Coronavirus economic storylines

The public health story line is, of course, the most crucial of all. But on the economic front, there are a number of important storylines to follow. This thread will be updated regularly.

Last updated: March 18th, 9:20 am.


  1. Stock market. Down 30% so far, wiping $9 trillion off household balance sheets, including $1 trillion from 401ks.
  2. Corporate bond markets broadly down. Freezing of asset markets, especially for corporate debt and commercial paper. Pressure on credit markets.
  3. Oil and gas: oil prices down about 50%. At the pump, price per gallon drops from around $2.50 to around $2.25.
  4. Housing market. Although interest rates have been cut, mortgage rates aren’t declining much at all, due to the fact that mortgage issuers don’t want to hold the mortgages, and nobody is buying MBS. Effect of mortgage rates.


  1. Restaurants are struggling to survive. 5 major cities and several states have shuttered all restaurants. Foot traffic down 50% in many cities. Many restaurants going out of business and laying off workers.
  2. Retail: many stores closed until end of March. As of yet, still paying workers. Most online stores staying open.
  3. Oil and gas firms. Oil prices fell from ~$60 a barrel to ~$30. Many US fracking companies will go bankrupt.
  4. Sports, entertainment, tourism. Sports canceled. Concerts and major events canceled. Worst box office weekend in 20 years. Tourism in free-fall. Hotels laying off workers.
  5. Airlines. Travel from Europe shut down, number of routes flown halved. Talk of a $50 billion bailout.
  6. Manufacturing is doing relatively better than services in the US, but sentiment is dropping, and factories in Europe are shutting down.
  7. Online retail. Amazon to hire 100,000 workers.

Government Response

  1. Monetary policy. Federal reserve cut interest rates to zero (the lower bound?) Quantitative easing is started.
  2. Fiscal policy is still in its early stages. Trump proposes $850 billion stimulus, possibly including direct cash transfers. Small House Coronavirus bill still struggles to be passed.
  3. Support for companies: airlines, hotels, and casinos asking for bailouts, but there is strong pushback.


  1. Overall spending, still little data. In Seattle, consumer spending with credit cards down 10%. Driven by hotels, movie theaters, restaurants. Spending on childcare, health care up big.
  2. Low interest rates leading to increase in applications for mortgage refinancing.
  3. The one high point of consumer spending is the effect from consumers stocking up. Many shelves have been emptied, especially for toilet paper and cleaning supplies.
  4. A second high point of the virus is an increase in online spending. Amazon will try and hire 100,000 workers.


  1. Unemployment numbers trickling in. Large daily jumps in Rhode Island and Ohio. One survey finds 18% of workers have lost hours of jobs.
  2. Risk of being infected on the job. Manufacturers are spacing their workers further apart, hurting productivity.
  3. Productivity while working from home?

China and Italy

  1. China and Italy. China had a large contraction in January and February.

Jacob Robbins

Author: Jacob Robbins

Jacob Robbins is an assistant professor of economics at the University of Illinois at Chicago.

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