in 1970. And Mexico’s GDP sank 17.3% last quarter, also a record. Unlike the U.S. figures, those numbers are not annualized rates.

With little hope of a swift recovery in the U.S., the picture looks dim for many of the jobless. Since she was laid off by a tech industry nonprofit in mid-May, Miranda Meyerson has been trying to find another job and to sign up for unemployment benefits.

“It’s just incredibly frustrating and demoralizing,’’ she said. Potential employers seem to be delaying hiring decisions.

“Nobody gets back to you,’’ said Meyerson, 38. “You feel like there’s only so long you can submit (applications) into a void.’’

Meyerson and her partner had moved from New York to Oakland, California, in March. The move complicated her efforts, so far futile, to collect benefits from a swamped California unemployment benefits system.

Many economists note that the economy can’t fully recover until the pandemic is defeated — a point stressed Wednesday at a news conference by Federal Reserve Chair Jerome Powell. He warned that the viral epidemic has been endangering a modest economic recovery and that, as a result, the Fed plans to keep interest rates pinned near zero well into the future.

“A poorly managed health situation and depressed incomes means the economy risks a double-dip recession without urgent fiscal aid,” said Gregory Daco, chief U.S. economist at Oxford Economics.

Daco said the expiration of the $600 in federal unemployment aid means that many households could suffer a loss of income in the range of 50% to 75%. That could further weaken spending, thereby fueling a downward economic spiral.

“The economy,” Daco said, “is going to be running on very little fuel at a point when the recovery has really stalled.”

Coronavirus links

Indiana coronavirus timeline

With updated information from the Indiana Department of Health through Aug. 12, this timeline reflects updated tallies of deaths and positive tests prior to that date.

  • March 6: Indiana State Department of Health (ISDH) confirms the first case in Indiana. Officials say the Marion County resident had recently traveled to Boston to attend a BioGen conference as a contractor.
  • March 8: ISDH confirms a second case. An adult in Hendricks County who had also traveled to the BioGen conference was placed in isolation. Noblesville Schools say a parent and that parent’s children will be self-quarantining after attending an out-of-state event where someone else tested positive.
  • March 9: Avon Community School Corp. says a student on March 8 tested positive.
  • March 10: ISDH launches an online tracker. Ball State University basketball fans learn the Mid-American Conference tourney will have no fans in the stands. Three businesses operating nursing homes in Indiana announce they will no longer allow visitors.
  • March 11: The Indianapolis-based NCAA announces the Final Four basketball tournaments will be conducted with essential staff and limited family attendance. The Big Ten announces all sports events, including the men’s basketball tournament at Bankers Life Fieldhouse, will have no fans starting March 12. Ball State University suspends in-person classes the rest of the spring semester. NBA suspends all games, including the Indiana Pacers, until further notice. Butler University and the University of Indianapolis extend spring break, after which they will have virtual classes.
  • March 12: Gov. Eric Holcomb announces new protections that led to extended public school closings and the cancellation of large events across the state. The NCAA cancels its basketball tournaments. The Big Ten suspends all sporting events through the winter and spring seasons. The league including the Indy Fuel hockey team suspends its season. Indy Eleven says it will reschedule four matches. Indianapolis’ annual St. Patrick’s Day Parade is canceled. 
  • March 13: The Indiana High School Athletic Association postpones the boys basketball tournament. Wayzata Home Products, a Connersville cabinet maker, shuts down and lays off its entire workforce due to market uncertainty. Gov. Holcomb announces actions including the elimination of Medicaid co-pays for COVID-19 testing and the lifting of limits on the number of work hours per day for drivers of commercial vehicles. Franklin College says it will begin online classes March 18 and empty residence halls of students in two days. The Children’s Museum of Indianapolis closes indefinitely. The Indianapolis Public Library joins other libraries across Indiana and closes all facilities indefinitely.
  • March 14: The Indiana Gaming Commission says all licensed gaming and racing operations will close in two days for an indefinite period.
  • March 15: Indiana had its first death. St. Vincent Hospital in Indianapolis announces it will suspend all elective, non-urgent surgeries.
  • March 16: Indiana had its second death. Gov. Holcomb announced the first Hoosier death. He closes bars, restaurants and nightclubs to in-person patrons, but maintains carryout and delivery services.
  • March 17: Indiana had its third and fourth deaths. ISDH announces Indiana’s second death. Indiana’s Catholic bishops cancel masses indefinitely. Gov. Holcomb activates the National Guard. Purdue, Butler and Indiana State universities cancel May commencement ceremonies.
  • March 18: Indiana had its fifth death. Eli Lilly and Co. says it will use its labs to speed up testing in Indiana. The 500 Festival announces suspends all events. Simon Property Group closes all malls and retail properties.
  • March 19: Gov. Holcomb extends Indiana’s state of emergency into May. Holcomb says he’ll close all K-12 public and nonpublic schools. Standardized testing was canceled. The state’s income-tax and corporate-tax payment deadline was extended to July 15. Holcomb says the state will waive job search requirements for people applying for Temporary Assistance to Needy Families. The IHSAA Boys Basketball State Tournament was canceled. The Marion County Emergency Operations Center upgrades to Level 1 status.
  • March 20: Indiana’s death toll rose to 9. ISDH announces Indiana’s third death. Gov. Holcomb moves the state’s primary election to June 2. Indiana University says it is postponing May commencement ceremonies on all campuses.
  • March 21: Indiana’s death toll rises to 14. ISDH announces Indiana’s fourth death. Indiana National Guard says it and the Department of Transportation are distributing medical supplies to hospitals.
  • March 22: Indiana’s death toll rises to 19. ISDH announces seven deaths.
  • March 23: Indiana’s death toll rises to 24. Holcomb orders Hoosiers deemed nonessential to “stay at home” from March 24-April 7. Eli Lilly & Co. begins drive-thru testing for the coronavirus for health care workers with a doctor’s order. Ball State University cancels the May commencement.
  • March 24: Indiana’s death toll rises to 29. Fred Payne of Indiana Workforce Development says any Hoosiers out of work, including temporary layoffs, are eligible to apply for unemployment benefits.
  • March 25: Indiana’s death toll rises to 35. Indianapolis Motor Speedway announces the Indianapolis 500 is moved to Aug. 23. IndyGo suspends fares and changes its ride schedules.
  • March 26: Indiana’s death toll rises to 44.
  • March 27: Indiana’s death toll rises to 47.
  • March 28: Indiana’s death toll rises to 58.
  • March 29: Indiana’s death toll rises to 76. President Donald Trump announces in a press conference that the national social distancing recommendation will be extended by 30 days.
  • March 30: Indiana’s death toll rises to 91. Indiana health commissioner Dr. Kristina Box predicts the arrival of the surge in cases and deaths could come in mid-April to late April, but could be as late as mid-May, “but we don’t know.”
  • March 31: Indiana’s death toll rises above 100, to 113. Gov. Holcomb extends the limits of bars and restaurants to offer only “to go” and “carryout” through April 6. Health commissioner Box, asked about when Indiana will be in a surge of COVID-19 cases, says she thinks the surge is starting.
  • April 1: Officials extend Marion County’s “stay at home” order through May 1. Marion County health officials say they will start COVID-19 testing services for front-line employees.
  • April 2: The state announces K-12 schools will be closed for the rest of the school year. The Indiana High School Athletic Association cancels spring sports seasons.
  • April 3: Gov. Holcomb extends the “stay at home” order through April 20. The state receives a federal Major Disaster Declaration for all 92 counties. The Indiana National Guard says it, the Army Corps of Engineers and state health officials will begin to assess sites for alternate health care facilities.
  • April 4: Indiana’s death toll rises above 200.
  • April 6: The state reports a Madison County nursing home has had 11 deaths. Gov. Holcomb extends the “stay at home” order through April 20. He also limits additional businesses to carry-out only.
  • April 7: Indiana’s death toll rises above 300. Indiana health commissioner Box says four long-term care facilities have 22 deaths that appear to be related to COVID-19.
  • April 10: ISDH said 24 residents of a long-term care facility in Madison County have died from COVID-related illness.
  • April 11: Indiana’s death toll rises above 400.
  • April 14: Indiana’s death toll rises above 500.
  • April 16: Indiana records more than 10,000 positive coronavirus tests. The governor says he expects Indiana to experience a reopening in early May.
  • April 17: Indiana’s death toll rises above 600. The governor says that he will extend the “stay at home” order through May 1.
  • April 20: Indiana’s death toll rises above 700. Gov. Holcomb extends the “stay at home” order to May 1. The governor also says, if the medical supply chain is in good shape, other elective medical procedures can resume April 27.
  • April 22: Indiana’s death toll rises above 800. The Tyson facility in Logansport voluntarily closes so 2,200 employees can be tested for COVID-19.
  • April 24: Indiana’s death toll rises above 900. The Indianapolis City-County Council approves $25 million to help small businesses. Fishers City Council creates a city health department with a plan to test every resident.
  • April 25: ISDH says it will launch an antibody testing study for Hoosiers; thousands of residents were randomly selected to participate in the study.
  • April 27: Indiana’s death toll rises above 1,000.
  • April 28: Indiana officials say they will open COVID-19 testing to more Hoosiers, with expanded criteria and new testing services at 20 sites around the state.
  • April 29: The state says it will spent $43 million on contact tracing.
  • April 30: Indianapolis extends its stay-at-home order through May 15.
  • May 1: Gov. Holcomb announces a phased reopening plan for the state of Indiana. He also extends the stay-at-home order to May 4.
  • May 3: Indiana records more than 20,000 positive coronavirus tests.
  • May 4: Indiana enters Stage 2 of its Back on Track plan, which excludes Cass County until May 18, and Lake and Marion counties until May 11.
  • May 6:The state begins testing for all Hoosiers at 20 sites, with plans to expand the number of sites to 50 in a week. Ivy Tech Community College says it will continue virtual classes when summer courses begin in June. 
  • May 8: Cris Johnston, director of the Office of Budget and Management, says the state missed out on nearly $1 billion in anticipated April revenues; all state agencies will be given budget-cutting goals. Purdue University OKs plans to reopen for the fall semester with social distancing and other safety measures.
  • May 10: Indiana’s death toll rises above 1,500.
  • May 13: Indiana’s death toll rises above 1,600.The first phase of a state-sponsored study of the coronavirus estimated about 186,000 Hoosiers had COVID-19 or the antibodies for the novel virus by May 1. Indianapolis Mayor Joe Hogsett announced plans for limited reopenings of worship services, retail establishments, libraries and restaurants.
  • May 16: Indiana’s death toll rises above 1,700.
  • May 17: Marion County’s death toll rises above 500.
  • May 18: Indiana reports its first case of multisystem inflammatory syndrome in a child. The Farbest Foods turkey-processing plant in Huntingburg is closed for three days; 91 people have tested positive there.
  • May 19: Indiana’s death toll rises above 1,800.
  • May 21: Indiana records more than 30,000 positive coronavirus tests.
  • May 22: Indiana advances to Stage 3 of the Back on Track reopening plan. Indianapolis closes portions of five streets to allow restaurants to reopen with outdoor dining only.
  • May 23: Indiana’s death toll rises above 1,900.
  • May 27: The U.S. death toll rises above 100,000. Indiana University says the fall semester will have in-person and online courses, plus an adjusted calendar through May 2021. Ball State University says the fall semester will be 13 straight weeks of in-person classes with no day off on Labor Day and no fall break.
  • May 28: Indiana’s death toll rises above 2,000.
  • May 29: Places of worship in Marion County can begin holding indoor services at 50% capacity with proper social distancing. Jim Schellinger, Indiana secretary of commerce, said the federal Paycheck Protection Program has made 73,430 loans in Indiana totaling $9,379,164,461, the federal Economic Injury Disaster Loan program has made 5,070 loans in Indiana totaling $445,428,500, and the federal Economic Injury Disaster Loans Advance program has made 38,365 grants in Indiana totaling $136,554,000.
  • June 1: Marion County restaurants begins serving customers indoors and outdoors with 50% capacity. Marion County salons, tattoo parlors reopen by appointment only. Marion County gyms, fitness centers and pools reopen with 50% capacity and no contact sports. However, a Marion County curfew that began the night of May 31 and continued into the morning of June 3 after rioting impacted the reopening of some businesses.
  • June 3: Indiana’s death toll rises above 2,100. Phase 2 of statewide testing of random Hoosiers by the Indiana University Richard M. Fairbanks School of Public Health at IUPUI and the Indiana State Department of Health begins.
  • June 5: Indiana reports May tax revenues were 20% short of projections made before the coronavirus closings started.
  • June 8: Indiana’s death toll rises above 2,200. Indianapolis leaders agree to spend $79 million in coronavirus relief funding on contact tracing, rent relief, personal protective equipment and support for small businesses.
  • June 12: Indiana, excluding Marion County, advances to Stage 4 of reopening plan.
  • June 14: Indiana’s death toll rises above 2,300.
  • June 15: Casinos and parimutuel racing reopen in the state.
  • June 19: Marion County advances to Stage 4 of state’s reopening plan.
  • June 21: Indiana’s death toll rises above 2,400.
  • June 24: The governor says the state’s moratorium on the eviction on renters will be extended through July. Indiana announces it will create a rental assistance program July 13. Indiana Pacers guard Malcolm Brogdon says he has tested positive for COVID-19.
  • June 27: Indiana hospitalizations for COVID-19 begin to increase, with about 33 new patients a day through July 1.
  • July 1: Indiana’s death toll rises above 2,500. The governor pauses Stage 5 final reopening plan, announces Stage 4.5 from July 4-17.
  • July 4: Indiana’s Stage 4.5 reopening plan begins.
  • July 9: Indiana records more than 50,000 positive coronavirus tests. Marion County mandates mask-wearing.
  • July 10: Indianapolis Public Schools announces its reopening plans.
  • July 11: Indy Eleven resumes 2020 season with victory at Lucas Oil Stadium.
  • July 12: Indiana’s death toll rises above 2,600.
  • July 13: Indiana begins rental assistance program for all counties but Marion County. Marion County begins its own rental assistance program.
  • July 15: Indiana announces the Stage 4.5 reopening plan will continue another two weeks. The WNBA season will begin.
  • July 16: Indianapolis suspends applications for its rental assistance program due to overwhelming demand.
  • July 22: Indiana’s death toll rises above 2,700.
  • July 23: Indiana records more than 60,000 positive coronavirus tests. MLB begins delayed season.
  • July 24: Indiana records more than 61,000 positive coronavirus tests. Bars, taverns and nightclubs in Indianapolis are shut down again. City officials also return to other previous restrictions.
  • July 25: Indiana records more than 62,000 positive coronavirus tests. Indiana Fever begins WNBA season after delays.
  • July 27: Indiana records more than 63,000 positive coronavirus tests. Indiana governor’s order to wear face coverings begins. Great Lakes Valley Conference, which including University of Indianapolis, postpones most fall sports, including football, men’s and women’s soccer, and volleyball, until spring.
  • July 30: NBA season resumes.
  • Aug. 3: Indiana’s death toll rises above 2,800.
  • Aug. 4: Indianapolis Motor Speedway announces the Aug. 23 Indianapolis 500 will be run without fans.
  • Aug. 5: With more than 1,000 positive tests reported in a single day, Indiana jumps to a total of 70,998 positive coronavirus tests.
  • Aug. 6: With more than 1,200 positive tests reported in a single day, Indiana jumps to a total of 72,247 positive coronavirus tests.
  • Aug. 7: With more than 1,000 positive tests reported in a single day, Indiana jumps to a total of 73,276 positive coronavirus tests.
  • Aug. 8: With more than 1,000 positive tests reported in a single day, Indiana jumps to a total of 74,309 positive coronavirus tests.
  • Aug. 10: Indiana records more than 75,000 positive coronavirus tests.
  • Aug. 11: Indiana records more than 76,000 positive coronavirus tests. The Big Ten announces it won’t play football this fall.
  • Aug. 12: With more than 1,000 positive tests reported in a single day, Indiana records more than 77,000 positive coronavirus tests. Delta Middle School and Delta High School were closed through Aug. 24 after 228 students went into quarantine; students were moved to e-learning

MORE STORIES

LIKE US ON FACEBOOK