Economic Shocks And Coronavirus

TSING YI ISLAND, CONTAINER TERMINAL, HONG KONG, NEW TERRITORIES - 2018/03/30: China Shipping containers seen at the Container terminal in Hong Kong.The Hong Kong Container Terminals is the sixth busiest container port in the world. It handled over 20 million TEUs in 2017. (Photo by Miguel Candela/SOPA Images/LightRocket via Getty Images)
TSING YI ISLAND, CONTAINER TERMINAL, HONG KONG, NEW TERRITORIES - 2018/03/30: China Shipping containers seen at the Container terminal in Hong Kong. The Hong Kong Container Terminals is the sixth busiest container po... TSING YI ISLAND, CONTAINER TERMINAL, HONG KONG, NEW TERRITORIES - 2018/03/30: China Shipping containers seen at the Container terminal in Hong Kong. The Hong Kong Container Terminals is the sixth busiest container port in the world. It handled over 20 million TEUs in 2017. (Photo by Miguel Candela/SOPA Images/LightRocket via Getty Images) MORE LESS
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March 3, 2020 1:22 p.m.
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I’m working on a series of posts tied to various topics surrounding the COVID-19 outbreak. One of the issues is economic impact. We can hope and have some reasons for relative confidence that the US can avoid the worst outcomes from this outbreak. But we can already see lots of reasons to understand that the economic shock will be massive – and a lot of it has already happened. It’s baked in.

Let me point you to just one stunning datapoint.

A few days ago the Port of Los Angeles reported that it expects a 25% drop in container volume traffic just in February. Just in February. The Port’s executive director said he expects of a year over year drop of 15% for the quarter. This is just the tip of the supply chain impact. So even if things started getting back to normal in China faster than people expect a lot of the jolt is still in the future.

It’s important to remember that in general we measure boom times and recessions as fairly small undulations in the total economy, 2 or 3% up or down which means plenty or pain across the economy. International trade is only part of the economy of course. One of the big advantages of the US economy is that a huge amount of it is an internal domestic economy. Still, a sudden 25% drop at a key artery of global trade is just a massive impact.

I don’t have the economic knowledge to predict how that drop figures into a larger calculus of the national economy. But it’s big. There’s no question about that.

Key Coronavirus Crisis Links

Josh Marshall’s Twitter List of Trusted Experts (Epidemiologists, Researchers, Clinicians, Journalists, Government Agencies) providing reliable real-time information on the COVID-19 Crisis.

Johns Hopkins Global COVID-19 Survey (most up to date numbers globally and for countries around the world).

COVID-19 Tracking Project (updated data on testing and infections in the U.S.).

Worldometers.info (extensive source of information and data visualizations on COVID-19 Crisis — discussion of data here).

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