Could Coronavirus Push the U.S. Economy Into a Recession?
Rachel Uranga is dot.LA's Managing Editor, News. She is a former Mexico-based market correspondent at Reuters and has worked for several Southern California news outlets, including the Los Angeles Business Journal and the Los Angeles Daily News. She has covered everything from IPOs to immigration. Uranga is a graduate of the Columbia School of Journalism and California State University Northridge. A Los Angeles native, she lives with her husband, son and their felines.
The fast-moving coronavirus, which has been roiling markets for more than a week, is pushing the U.S. economy toward a recession, according to Marko Papic, partner and chief strategist at Clocktower Group, who spoke to a conference crowd on Thursday.
"Where I see this heading is in a recession," Papic told a crowd at the Montgomery Summit in Santa Monica. "The U.S. consumer is 15% of global GDP, that's a large chunk."
Just how long and deep it is could largely depend on the virus' trajectory and government response, he said. If the virus behaves in the the U.S. and other countries as it has in China, peaking and then quickly declining, then there will likely be a short-lived recession, Papic said.
He warned that the U.S. government could bring on inflation if responds with too much stimulus.
Papic spoke as part of a panel of health experts brought together at the last-minute by Jamie Montgomery, the founder and managing director of Los Angeles-based March Capital Partners. The idea: To address what was already on top of everyone's mind: Just how serious a threat is this virus?
Asked to rank the scale of the problem the virus poses from one to 10, panelist Christopher Mores, program director for the Global Health Epidemiology and Disease Control program, said "I'm a seven on this thing."
"It's kind of a blend between our outbreak response, and the concerns I have for our policy response," he said, "and damage to other systems in the economy."
On Wednesday — the day the Montgomery Summit was set to start — Los Angeles County officials declared a health emergency, confirming six new cases of coronavirus, and warning that schools and business may need to be closed if COV1D-19 continues to spread.
Montgomery said just days before the summit that he was wrestling with whether to cancel it as Facebook and other tech companies have done with their conferences.
Coronavirus was the talk of the conference, with a family doctor on standby, as folks elbow-bumped and pumped hand sanitizer between talks about raising capital and revenue projections.
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Rachel Uranga is dot.LA's Managing Editor, News. She is a former Mexico-based market correspondent at Reuters and has worked for several Southern California news outlets, including the Los Angeles Business Journal and the Los Angeles Daily News. She has covered everything from IPOs to immigration. Uranga is a graduate of the Columbia School of Journalism and California State University Northridge. A Los Angeles native, she lives with her husband, son and their felines.
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