Latest Analysis: Unemployment Claims Across Houston Jump to 180,000; Global GDP Expected to Decline Up to 30%

Published Apr 14, 2020 by A.J. Mistretta

New data is beginning to show the dramatic impact the coronavirus is having on Houston’s economy. Partnership Senior Vice President of Research Patrick Jankowski used the latest reports to provide a status update on the region’s economic landscape on April 14.

Watch Jankowski’s presentation via the link to the right. Here are a few highlights:

There are now nearly 600,000 confirmed cases of COVID-19 in the U.S. and more than 21,000 deaths. Here in Houston there are now roughly 6,000 confirmed cases across the region. In just two weeks, the number of cases in the Houston area has quadrupled.
It’s important to understand the global impact of the virus on a globally connected city like Houston. The latest forecast issued by the International Monetary Fund (its first since the pandemic began) shows global GDP shrinking 3%, which would dwarf the 0.9% decline experienced during the Great Recession of 2009.
IMF has also mapped where they believe the worst of the economic fallout will happen, with Italy and the Baltic States showing the largest contraction.
With roughly 450,000 jobs and 30% of GDP in the region tied to global trade, any drop on that front will have a significant impact on Houston. The World Trade Organization estimates global trade will fall between 10-30%.
According to a survey from McKinsey & Co., 52% of respondents say they are cutting back on their spending. That will have a significant chilling effect on U.S. growth and the overall economy. Over 50% of respondents also believe it will take more than 4 months before we are able to return to normal behavior.
A Wall Street Journal survey of economists shows that on average respondents believe the economy will shrink by about 25% in the second quarter.
Initial claims for unemployment insurance now total 180,000 over the last three weeks, that’s compared to about 10,000 claims on average for a three-week period. Jankowski said he wouldn’t be surprised if jobless claims climb to 250,000 or more in total for March and April.
On the aviation front, the Transportation Safety Administration might handle 2.5 million passengers during a normal day, but that has fallen to about 100,000 per day in recent weeks.
Jankowski also provided an overview of a recent Partnership survey of small business members. See those results.

Visit the Partnership's COVID-19 Resource page for updates, guidance for employers and more information. And sign up for daily email alerts from the Partnership as the situation develops.