The differential impacts of the pandemic and its lockdowns are now unmistakable. Originally, the pandemic, lockdowns and recession so closely overlapped that it was possible to mistake cause for effect. Only as they have extended and altered, has the true relationship become distinguishable: The lockdowns’ have had the greater economic effect.
Illusions rest on compelling simplicity. The coronavirus and recession relationship is no exception. Today’s pandemic is the greatest in 100 years, and the unexpected economic collapse is the greatest in over 90. Unquestionably joined, the two had to be cause and effect.
As tempting as this circumstantial evidence is, there is a superficiality to this logic. After all, going to the theater did not kill Abraham Lincoln; being shot did.
The current pandemic’s biggest canard is that coronavirus killed America’s economy. Such shorthand explanation leaves out the lockdowns’ decisive role. With sufficient time having elapsed, and the ebb and flow of pandemic and responses having occurred, it is possible — and important — to establish the real relationship.
On Jan. 21, America documented its first known coronavirus case. Cases then spread, likely to a greater extent than then known; however, lockdowns would not begin until March. During the pandemic’s pre-lockdown phase, the economy continued to function, with employment increasing in both January and February.
Not until March’s lockdowns did the real economic impact occur. According to the Bureau of Labor Statistics, nonfarm payroll shed 1 million jobs (from 151.076 to 150.073 million). So great was the late impact that the gross domestic product (GDP) in the first quarter fell a dramatic five percent. However, this was just a foretaste of lockdowns’ full impact.
As lockdowns extended and tightened, employment plunged unprecedentedly. Employment in April fell almost another 20 million jobs (from 150.0073 to 130.317). This led the way for