The pandemic has plunged the Washington region into an economic recession “of unprecedented speed and severity,” according to a new report. But the researchers also say that the economy could soon begin its recovery, assuming Covid-19 continues to ebb in our region.
In their latest monthly economic report, released Wednesday, researchers at the Stephen S. Fuller Institute at George Mason University found that the economic fallout from Covid-19 has been much more painful than prior downturns. “The effect of the first two months of the pandemic on economic conditions,” they wrote in the report, “has been five times larger than the effect of the 1996 federal government shutdown, four times larger than the effect of the 9/11/2001 terrorist attacks, and two times larger than the full effect of the Great Recession.”
The impact has been broad and deep. The number of passengers who took domestic flights through Reagan National or Dulles airports in April fell nearly 96 percent from a year earlier, which is the biggest drop in 42 years. Over this same period, consumer confidence plummeted by nearly 60 percent, according to the report. Meanwhile, the region lost 317,000 jobs in May compared to the same period a year earlier.
Despite the awful conditions, though, employment in the DC area has held up better than other major metropolitan areas, the researchers found. While the region lost 9.5 percent of its jobs in May, the other 14 largest cities in the country saw employment decline by an average of 13 percent.
The researchers also offered some reasons to be optimistic. The region, they believe, could soon begin its recovery. “Initial data suggest that the regional contraction will reach its trough in June or early July,” the researchers wrote. “However, a worsening of the health crisis or a second wave of the virus, a continued weakening of consumer confidence or further disruption to the financial markets would extend and deepen the region’s economic contraction.”
Luke Mullins is a senior writer at Washingtonian magazine focusing on the people and institutions that control the city’s levers of power. He has written about the Koch Brothers’ attempt to take over The Cato Institute, David Gregory’s ouster as moderator of NBC’s Meet the Press, the collapse of Washington’s Metro system, and the conflict that split apart the founders of Politico.
