Consumer spending is our economic engine. The Federal Reserve Bank of St. Louis shows that in the fourth quarter (Q4) of 2019, nearly 70% of U.S. gross domestic product (GDP) came from dollars Americans put toward goods and services.
What will Q1 and Q2 of 2020 look like? The coronavirus outbreak has shattered plans for conferences, graduations, summer vacations and more. But COVID-19 also has a stranglehold on the service economy behind basic consumer spending.
Dine-in meals at restaurants, nonessential purchases at big and small businesses, hotel stays on trips and daily expenses are on hold. Businesses and jobs supporting those transactions are subsequently at risk, and relief can’t come soon enough.
Earlier this month, Moody’s Analytics identified five industries considered most vulnerable to COVID-19: mining/oil and gas, transportation, employment services, travel arrangements, and leisure and hospitality. The Metropolitan Policy Program at the Brookings Institution then mapped where those high-risk jobs are and calculated the share of those positions in almost 400 metro area economies.
Parts of the commonwealth reflected in the Brookings report include: Virginia Beach-Norfolk-Newport News, VA-NC (125,466 jobs, 16.5% share of the metro economy); Harrisonburg (10,043, 15.8%); Kingsport-Bristol-Bristol, TN-VA (17,805, 15.4%); Charlottesville (17,215, 15.1%); Richmond (95,738, 15%); Roanoke (22,543, 14.9%); Blacksburg-Christiansburg-Radford (9,351, 14.5%); Lynchburg (14,228, 14.2%); Staunton-Waynesboro (6,915, 14.2%); Washington-Arlington-Alexandria, DC-VA-MD-WV (420,215, 13.3%); and Winchester, VA-WV (8,116, 13.2%).
“While essentially all of America will likely be affected by COVID-19’s economic effects, those effects will be distinct and varied from place to place,” the Brookings report said. “Given that, we must not only act quickly, but also attend to the unique regional and local impacts within this national crisis.”
We agree. Richmond is one of The New York Times’ “52 Places to Go in 2020” because our area has “morphed into a dynamic cultural center on the cutting edge of the arts, food and recreation,” The Times said. The local economic severity of the coronavirus is its grip on our region’s dynamism.
The U.S. Private Sector Job Quality Index, a tool created by researchers at Cornell Law School, has its own national estimates that hit those arts, food and recreation pillars hard: 37 million jobs at risk, with 9 million in full- and limited-service restaurants, 1.7 million in traveler accommodation and 1.6 million in amusements, gambling and recreation industries.
Gov. Ralph Northam recognized on Monday that restrictions on nonessential businesses “will create hardships on the businesses and employees affected,” and we hope the data reaches a point where business can return to normal. The public health dangers of the coronavirus create moments of powerlessness. But our local, regional and national economy can and will heal, once we’re able to spend.
— Chris Gentilviso