ECONOMIC WHIPLASH
All at once, a steady US economy screeches to halt
WASHINGTON » Three weeks ago, Empire CLS was heading toward a second straight year of record business. A car service company in New Jersey, Empire couldn’t even find enough chauffeurs and office workers to meet its needs.
Now? With stunning speed, business in the United States — as well as in Europe and elsewhere — has collapsed in the face of the coronavirus and warnings for everyone to stay home. Suddenly, no one needs a chauffeur.
“We went from full throttle to 90% revenue loss in three weeks,” said CEO David Seelinger. “We’ve been through 9/11. We’ve seen recessions. We’ve never seen anything like this.”
Seelinger spent last Sunday laying off 750 of his 900 employees.
“It was the most difficult day of my career,” he said.
Never before has the U.S. economy screeched to such a sudden, violent stop. Its shutdown has inflicted a case of whiplash on Americans who had enjoyed a decade-plus of gains from the job market, the stock market and a steady economic expansion. The economy is cratering into what looks like a deep recession. Millions will likely lose jobs by summer.
“The economy has never gone from healthy to disaster so quickly,” said Jason Furman, who was President Barack Obama’s top economic adviser and is now a professor at Harvard’s Kennedy School.
“In the financial crisis,” Furman noted, “the housing bubble burst in 2006, the first financial tremors were in 2007 and the major financial events were spread out from February through September of 2008. What would take years in a financial crisis has happened in days in this health crisis.”
Since the Great Recession ended in 2009, the economy has risen for a record 11 years. It hasn’t exactly been a boom. Annual growth has averaged a decent but unspectacular 2.3% since 2010. Yet the expansion has been solid and durable. Employers have added jobs for 113 straight months, the longest such streak on record.