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The Coronavirus
and the Economy
Charts by Jacob Crouse, David A. Price, Rachel Rodgers, Jessie Romero, and Luna Shen

T

he spread of SARS-CoV-2, the virus behind the illness COVID-19, brought tragedy to households across
the United States in the late winter and spring of 2020. Tens of thousands of people in America have died
and many more have suffered serious illness.
For individuals who were spared these direct effects, the virus led to havoc in daily life and in the economy.
Millions endured job losses. This gallery offers a record of some of the unprecedented economic changes that
Americans experienced.

600

Unemployment Insurance Claims in the Fifth District
Initial claims, in thousands

500
400

400

300

300

Thousands

THOUSANDS

500

200

200

100

100

0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

0

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

NOTE: Not seasonally adjusted. Date range is Jan. 6, 2007, to April 11, 2020.
Source: U.S. Department of Labor via Haver

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E co n F o c u s | f i r st Q u a rt e r | 2 0 2 0

3

Going Away and Going Out
The effect of the crisis on travel and dining was massive

Airline Passengers, 2020 vs. 2019

Restaurant Diners, 2020 vs. 2019

Percent change in seated diners compared to one year previous

20

20

0

0

PERCENT CHANGE

PERCENT CHANGE

Percent change in passengers at TSA airport checkpoints compared with one year previous

-20
-40
-60
-80

-20
-40
-60
-80

-100
3/1

3/8

3/15

3/22

3/29

4/5

-100
2/18

4/12

NOTE: Date range is March 1 to April 15.

2/25

3/3

3/10

3/17

3/24

3/31

4/7

NOTE: Counts include online reservations, phone reservations, and walk-ins at restaurants in the
OpenTable network. Date range is Feb. 18 to April 16.

Source: Transportation Security Administration

Source: OpenTable

Payments
Demand for cash increased while use of credit cards went down modestly

Cash Demand, 2020 vs. 2019

Credit Card and Debit Card Trends

Richmond Fed cash and coin volume

Visa Card Usage in March

3.50
0

2.50

-1

2.00

-2

PERCENT CHANGE

$BILLIONS

3.00

1.50
1.00
0.50
0.00
9

10
Mar. 1-Apr. 12, 2019

11

12
Week Number

13

14

Feb. 28-Apr. 10, 2020

NOTE: Data include cash and coin paid out to depository institutions by the Baltimore, Charlotte,
and Richmond offices of the Richmond Fed. In 2019, weeks nine through 15 are the weeks ending
Mar. 1-April 12. In 2020, weeks nine through 15 are the weeks ending Feb. 28-April 10.
Source: Federal Reserve Bank of Richmond				

4

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4/14

15

U.S. Visa Payments
Volume Total

U.S. Visa Credit Card
Payments Volume

-3
-4
-5
-6
-7
-8

NOTE: Date range is March 1 to March 28.
Source: Visa Inc. Form 8-K, March 30, 2020

U.S. Visa Debit Card
Payments Volume

Confidence in the Economy
The crisis shook measures of business, consumer, and investor sentiment

Household Income and Unemployment Growth
Expectations, One Year Ahead

Consumer Confidence

University of Michigan Index of Consumer Sentiment
60
50

2.5

40

2.0

30

1.5

20

1.0

10

0.5
0.0
Oct

Nov
Household Income

Dec

Jan

0
Mar

Feb

Unemployment

120
100
80
INDEX

3.5
3.0

Probability of Higher Unemployment
(PERCENT)

Household Income Growth
(PERCENT)

New York Fed Survey of Consumer Expectations

60
40
20
0
Oct

Nov

Dec

Jan

Feb

Mar

Apr

Source: University of Michigan Surveys of Consumers

NOTE: Household income predictions are medians; unemployment probabilities are means.
Source: Federal Reserve Bank of New York		

Expectations of Stock Market Volatility

New Orders

CBOE Volatility Index (VIX)

ISM manufacturing and non-manufacturing new orders indexes
70

90
80
70
60
50
40
30
20
10
0
Oct

60

INDEX

50
40
30
20 60
10 50
0 40
Oct
30

Nov
Manufacturing

Dec

Jan

Feb

Mar

Non-Manufacturing

Dec

Jan

Feb

Mar

Apr

NOTE: Date range is Oct. 1, 2019, to April 15, 2020. Missing values represent dates of CBOE holidays.

20

Source: Institute for Supply Management

Source: Chicago Board Options Exchange via FRED

10

Fifth District Managers’ Changing Outlook in March
Nov
Unemployment

Dec

“How has the spread of the coronavirus affected your outlook for the U.S. economy?”
60

Jan

Feb

Mar

50
RESPONSES (PERCENT)

0
Oct

Nov

40
30
20
10
0
Week 1
Improved Slightly

Week 2
Not Changed

Deteriorated Moderately

Week 3

Deteriorated Slightly

Deteriorated Substantially

NOTE: Special question included in March 2020 Regional Surveys of Business Activity. Week 1 is
Feb. 27 to March 4. Week 2 is March 5-11. Week 3 is March 12-18.
Source: Federal Reserve Bank of Richmond		
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How the Fed Responded

Federal Reserve System Assets
In trillions of dollars

77
66

44

$Trillions

$TRILLIONS

55

33

22
11
00
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019 2020
2020
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
NOTE: Total assets (less eliminations from consolidation). Weekly. Date range is Jan. 3, 2007, to April 15, 2020.
Source: Board of Governors of the Federal Reserve System via FRED

Selected Actions of the Fed in Response to the 2020 Coronavirus Crisis
• March 3. Federal Open Market Committee (FOMC) lowers the target range for the federal funds rate by 1/2 percentage point, to
1 percent to 1.25 percent, noting that “the coronavirus poses evolving
risks to economic activity.”
• March 15. FOMC announces it is lowering the target range
for the federal funds rate by 1 percentage point, to 0 percent to
0.25 percent. To encourage borrowing from the discount window, Fed
lowers the primary credit interest rate by 1.5 percentage points, to
0.25 percent.
• March 17. To support the market for commercial paper (short-term
corporate debt) and to support primary dealers that buy and sell
Treasury securities, Fed revives the Commercial Paper Funding Facility
and the Primary Dealer Credit Facility, which were originally created
in 2008 during the financial crisis. These programs are based on the
Fed’s emergency powers under section 13(3) of the Federal Reserve Act.
• March 18. Fed uses its emergency powers to create the Money Market
Mutual Fund Liquidity Facility to support the markets for commercial
paper and other assets that money market funds hold in order to
maintain confidence in money market funds.
• March 19. Fed expands its existing arrangements, known as central bank
swap lines, that provide lending to foreign central banks to assist them in
delivering U.S. dollar funding to financial institutions in their markets. In
addition to the five current participants — the Bank of Canada, the Bank
of England, the Bank of Japan, the European Central Bank, and the Swiss
National Bank — nine more foreign central banks are added.
• March 23. Fed uses its emergency powers to create the Primary Market
Corporate Credit Facility to buy debt securities from corporations and
the Secondary Market Corporate Credit Facility to buy those securities
6

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•

•

•

•

•

•

on the open market. To further support the availability of credit, Fed
also revives the Term Asset-Backed Securities Loan Facility, or TALF, a
broader version of the emergency program originally created during the
2007-2008 financial crisis.
March 31. Fed announces the Foreign and International Monetary
Authorities Repo Facility to enable foreign central banks not participating in the central bank swap lines, as well as international monetary
authorities such as the International Monetary Fund, to borrow dollars
using Treasury securities as collateral.
April 6. Fed announces a new emergency lending facility, the Paycheck
Protection Program Liquidity Facility, to support the Small Business
Administration’s (SBA) Paycheck Protection Program. The SBA program
guarantees loans to small businesses so that those businesses can keep
workers employed.
April 7. Fed and other bank regulatory agencies issue a revised interagency statement encouraging financial institutions to work with borrowers and offer “prudent loan modification programs” to customers
affected by COVID-19.
April 9. Fed uses its emergency powers to create the Main Street Lending
Program for the purchase of up to $600 billion in loans, funded in part
by $75 billion from the Treasury Department, and the Municipal Liquidity
Facility to lend up to $500 billion to states and municipalities.
April 14. Fed and other bank regulatory agencies announce temporary
changes to appraisal requirements for residential and commercial real
estate lending.
April 16. Fed announces that its Paycheck Protection Program Liquidity
Facility is fully operational.
— David A. Price