The financial effects of COVID-19

Brett Stroup, Flashlight Contributor

The new coronavirus, labeled COVID-19, could have serious disruptive effects on the economy.

The global supply of goods has been affected, making it difficult for the United States to fill orders for people. Non-essential businesses have furloughed workers in many areas, reducing labor supply and slowing demand for United States products and services. The spread of the global virus remains uncertain, increasing the volatility of financial markets. The uncertainty may result in further economic turmoil.

The epidemiological profile and the way that consumers and businesses respond may provide possible outcomes for the virus. There are already impacts to supply chains, demand, financial markets, and international trade. Global growth is decreasing, and the markets have low-interest rates. This means that banks in almost every major country have little ammunition to fight against economic fallout.

Echoes of the 2008 financial housing crisis are ringing in the ears of investors. In the U.S., an economic meltdown is occurring when looking at Wall St. The stock market has been fluctuating rapidly, losing over 1000 points during several trading sessions. There is a possibility that the country could fall into another recession like or worse than 2008.

The spread of the virus is having significant impacts on small and large business owners around the globe. As businesses continue to shut down, the consumer stays home, and the businesses suffer. At the local level, rural places like Mansfield have been affected by the growing concerns as local shops close, restaurants limit their services, and toilet paper is hoarded.

It is too early to determine the long-term fallout on supply chains, manufacturing, and the United States economy. Financial experts suggest it may depend on the confidence of the U.S. public. If the virus slows or a cure is created, countries could reopen borders and businesses. However, there is no denying that short term impact will be great, and many people are temporarily losing their jobs.

In times of crisis, everyone should remain calm and not panic. This is a scary situation and it should be taken seriously. However, if expert advice is followed, people take precautions, and the government does their best to ensure some recovery, life will go on.

Photo courtesy of BBC News