3 Months Of Hell: U.S. Economy’s Worst Quarter Ever

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Cameron Mitchell operates more than 50 restaurants in 13 states. He says business was rebounding in June but has dropped again with the surge in new coronavirus infections.

Cameron Mitchell Restaurants

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Cameron Mitchell Restaurants

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«As soon as the virus started to take off again in key states like Texas, California, Arizona, Florida, it’s fading very rapidly,» Behravesh said.

Restaurant owner Cameron Mitchell likens the pandemic to a hurricane. What appeared to be a business rebound in June turned out to be merely the eye of the storm, and he’s now being buffeted by gale-force winds again.

«Our associates are more scared to work today and guests are more afraid to go out, so sales have dropped,» Mitchell said.

Business at his restaurants in Florida had nearly recovered to pre-pandemic levels in June but has since fallen sharply.

Other industries have enjoyed a more durable recovery, though few are back to where they were in February.

Dentists’ offices are ordinarily one of the more stable parts of the economy, but they closed for all but emergency services during much of the spring. Dental hygienist Alexis Bailey was out of work for 10 weeks before her office in Lansing, Mich., reopened at the end of May.

At first, she was reluctant to go back to work while the virus was still circulating.

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Dental hygienist Alexis Bailey was initially nervous about returning to work but says she quickly grew comfortable with the new protective measures, including a face shield (not shown).

Christina Dauka, MSDH

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Christina Dauka, MSDH

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Factory production has also begun to rebound, along with construction. But airlines and amusement parks are still struggling.

«It’s very much a sort of two-tiered economy right now,» Behravesh said.

The unemployment rate approached 15% in April, and in June it was still higher — at 11.1% — than during any previous postwar recession. The economic fallout was cushioned somewhat, however, by an unprecedented level of federal spending.

Wages and salaries fell sharply in April, but that was more than offset by the $1,200 relief payments that the government sent to most adults and by supplemental unemployment benefits of $600 per week.

Those government payments helped prevent an even steeper drop in consumer spending — the lifeblood of the U.S. economy — and allowed struggling families to buy groceries and pay rent.

Federal Reserve Chair Jerome Powell said Wednesday that the money «has been well spent. It has kept people in their homes. It has kept businesses in business. So that’s all a good thing.»

Those extra unemployment benefits are expiring this week, though. With coronavirus infections still threatening the recovery, additional federal support is likely to be necessary.

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«Until we get the virus under control, we’re going to need more help,» Behravesh said. «Our view is that we’re not going to get to the pre-pandemic levels of economic activity until some time in 2022.»

Restaurant owner Mitchell says his business lost $700,000 in June alone. He predicts a wave of restaurant bankruptcies unless the federal government provides more relief.

«No one is looking for a handout here,» he said. «We’re looking to survive.»

He’s watching news of vaccine trials closely in hopes that eventually diners will feel comfortable eating out again in large numbers.

«I don’t think it’s the next couple of weeks,» he said. «But I tell our team, ‘Every day that goes by, it’s one day closer to the end of this thing.’ «

• COVID-19
• coronavirus
• dentists
• restaurants
• GDP