DUNDEE, Mich. (WTVG) - In small towns across the country, you can already spot signs of economic distress brought on by drastic measures meant to combat the spread of coronavirus COVID-19.
Roughly half of the American labor force, 60 million people, work for small businesses. Forty percent of those are in states like Michigan and Ohio, where they have orders to stay home, according to a Senior Economist with First Trust, Strider Elass.
“If you’re going to shut down the entire economy, you need to have something to help these people out, and so far, it seems like it’s already too late,” Elass told 13abc during a video call from San Diego, California, on Wednesday.
The average small business, Elass said, has enough money saved up to last 27 days. For restaurants, it's more like 12 to 14.
The stimulus package promises fast cash to American families and small businesses, but Elass said it needs to get here fast to effectively fuel a quick rebound from an imminent recession.
“The real issue is, can we get this stimulus passed quick enough and the money into the hands of small business and individuals quick enough that it will have an impact?" Elass said. "The treasury’s optimistic. They think that they can get it there within the next two weeks, but if it really drags on much longer than that, I don’t think it’s going to have as much of an impact as it could.”
“I think the stimulus is enormously helpful, and I think people will be very encouraged,” said Jeremy Cripps, a Professor of Accounting at the University of Findlay who spoke to 13abc during a separate video call.
Cripps said Congress is acting fast enough to get the economy back on track by the third quarter of 2020.
“A lot of this is about not getting getting scared," said Cripps. "I think of it, particularly, of course, if you’re thinking of investment, but a lot of it is don’t get scared. And the chances are, we will return to normal, depending on your statistical measurements and different recessions, within months.”
So, financial experts agree that better days are ahead, and the stimulus can only help. However, how much it will help remains to be seen.
A recession, defined by two down quarters of Gross Domestic Product, or GDP, looms large. However, the stimulus may help bounce the overall numbers back into positive territory, according to the experts.
First Trust predicts GDP for the first quarter of 2020 will finish -1.5%, with the second quarter dropping -20%. However, the company also expects a quick rebound of +3% in the third quarter and +3.5% in the fourth quarter of 2020.
“The future’s bright for the US economy if you can just get through this short term period of angst and panic here," said Elass. "Even if you’re able to put money to work here, buying stocks, we think that’s you’ll be handsomely rewarded.”