Economy may suffer in short term but fundamentals will be good once virus gone
News about stock market losses due to panic over COVID-19 certainly has been of concern.
But our economy’s engine is not on Wall Street. It is an extraordinarily complex mechanism relying on Americans making or providing, selling and consuming products and services.
COVID-19 has unbalanced the system. Consumption of some products has skyrocketed. Tried to buy toilet tissue recently?
On the other hand, some sectors of the economy are suffering. Gov. Wolf on Thursday issued an order to close non-life-sustaining businesses in an attempt to stop large numbers of people from congregating. That is believed to be a way that the COVID-19 virus spreads. Social distancing is the prescription of the day.
In addition, many people who would not normally take “sick days” from work because of a cough or a runny nose are doing so — with the encouragement of employers — out of concern they have the virus and may spread it to co-workers. That affects both production and, because of lost wages, consumption.
Federal officials, including the White House and Congress, are taking steps to help individual Americans cope with the challenge. Assistance with paying employees who take sick leave — and help for people whose companies have to lay them off because of COVID-19 slowdowns — appear to be on the way.
In addition, some in Washington have pointed out that small businesses are expected to suffer more, proportionately, than large ones. Augmented assistance for them may be on the way, too.
One big step to prime the economic pump has been taken by the Federal Reserve. Fed officials reduced a key borrowing interest rate. That, too, could help.
For a while, our economy will suffer. Things will not be humming along as usual. Many people in our region, along with our state and nation, may suffer severely from the economic slowdown.
Keep this in mind, however: Ours is the strongest economy on the planet, by far. Our workers and managers are among the best, by any measure. And the fundamentals of the economy were good before COVID-19 and will be good once the virus has been whipped.
In other words, we’ll get through this. Keep up the faith. And stay calm.