How Has COVID-19 Affected the US Economy: Statistics & Facts
The COVID-19 pandemic is much more than a public health crisis. As the virus migrated from China and began to spread to every country in the world, it had a far greater impact on the economy than mortality rates.
In the US, the pandemic paved the way for an unprecedented recession that threw tens of millions out of work while eroding incomes, benefits, and corporate profits. The long-term economic consequences of this crisis are yet to be revealed, but it's clear that this is the greatest economic shock since the Great Depression. So how has COVID affected the economy, and what’s on the horizon?
Key Stats for 2024 - Editor’s Choice
- More than 100,000 small businesses shuttered across the US because of COVID.
- More than one in five US households were behind on rent in July 2020.
- In 2020, worldwide retail e-commerce sales amounted to $4.28 trillion.
- Nevada and California had the highest unemployment rates in October 2021.
- The unemployment rate in the US hit 14.8% in April 2020.
- 3.3 million Americans filed for unemployment benefits in March 2020.
U.S. Statistics on How COVID-19 Affected the Economy
In Q2 of 2020, real gross domestic product declined at an annual rate of 32.9%.
(Bureau of Economic Analysis)
The onset of the recession in early 2020 had a devastating effect on the US economy. Data from the Bureau of Economic Analysis shows that the dramatic decline in GDP reflected a drop in everything from personal consumption expenditures and exports to government spending and private investment.
3.3 million Americans filed for unemployment benefits during the week ending March 21, 2020.
(The Washington Post)
The economic damage caused by the COVID-19 pandemic affected millions of Americans almost instantly, with the number of people filing for unemployment insurance soaring in a single week in March 2020. The numbers only kept getting worse, and the following week 6.1 million people filed for the benefits. This was an all-time high in US history. According to the US Department of Labor, the previous record was set on October 2, 1982, when more than 695,000 individuals filed for unemployment benefits.
The US unemployment rate hit 14.8% in April 2020.
(US Bureau of Labor Statistics)
Another grim stat on the economic impact of the coronavirus in the US shows the unemployment rate soaring just a few weeks into the pandemic. Research and data compiled by the US Bureau of Labor Statistics reveal that April 2020 was the worst month on record since the Great Depression. Since then, the unemployment rate has gradually declined to 8.4% in August 2020 and 5.2% one year later.
Nevada and California had the highest unemployment rates in October 2021.
(US Bureau of Labor Statistics)
In October 2021, Nevada and California were the two states with the highest jobless rates in the country. They both had unemployment rates of 7.3%. During the same month, Arizona experienced the highest over-the-month unemployment rate decrease of -0.5 percentage points. Meanwhile, Nebraska and Utah had the lowest unemployment rates - 1.9% and 2.2%, respectively.
Retail sales declined by 8.7% from February to March 2020.
The economic crisis in the US also had an impact on household spending. According to research conducted by the Brookings Institute, retail sales dropped by 8.7% from February to March 2020. As the government imposed lockdowns, many retailers experienced a decrease in demand, including clothing stores, restaurants, and gas stations. On the other hand, pharmacies, grocery stores, and e-commerce retailers experienced spikes in demand during the lockdowns.
Things took a turn for the better in May 2020 when a number of states decided to ease restrictions. This led to a 17.7% increase in retail sales between April and May, marking the most significant monthly jump on record. The growth trend continued, and by August 2020, retail sales surpassed the August 2019 numbers by 2.6%.
More than 100,000 small businesses across the US shut down because of the coronavirus.
(US Chamber of Commerce)
A poll taken in early 2021 revealed that 86% of minority-owned small businesses were concerned about the economic impact of the COVID-19 pandemic and their business’s future. That figure was slightly lower among non-minority-owned small businesses, with 72% saying they were worried about the future.
Although most small business owners (54%) believe that the availability of the coronavirus vaccine will make a difference, 59% don’t expect a return to normalcy any time soon.
56% of small businesses prefer financial aid in the form of direct cash payments.
(US Chamber of Commerce)
Following the start of the pandemic, an exhaustive number of small companies turned to the federal government for financial aid to help them get through the crisis. 56% of those surveyed by the US Chamber of Commerce said they favor direct cash payments, while 30% said they would rather accept financial aid in the form of SBA disaster loans. Meanwhile, 21% of respondents think the temporary cancellation of business payroll taxes is the best option.
In May 2020, 48.7 million people reported they worked from home due to COVID-19.
(National Council on Compensation Insurance)
Prior to the pandemic, only 6% of the US workforce worked from home. The pandemic changed that, and the initial economic impact of COVID-19 pushed that figure to about 35%. That’s 48.7 million people working remotely because of COVID in May 2020. It previously took a decade for this percentage to rise from 4% to 6%.
Based on McKinsey's study from November 2020, 22% of all employees in the US could work from home three to five days a week without any reduction in productivity. In fact, some workers claim to be even more productive when working from home.
The US personal savings rate reached a record high in April 2020.
One of the immediate effects of the pandemic was a huge decline in aggregate spending, which naturally caused a significant increase in savings. Although the negative economic impact of COVID-19 is obvious, the personal savings rate peaked at 34% in April 2020 due to greater federal transfer payments and lower spending.
More than one in five US households were behind on their rent in July 2020.
A Brookings Institute survey on the effect of the coronavirus on the US economy found that many Americans are struggling with rent payments. An increase in federal payments to unemployed workers and households wasn’t enough to cover all their expenses and help them adequately manage their household finances. Based on the survey conducted in late July 2020, more than one in five households in 26 states were late on their rent payments for June. In at least five of those states, one-third of the respondents didn’t pay their June rent.
The fixed rate for 30-year mortgages sank to record lows in December 2020.
The COVID economic impact is also evident when looking at bank lending rates. According to data compiled by Freddie Mac, the fixed rate for 30-year mortgages dropped to 2.68% in December 2020. That’s significantly lower when compared to December 2019 when mortgage rates were 3.72% and December 2018 when the rates were 4.64%.
The 10-year Treasury yield in the US fell below 1% in March 2020.
(US Department of Treasury)
Another clear example of the economic recession is the decline of the 10-year Treasury yield, which stood at 1.59% around mid-February. In the weeks that followed, it began its decline, and for the first time in 150 years, the 10-year Treasury yield dropped below 1% on March 5, 2020.
Global Statistics on How COVID-19 Affected the Economy
In 2020, worldwide retail e-commerce sales amounted to $4.28 trillion.
While some endured devastating losses due to the pandemic, others saw their profits grow to unprecedented levels. For example, the global e-commerce industry generated $4.28 trillion in revenue during 2020. As millions turn to online shopping, these numbers are projected to grow to an astonishing $6.38 trillion in 2024.
China registered real GDP growth of 2.3% during 2020.
(International Monetary Fund)
The geographic and economic effects of COVID-19 were felt by all major global economies. But China recovered faster than others. In 2020, China was the only economic giant that had a real GDP growth of 2.3%. The International Monetary Fund expects that growth to intensify by 8% in 2021. When it comes to the US economy, the IMF expects the growth rate to rise to 6% in 2021.
The economic losses in the global tourism industry could range between $1.7 trillion and $2.4 trillion in 2021 because of the pandemic.
The COVID-19 pandemic is still ravaging the world's major economies and key industries. One of the hardest-hit sectors is tourism. A report from the UNCTAD published in June 2021 shows the number of international tourist arrivals dropping by 84% between March and December 2020, compared to the same time one year earlier. The long-term impact of the coronavirus pandemic in this sector is already clear, and according to the report, the losses could exceed $2 trillion in 2021. Mass vaccinations can help the global tourism industry rebound.
The coronavirus severely affected all aspects of life, and there appears to be no end in sight for the pandemic. Although much of the world experienced the immediate effects of this crisis, the long-term implications are yet to be revealed. Based on recent statistics, the pandemic has killed more than 773,857 people and infected around 48 million in the US since January 2020.
It crashed all major financial markets, causing a global financial crisis. And while some industries saw an increase in earnings, most are still trying to navigate the desperately grim economic situation.
Frequently Asked Questions
What is the US GDP for 2021?
The current-dollar GDP increased by 7.8% at an annual rate. In the second quarter of 2021, it increased by 13.4%, or $702.8 billion. At the same time, current-dollar personal income increased $47.8 billion in the third quarter, which was a significant improvement after its decrease in the second quarter.
Is the U.S. going into recession in 2022?
The whole world has experienced a COVID recession, and the US is no exception. There are different views on whether that trend will continue in 2022. Based on recent stats, there is an 8.46% probability that the US will fall into another recession by September 2022. According to those projections, the chances of a recession starting in August 2022 are even higher (9.46%).
What was the worst economic crisis in US history?
The worst economic fallout in the history of the US was the Great Depression. It started with the stock market crash in October 1929 and lasted until 1939. During that period, millions of investors were wiped out, and by 1933, 15 million people in the US were unemployed. By March 4, 1933, states ordered all remaining banks to close as the US Treasury did not have enough money to pay all the government employees.
What type of economy is the US?
The US economy features elements of both socialism and capitalism. This is a good system as it allows a certain level of economic freedom when it comes to capital use. On the other hand, it allows governments to intervene whenever it’s necessary for the public good.
What is America's current national debt?
This is tied to another fundamental question: how has COVID affected the economy? In short, the impact of the pandemic on the US economy has been extensive. Among the many consequences is a ballooning national debt. In October 2021, the debt was around $28.91 trillion, which is approximately $1.77 trillion more when compared to the same time last year.
I have always thought of myself as a writer, but I began my career as a data operator with a large fintech firm. This position proved invaluable for learning how banks and other financial institutions operate. Daily correspondence with banking experts gave me insight into the systems and policies that power the economy. When I got the chance to translate my experience into words, I gladly joined the smart, enthusiastic Fortunly team.