PITTSBURGH (KDKA) — The chief economist at PNC Financial Services says the impact of the coronavirus on the economy will depend on how long people are laid off.
Gus Faucher believes the key to getting people back to work and reviving the economy rests on just that.
“The key question is, how long are people laid off? Is this the kind of thing where people are out of work for a couple of months, but then businesses restart again and rehire their employees? In which case, the damage will be pretty bad but the stimulus will help make up for that,” Faucher said. “Or will it be the situation where we see a lot of businesses close permanently, those people lose their jobs permanently? That means a longer recession, it means a weaker recovery and it means those job losses become permanent and it means it becomes a much greater impact on those individuals and the economy.”
Faucher says that if the social distancing orders are relaxed, the government stimulus package should help kick-start the economy.
“But the hope is that between the stimulus checks individuals will be getting, the aid to small businesses … by the time things gradually return to normal, people will have enough money to go out and spend and we could see a pretty strong recovery from this, thanks in large part to the stimulus that we will be receiving,” Faucher said.
But Faucher also cautions that if we are still at home three or four months from now, we might not see a recovery until later this year or even into next year.