On the 21-27 March cover of The Economist is a picture of a globe with the sign ‘CLOSED’ around it. For most people throughout the world it does seem like the world as we knew it has hit the pause button.
Beginning with the first reported pandemic, near modern-day Port Said in north-eastern Egypt in 541, pandemics have been, by their very nature, disruptive, leaving after the crisis recedes, who knows what? COVID-19 is no different in the all-encompassing scope of its disruption.
Pandemics trigger radical change in consumer behaviour. What we observe now is a tightening up of consumer spending, based on fear not just of another outbreak of the virus, but fear of the negative economic impact of the virus in the future.
Goldman Sachs predicts the jobless rate in the United States will hit 15% in the second quarter of this year. Other economists predict a jobless rate closer to 25%. (In 1933, during the Great Depression in the United States, the jobless rate was 24.9%.)