Economy suffers amidst coronavirus fears


U.S. Food and Drug Administration

As coronavirus fears spread, the economy is expected to plummet.

As the coronavirus continues to spread around the world, the U.S. economy, like many American citizens, has begun to feel the fear the disease brings. 

Last week, Wall Street experienced its worst economic crash since the recession of 2007. In simple terms, the crash is a reaction to coronavirus fears among investors. Essentially, the coronavirus acts as both a demand and supply to the global economy. Variation in the markets is caused by the sudden need for face masks, sanitary items and other disease related products that have suddenly become valuable products. These sudden changes coupled with fears of the virus among investors caused them to rapidly sell their stocks. 

Currently, there are 802 cases of coronavirus on U.S. soil. There have been 27 reported deaths. There are 100 plus confirmed cases in Washington state, and genetic analysis suggests that the virus is likely to have been spreading in the state for weeks. Washington and California have both declared states of emergency, and 36 states, including Minnesota, have recorded cases of the virus. Despite this, the general risk of infection for the U.S. population remains low. 

Despite the continued spread, the economy has made efforts to recover. The Federal Reserve made the decision to cut interest rates by half a percentage point, a decision that will help currently struggling stocks. However, if the virus fears continue and stocks continue to suffer, profits of large companies are expected to fall by up to 13 percent, signaling an expected shift towards fewer investments and more layoffs. 

Most recently, oil prices crashed, striking yet another coronavirus-related blow to the worldwide economy. The virus has drastically effected the energy market. China, the leading consumer of oil, is now in the midst of a large scale shutdown. Factory production has been halted and thousands of flights have been canceled worldwide. These realities have spurred the first contraction in oil demand since 2009. This shift will likely trigger job losses in oil production states such as Louisiana, Texas, Oklahoma, New Mexico and North Dakota.