The coronavirus outbreak has captured the news headlines for now, but what long-term impact will it likely have on the U.S. economy? Brian Beaulieu, CEO, ITR Economics, notes that the country has tread this path before, and history and statistics are on the side of a successful recovery.
“Given the non-plague status of the outbreak, and acknowledging that there is hysteria in many circles, it is probable that U.S. consumers will perform as always: they will consume,” said Beaulieu in a recent blog.
Taking the stock market out of the equation, the smart business owner should use the current pause as a time now to consider how to invest in the future.
“The correction in the stock market was disconcerting, but we think these fluctuations represent buying opportunities,” he advised. “There is time to pause here and make sure the market stabilizes before acting. However, that is the direction we think investors should be leaning. We are also watching commodity prices, like oil, very closely as a “tell.” But our current assessment is that the economy is larger than all of this. The leading indicators in the next several weeks and months will inform considerably. Thankfully, our children seem relatively safe, and life goes on. So, let’s plan for our businesses and maximizing profits with the assumption that rational behavior and economics will rule the day.”
One possible result of the COVID-19 spread is that the U.S. supply chain may head closer to home.
“In the longer run, layered on top of tariffs and politics, expect this black swan event to hasten the shift away from China (and Asia in general) as a supply source and expect to see more nearshoring going forward,” Beaulieu said.
Go to the original ITR Economics blog post:
https://blog.itreconomics.com/blog/covid-19-an-update
Webinar on COVID-19, “Probable Impact of COVID-19 on ITR Economics’ Outlook” with Brian Beaulieu:
https://itrondemand.com/store/product/covid-19-webinar