The real effects of Covid-19 on our economy started only in March. We are about to receive some trustworthy numbers from the government that will allow us to measure the effects of the pandemic on the economy.
We know that oil usage has dropped dramatically; as automobile driving and jet-fuel travel, as well as ocean-going vessel travel (cruise ships primarily), declined sharply. Per a recent report, worldwide oil consumption in March dropped approximately 14%, and in April, that drop is believed to be closer to 25% (prior to the shutdown, world consumption was 104 million barrels of oil per day). For the US economy, the plummet in oil consumption hits (mostly shale) producers of oil hard. Fossil fuel production represents approximately 10% of the US GDP (prior to Covid-19 pandemic).
We have not yet seen statistics on industries that are vulnerable to social distancing and the current lockdown. Tourism: hotels, transportation, entertainment, restaurants and bars, and retail establishments, represent about 19% of GDP or $4.2 trillion of our $22 trillion dollar GDP. The same group represents 7% of operating earnings of the S&P 500 (based on 2019 earnings) and employs about 20% of payroll (30.8 million jobs).
The Bureau of Labor Statistics listed 157 million Americans as employed by the end of 2019. We know that approximately 30 million Americans are unemployed, 26 million of which are from the past few weeks. What we are seeing is that about 80% of employed people can either work from home or are essential workers.
Per these numbers, the hit to our economy looks significant, but not as terrible as we feared. Now, it is a bit early to draw conclusions as to how quickly we will start to revive the economy.
We hope this information is useful to you.