Whenever the U.S. economy is restarted from the COVID-19 shutdown, it will be a while before it completely recovers, University of North Florida economist Albert Loh said April 13.
“The U.S. economy will probably take another full year after 2020 to get back where it was,” Loh said during a presentation streamed online to the Meninak Club of Jacksonville.
The impact of the pandemic on the economy “is going to be coming in several phases and right now we are probably in the first phase,” he said.
Workers who have lost their jobs, either temporarily or permanently, will have much less money available to spend when businesses like restaurants do reopen.
“They are not able to maintain the same consumption levels as before,” Loh said.
The latest data from the U.S. Labor Department showed food and drink establishments were the hardest hit industry in March, losing 417,000 jobs nationally in the month, Loh said.
Health care also was hard hit with 43,000 jobs lost.
While hospitals have been overwhelmed with COVID-19 cases in some cities, physicians and dentists have had to put off elective procedures, forcing them to shut down.
That could help the health care industry when the country reopens as patients seek treatments they have put off, Loh said.
“There is going to be a pent-up demand,” he said.
Education may see a significant shift in business after the pandemic forced schools to offer their classes online.
Loh said UNF was prepared in advance because it already was offering distance learning classes before the pandemic.
“The university has a good process to train faculty members to teach their classes online,” he said.
“It still caught a lot of faculty off guard, but we are adjusting pretty well.”
Loh said UNF was already considering the shift in education to more distance learning options.
“This is a question we have been asking even before COVID-19,” he said.
“Maybe some students will change their taste” after being forced to take only online cases as the UNF campus shut down during the pandemic, Loh said.
“We also believe there are a lot of students who value the opportunity to interact with faculty members in a face-to-face setting,” he said.
Heading into the COVID-19 shutdown, the Jacksonville economy was strong with Northeast Florida’s unemployment rate near 3%.
“Just a month ago we were at full employment,” Loh said.
The Florida Department of Economic Opportunity is scheduled to release data April 17 on the state of the Jacksonville labor market in March, offering a look at how the pandemic affected the economy in its early stages.
“I'm just a little bit scared to look at the numbers this Friday,” Loh said.
The national unemployment rate jumped from 3.5% in February to 4.4% in March. Loh said Jacksonville tends to have a lower unemployment rate in “boom times” than the rest of the country.
However, Jacksonville's “disproportionally large percentage of small businesses” could send the jobless rate higher in the recession, because small businesses will have a tougher time surviving the current downturn, he said.
“This is generally a good place to start a small business,” Loh said. “But because of that, we are (more) vulnerable to a recession.”