Economic life in the U.S. this fall will be far from normal
By Justin Lahart
Preparing for fall, school districts across the country are looking to balance the need for in-person instruction with the importance of keeping students and staff safe.
Photo: Ross D. Franklin/Associated Press .
It is hard to know what the U.S. will look like in the fall, but it won’t look anything close to normal.
That much has become more clear over the past week, as new Covid-19 cases surged in several states that had been among the earliest to begin reopening their economies. The possibility that the novel coronavirus will be well enough contained by the end of the summer that there can be a general return to business-as-usual is looking slim.
Investors need to recalibrate their expectations of what the economy will look like through the end of the year. This goes beyond debating whether the recovery will be a V, a W or a U, and considering instead the details of what everyday life could look like. Consider what might happen across three dimensions: Work, school and social gatherings.
It is difficult for people in many jobs to work together safely, and that will still be true in the fall. Sitting cheek-to-jowl in an office, for example, is too risky now, and will likely be viewed as such by many employers and employees, possibly until there is a vaccine.
So desks will be reconfigured, partitions will go up, and many business places won’t be able to accommodate as many workers as before, leading to staggered shifts and work-from-home arrangements where people will only come in a few times a week.
Companies that are able to will allow employees to work entirely from home through at least the end of the year, as Facebookand Alphabet’s Google have already said they plan to do.
As a result, businesses with sales that depend on commuting workers will continue to struggle. The downtown coffee shop, the fast casual restaurant across from the office park and the business-district gym could be in for a difficult autumn that leaves them employing far fewer workers.
What the fall will look like for schools is up in the air, as districts across the country balance the need for in-person instruction with the importance of keeping students and staff safe. Many are considering hybrid models, where students come in a couple of days of week and learn remotely on other days.
For parents who don’t have the luxury of working remotely as well, and who are unable to secure child care, this amounts to a crisis. Many will opt not to work, resulting in lost income and spending power.
Then there is the matter of what sort of social activities state and local officials will allow. New Jersey on Monday indefinitely postponed plans to allow indoor dining, and New York City on Wednesday postponed its plan to open up indoor dining as well. In parts of the country, dining in at a restaurant may be a no-go into the fall—to say nothing of going to nightclubs, movie theaters and sports stadiums.
People’s perceptions of the risk could matter more than what the rules say. Harvard University economist Raj Chetty has pointed out that while Minnesota relaxed restrictions earlier than Wisconsin, spending in both states have moved along the same trajectory. So official announcements that it is safe to resume some activities will need to be credible.
None of this seems very promising for the economy’s near-term prospects. A fall where the coronavirus pandemic continues to put constraints on people’s ability to work, where parents are forced to balance their need for income with their children’s need for an education and where millions of people in service-industry jobs such as restaurants remain out of work isn’t what anybody wanted. The case for another round of fiscal stimulus is growing.
The hope is that this time around the whole country will take the necessary steps to contain the pandemic, and come up with ways to get back to business without imperiling people’s health. Then the economy can find more solid ground while we await a vaccine.
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