Cameron Mitchell Restaurants
The devastating economic costs of the coronavirus pandemic will be clarified in a single issue on Thursday. The Department of Commerce’s GDP report is expected to show the sharpest decline in modern American history in the three months from April to June.
“It will be terrible,” said Nariman Behravesh, chief economist at IHS Markit. “We’ve never seen anything like it.”
The report is expected to show that the economy shrank by about 35% a year during the quarter as shops and factories closed their doors desperately in an effort to slow the spread of the virus. It fell about fourfold during the worst quarter of the Great Recession.
Tens of millions of people lost their jobs this spring before stopping efforts to rebuild the economy. This recovery remains incomplete and may be hampered by a new influx of infections.
“As soon as the virus began to spread again in major states such as Texas, California, Arizona, Florida, it faded very quickly,” Behravesh said.
Restaurant owner Cameron Mitchel considers the pandemic a hurricane. What seemed like an echo of business in June appeared only in the eyes of a storm, and now it is again plagued by winds of wind at the back.
“Our like-minded people are more afraid to work today, and our guests are more afraid to leave, which has led to a drop in sales,” Mitchell said.
Business at his restaurants in Florida in June. It had almost recovered to pandemic levels, but has declined sharply since then.
Other industries have welcomed a more sustained recovery, although few return to where they were in February.
Dental offices are usually one of the more stable parts of the economy, but for most of the spring they were closed to everyone except the emergency services. Dental hygienist Alexis Bailey did not work for 10 weeks until May. He eventually opened his office in Lansing, Michigan.
At first, she did not want to return to work while the virus was still circulating.
Christina Dauka, MSDH
“I was horrified,” Bailey said. “I wasn’t happy to come back. But I have a job I love to do and I want to help people. We’re talking about what we’re essential to, so that’s what we had to do.”
After returning to work within an hour, Bailey says, she began to feel comfortable, especially with the additional protective equipment and other safety measures adopted by her office.
“I keep telling my patients I wouldn’t be here if I didn’t feel safe,” she said.
Dental offices across the country added more than a quarter of a million in May, and another 190,000 in June. And there was no shortage of patients.
She thought no one would want to come. “But we’re reserved,” Bailey said. “People lack tooth brushing. They want to catch up. Every time they come in, they say, ‘It was nice to get out of the house and feel safe and talk to someone.’ “”
Factory production also began to grow, along with construction. But airlines and amusement parks are still struggling.
“Right now, it’s a kind of two-tier economy,” Behravesh said.
April The unemployment rate stood at 15 percent, and in June it was still higher at 11.1 percent. – than during any previous post-war recession. The economic downturn has been somewhat mitigated by an unprecedented level of federal spending.
Salaries in April It fell sharply, but it more than offset the $ 1,200 in benefits the government sent to most adults and the additional $ 600 in unemployment benefits a week.
These government benefits have helped prevent an even sharper decline in consumer spending – the loss of life in the U.S. economy – and have enabled hard-earned families to buy food and pay rent.
Federal Reserve Chairman Jerome Powell said on Wednesday that the money “was well spent. They kept people in their homes. They kept the business going. So, all is well. ”
However, these additional unemployment benefits will expire this week. When coronavirus infections are still a threat to recovery, additional federal support is likely to be needed.
“Until the virus is controlled, we will need more help,” Behravesh said. “In our view, economic activity before the pandemic will not reach for some time in 2022.”
Restaurant owner Mitchell says his business lost $ 700,000 in June alone. He predicts a wave of restaurant bankruptcies if the federal government doesn’t provide more help.
“No one is looking for handouts here,” he said. “We want to survive.”
He keeps a close eye on the news of vaccine trials, hoping that in the long run, dinner participants will feel comfortable eating again in abundance.
“I don’t think it’s going to be in the next couple of weeks,” he said. “But I say to our team, ‘Every day that passes is one day closer to the end of this thing.’ “