UNITED STATES
Global Context of the USA during the COVID Rescission.
Causes of the COVID Recession
Supply Chain Disruptions: The pandemic created disruptions in global supply chains which affected the availability of materials needed.
Consumer Spending Decline: There was a decrease in demand as people started to save their money since unemployment and fear increased. Overall, fear of the virus as well as government restrictions led to a less stimulated economy since less consumers were consuming.
Effects of the COVID Recession
Unemployment Rate: The unemployment rate in February of 2020 was 3.5% and in April 2020 (2 months later) it was up to 14.7%.
Business Closures: In April 2020, approximately 43% of small businesses temporarily closed.
Overview of Economic State of the US:
Unemployed Surge: Unemployment rates increased heavily when businesses closed/scaled back operations, reaching levels from the Great Depression. The graph to the right shows the dramatic change once the virus took hold of the country.
Business Closures: Many businesses, especially small ones, were forced to shut down permanently due to lock down measures and decreased consumer spending.
Stock Market Volatility: The market experienced extreme volatility, initially plummeting but then recovering somewhat due to government intervention and investor optimism.
Supply Chain Disruptions: The lack of access to other countries created a shortage of certain goods and delays in the production and distribution.
Government Stimulus: Governments implemented stimulus checks to increase consumer spending, hence stimulating the economy.
Remote Work and Digital: Started trends that led to digitization of a lot of work which changed consumer behavior and everyday life for many.