The COVID-19 pandemic has officially pushed our economy into recession. The record-breaking decade-long streak of 113 months of consecutive job growth in the United States came to an abrupt end in March and worsened in April with job losses in excess of 22 million resulting in an unemployment rate of 14.7%, far eclipsing the peak of 10.0% in the Great Recession.
Fiscal stimulus in the form of direct payments and supplemental jobless benefits along with swift and thorough monetary policy enacted by the Federal Reserve have helped millions of American families endure the economic fallout. These aggressive actions bought us time to better understand the underlying health crisis and begin charting a path to recovery.
The Georgia economy began reopening in a phased approach following the expiration of the state-wide stay-at-home order on April 30. Businesses and consumers are understandably eager to return to broader economic activity. Indeed, initial economic indicators show that a nascent recovery is underway – after shedding a total 318.6 thousand jobs in March and April, Atlanta added 35.2 thousand jobs in May. Given the overwhelming concentration of job losses in the service sector, it is encouraging to see data from the restaurant reservation service Open Table show a steady increase in traffic across the country now back up to 57% of demand year-over-year. The next challenge is to ensure the recovery is sustainable. Though there is not a statewide mandate in place, many cities including Atlanta are introducing ordinances requiring face masks to be worn in public to slow the spread of the virus and allow continued economic recovery.
It is also encouraging to see optimistic signals coming from The CFO Survey, a joint collaboration between Duke University’s Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta. Confidence is improving among financial decision makers across firms of all sizes in the second quarter compared to the first with the optimism rating for their own companies rebounding to be in line with the average for the past three years. However, the increased difficulty of gauging demand in the climate of mandated closures and gradual reopening means that firms will be cautious about returning to pre-COVID employment levels quickly.