West Virginia Executive Spring/Summer 2020 | Page 24

[ economy ] Economic Outlook Coronavirus in West Virginia Today, we find ourselves in the midst of the most unusual economic situation we have experienced in our lifetimes because of the coronavirus pandemic. Our state and national economies suffered a severe blow over the course of March and April, and the speed at which the economy declined was unprecedented in every way. We have already begun to see signs of economic improvement that provide some optimism, but we continue to face tremendous uncertainty as we look for signs of lasting economic damage. Furthermore, trends in virus caseloads and hospitalizations remain an important factor of the outlook as concerns of a potential second wave of infections later this year linger. The key driver of the uniqueness of this recession is that it did not have an economic cause. Consider our last recession in 2008- 2009. The causes of that recession were rooted in a variety of economic problems that preceded the recession by a decade or more. By contrast, the U.S. economy was in good shape at the beginning of 2020: output growth was strong, unemployment was at historic lows and inflation was 20 18 16 14 12 10 8 6 4 % of Labor Force 1976 1978 Feb-83, 18.8 Mar-92, 11.5 low and steady. This recession was driven by a virus, and our path forward largely depends on public health, making it quite difficult to forecast what the recovery will look like. While all economic data comes with a lag and a complete picture of the pandemic’s damage to the economy cannot be painted at this time, there are several JOHN DESKINS West Virginia’s Measured Unemployment Rate *Unemployment rate data reflect middle of reference month 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 Oct-10, 8.8 Apr-20, 15.9 May-20, 12.9 Feb-20, 4.9 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Source: Bureau of Business & Economic Research key economic indicators that are available to help us understand West Virginia’s coronavirus economy. Overall, West Virginia lost around 94,000 jobs between mid-February and mid-April. This represents around 13 percent of all the jobs in the state. It is unimaginable to think of losing this many jobs over such a short period of time. 22 WEST VIRGINIA EXECUTIVE