The types of extreme measures that could help contain the coronavirus outbreak in the U.S. — cancelling conferences and festivals, restricting travel, working from home — are also the types of actions that could throw the U.S. economy into a recession. This dilemma is currently plaguing President Trump’s administration, Congress, investors, and Federal Reserve officials as they consider their options.
Italy’s Prime Minister Giuseppe Conte has instituted a quarantine for the entire nation. While that may help contain the coronavirus, such measures would hit the U.S. economy and by extension drag down the global economy.
New research from Deutsche Bank indicates precisely how many Americans are at risk of losing their jobs due to the coronavirus outbreak’s impact on the U.S. economy — 15 million.
“A significant part of the 15 million would be at risk of losing their jobs,” said Deutsche Bank’s chief economist Torsten Slok. “We’ve never seen non-farm payrolls fall by 15 million from one month to another, but this is like a gradual erosion.”
Those 15 million workers consist mostly of independent contractors, on-call workers, and temp help agency workers in industries ranging from health care to law. They represent roughly 10% of the U.S. labor force, says Slok. “Every time you have a slowdown in the economy, temp workers are the first ones to get hit,” he said.
As meetings are cancelled, travel declines and people forgo social activities, like going out to restaurants, movie theaters, gyms, and sporting events, these jobs are vulnerable to a sudden drop in demand.
U.S. may already be in a recession