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On March 6 of this year the BLS released the jobs day data for February. It was a good month – strong job growth, decent wage growth, just all-around solid news. And everybody knew it was completely obsolete.1 https://www.epi.org/press/calm-before-the-storm-solid-jobs-report-shows-no-signs-of-the-impending-impact-of-covid-19/
The data were collected in in the days around Feb 12, and only the smallest ripples of the effect of the coronavirus were hitting the US economy then. By March 6 (jobs day), it was obvious that these ripples had already grown to huge waves. 2
Today’s jobs-day data feels the same. Given the utter carnage in the labor market in recent months, gaining 4.8 million jobs and seeing unemployment fall seemed like really good news. But it’s already obsolete. 3 https://twitter.com/hshierholz/status/1278706445089824768
We know the economy will hit a huge fiscal cliff in coming months absent new policy. The incredibly valuable $600 top-up to weekly unemployment benefits will turn off like a spigot. 4 https://www.epi.org/blog/cutting-off-the-600-boost-to-unemployment-benefits-would-be-both-cruel-and-bad-economics-new-personal-income-data-show-just-how-steep-the-coming-fiscal-cliff-will-be/
And state and local governments are going into their budgeting season facing mammoth revenue shortfalls and no sign that the federal government will help them out with these. 5 https://www.epi.org/blog/without-federal-aid-to-state-and-local-governments-5-3-million-workers-will-likely-lose-their-jobs-by-the-end-of-2021-see-estimated-job-losses-by-state/
Worst of all, the pathetically slow progress we’ve made in recent months in containing the virus has decisively reversed, and it’s raging out of control again. This will lead inevitably to an economic contraction in coming months. 6 https://ourworldindata.org/coronavirus-data-explorer?yScale=log&zoomToSelection=true&country=USA~EuropeanUnion&casesMetric=true&dailyFreq=true&aligned=true&smoothing=7&pickerMetric=location&pickerSort=asc
Here’s the latest update to CBO economic and budget outlook, explaining how they model the effect of social distancing on the economy. 7
There’s no real better way to do it given the fundamental uncertainty here, but, the assumption that on the national level there’s a smooth-ish reduction in the economic impact of social distancing seems already clearly violated. 8
And it's already affecting economic activity. For example, here’s the OpenTable bookings data – recovery from April to early June has stalled, and there's the clear start of a reversal as cases spike in recent weeks. 9
Complacency on either the public health or economic front will cost us terribly in coming months. 10
