The Recession's Economic Damage is Widespread

Yesterday we covered a series of recent articles saying it will take 2-3 years for the economy to recover to pre-pandemic levels.

One reason for this view is almost all industries are being negatively impacted by the recession.

Illustrating this is the BLS's employment diffusion index.

This index is calculated by adding the percentage of industries with employment increasing plus one-half of the industries with unchanged employment. A score of 0 would mean all industries lost jobs and a score of 100 would mean all gained jobs. 

As the chart below from Marketplace's Here’s one way to tell how widespread April’s job losses were shows, April's diffusion index was a very low 4.8. 

This means almost every industry lost jobs in April.

Early in the pandemic, there was hope that economic damage would be limited to industries with high customer contact such as airlines, restaurants, retail, etc.

But as this index shows, almost all industries are getting hurt.

This means it will likely take at least a few quarters, and probably longer, for the economy to recover fully.

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