In an interview with CNBC, Mark Zandi said if businesses open too soon and the infection rate rises, it will cause more business disruptions, people will be scared, and the nation will face a second Great Depression.
“If we get through this period without a second wave, then this will end up being a really bad recession,” he told the network. “But if we get a second wave, it will be a depression.”
Zandi’s comments came Friday (May 8) following the worst jobless report in the nation’s history. The monthly survey showcased the devastation caused by COVID-19, as nonfarm jobs fell by 20.5 million in April, and the unemployment rate rose to 14.7 percent from a half-century low of 3.5 percent in February.
“The report was pretty ugly,” Zandi told the network. “The thing that struck me the most, just looking at the industries, there were only a few that didn't have layoffs: couriers, computer equipment manufacturers and post office workers. Other than that, the losses were across the board. There’s lots of financial pain and suffering out there.”
When questioned about how important a vaccine is to getting jobs to rebound, Zandi said it’s critical.
“It’s a necessary condition for the economy to fully recover,” he said. “We’ll get a bounce because businesses are starting to reopen and that will support job growth.”
While optimistic for more jobs to come through the fall, Zandi said without a vaccine there’s trouble ahead.
“We will be in quicksand until we get a vaccine because the uncertainty around the virus and the impact that will have on consumers and businesses will be pretty tough to overcome,” he said. “I don't see the economy really kicking into any kind of sustained growth until we get a vaccine.”
On the dramatic impact of the job losses on minorities, Zandi said the hardest hit industries, including leisure, hospitality and retail, are predominantly staffed by minorities.
“Those are the groups that work in those industries, and so they are suffering the most,” he said.
Zandi is not the only person concerned about the second wave of infection.
The New York Times reported many scientists say whether the nation can avoid a reprise of COVID-19 will depend on using masks in public which have proven even more effective at stopping the virus than was previously realized.
A PYMNTS report found any decision to reopen, even in a limited way that some governors have introduced or are planning, must weigh the economic impact of keeping the economy locked down against the availability of treatments that will mitigate or eliminate the risk of another serious outbreak.