The economic door, haltingly, is creaking open
According to a review of state plans by CNBC, 13 states have already partially reopened and another 7 have announced a date to do so in the next week or so. In all, CNBC’s analysis finds 118,000 million Americans, or slightly more than a third of the population, are living in states that have partially reopened or will be soon.
While the reopening plans have sparked concern that they are too soon and carry risk of a potential new round of contagion, they also offer the possibility, if successful, of a faster economic rebound than forecast.
Georgia with its 10.6 million people is the largest state to partially reopen followed by Tennessee and Indiana. In all, 58 million Americans, or about 18% of the population, live in states that have already partially reopened. Gov. Brian Kemp was hit with criticism for giving permission to gyms, tattoo parlors and restaurants to open this week, though they must still adhere to social-distancing rules.
Among those states set to reopen soon, Texas will be the largest with its 28 million residents. Governor Greg Abbot on Monday set May 1 for a partial reopening. His plan allows all retail stores, restaurants, movie theaters, and malls to reopen at 25% of capacity. Business in counties with few coronavirus cases can open to 50% of capacity.
Ohio is another huge state set to partially reopen on May 1. In all, an additional 18% of the population will be in states partially reopened by around the end of the first week of May.
Even after those states reopening, 210 million Americans, or 64% of the population will be living in states with no announced date for a reopening. Governors in many of those states have announced plans to partially reopen, but they have not yet set dates.
Medical professionals, politicians, business owners, and investors will be watching results of these partial reopening’s carefully. The first concern is whether it leads to additional contagion. If it does, it could mean a quick reversal of policies and a setback to reopening plans in many large states. The second concern is whether business owners themselves feel comfortable enough to call their employees back to work and serve customers. And third is the all-important question of whether consumers themselves feel safe enough to venture into the stores.
The reopening’s will play a critical role in determining how much the economy will decline in the second quarter. Economists on average project a 35% decline following the government’s announcement Wednesday that growth plunged 4.8% in the first quarter.
It’s unclear the extent to which economists have built into their forecasts the economic activity from partial state reopening. Successful reopening efforts could mean the second quarter decline is somewhat less catastrophic than originally forecast and that the economic rebound somewhat faster.