KNOXVILLE, Tenn. (WATE) — The Great Depression was the last time the U.S. experienced unemployment at levels it is right now. The Coronavirus Pandemic claimed 20 million jobs in April, bringing the unemployment rate to 14.7%.
Bill Fox, Economics Professor and Director of the Boyd Center for Business and Economic Research at the University of Tennessee, said the milestone isn’t surprising. In fact, he said unemployment totals could actually be worse, given those who haven’t looked for employment or are sheltered at home aren’t counted.
Fox is hopeful many, if not all, the more than 30 million lost jobs will be added within a year or so. The timeline, he explained, is not up to how strict or lenient state and local governments are on business, but instead, it will be up to the consumer and their willingness to spend money.
“It really is how will consumers respond and I’ve been out over the last week as restaurants have opened up a little. I haven’t see many people in them yet, even though there are relatively few tables available. What’s that is telling us is people remained concerned,” Fox explained.
Once the public gains confidence, whether that be through a vaccine, a period of time with no resurgence, of effective treatment options, he thinks people will be willing to go out and spend money in socially dense areas.
Next Level Brewing Company opened its doors December 13, 2019. Three months later, like many businesses around the country, they closed. While co-owner Rick Cox said business was strong in their early days, they expected April to be the start of their busiest months.
While it’s been far from what he expected, the next level team has found creative ways to sell their product. Most of their business is generated off-site, by going out to neighborhoods and setting up with local food trucks.
“The community has been fantastic. they’ve definitely supported all local businesses through this,” Cox said.
While their business is not included in phase one of the local reopening plan, Cox isn’t confident business will spike again when they are able to welcome customer inside.
“I think it’s just human nature to be skeptical and worried, and not really know what the future holds…whether this pandemic has actually been stopped or slowed down, or if it will pop back up and be worse than it was to begin with,” he said.
For now, they’re “treading water,” as Cox put it. They look forward to they day they’re able to float, and welcome guests again safely.
Another major factor Fox predicts could impact the timeline, and overall economic growth nationally, is whether companies use this window to “right size” themselves.
“I’m thinking of retailers or restaurant chains,” he said. “If they have particular locations that were not being very successful, they’re going to be much more likely to not reopen those.”
At this point, he anticipates a mild recession to last through most of this calendar year, while things pick up toward the end of the year.
Early 2021, right now, is his estimate for our economy getting out of negative growth. He also expects the overall loss in GDP to range between 7-8% by the end of the year, which would reflect the massive loss in income nationally.