Could Coronavirus Push the U.S. Economy Into a Recession?

Rachel Uranga

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.

Could Coronavirus Push the U.S. Economy Into a Recession?
Photo by Rachel Uranga

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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Office Hours: Apex Founder Ian Cinnamon on Why LA Is the Aerospace Capital of the World

Spencer Rascoff

Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.

​Ian Cinnamon
Ian Cinnamon

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This Week in ‘Raises’: Measurabl Snags $93M, Selva Ventures Grabs $34M

Decerry Donato

Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.

Raises
Image by Joshua Letona

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Decerry Donato

Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.

McKinsey & Company Launches InLA Accelerator To Help Underrepresented Founders Tackle Startup Challenges
InLA

In 2022, female founders saw a 28% decline in overall U.S. funding, while Black-led startups saw a 38% decline in total capital received. In an effort to increase funding for minority-led startups, global venture firm McKinsey & Company is launching InLA, an accelerator program for underrepresented founders.

“This effort is something that the firm has been really excited about for a long time,” Engagement Manager Elkhyn Rivas Rodriguez said. “There's obviously a meaningful and growing startup community out here and just from a diversity standpoint, LA is incredibly diverse and multi-ethnic and multicultural. So we think that there will be a really great pool of potential companies to partner with.”

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