States that reopened their economies early from coronavirus pandemic shutdowns saw no economic gain over those that had longer closed periods, according to a recent study from the Center for American Progress. In states with shorter shutdown periods, troubles with paying a mortgage, rent, and loss of earnings increased for residents, the study found. In states with longer shutdowns, the same metrics were either stable or decreased slightly. "Georgia, Texas, Florida, and others by aggressively reopening didn't just create a problem for themselves," Christian Weller, a senior fellow at CAP and author of the study, told Business Insider. "Now they have to reverse, and that reversal that slowed down their own economies is also still informing other parts of the country where things have gotten under control." Visit Business Insider's homepage for more stories.
The states that reopened their economies earliest from the sweeping shutdowns to contain the coronavirus pandemic saw no economic gain, according to a recent study from the Center for American Progress, a nonpartisan policy institute. To gauge the economic implications of shorter versus longer shutdowns, CAP measured four concurrent indicators and three future ones around the time states ended stay-at-home orders, using the median lockdown length of 53 days. "States that were were more aggressive in their opening —never shut down, or slowed down just a little — ultimately didn't see any bump in their economic performance," Christian Weller, a senior fellow at CAP and author of the study, told Business Insider. "In some cases, [those states] actually saw a worsening economic performance relatively quickly," he added. In addition, some of the states with early reopenings are now seeing surges in new COVID-19 cases, escalating the health crisis they have to deal with. Read more: Bernstein says buy these 13 dividend-rich stocks built to capitalize on a trend not seen in 65 years
The study comes as the US grapples with how to best proceed with the coronavirus pandemic, balancing the economic recovery with managing the spread of disease. Recent spikes in new COVID-19 cases in states with the earliest reopenings such as Florida, Texas, and Arizona have now forced some to pause or roll back those plans, putting further pressure on the economic recovery. "Georgia, Texas, Florida, and others by aggressively reopening didn't just create a problem for themselves," said Weller. "Now they have to reverse, and that reversal that slowed down their own economies is also still informing other parts of the country where things have gotten under control." This is because of the interdependent nature of states across the US and the lack of a federal plan to effectively address the pandemic, according to Weller. It's near impossible for the rest of the country to be completely isolated from the reopening plans of other states, so a coordinated response is necessary. "We're all in this together," said Weller. Read more: Jefferies is making 2 major shifts to its stock-investing strategy as the US lags a broader economic recovery. Here's how the firm says the new trades will help investors crush the market. There are other signs that the economic recovery from the pandemic recession, which initially showed a promising rebound, is losing steam as cases spike. Initial jobless claims increased this week for the first time since March, and a key gauge of consumer sentiment erased gains in July. There are also further risks to the economy lurking ahead. On Saturday, the extra $600 weekly unemployment benefit will expire without an extension, as Republicans pushed the rollout of their initial coronavirus relief bill to next week. There are other policy cliffs that the US is facing. On Friday, the federal eviction moratorium is ending, putting renters who have not been making payments amid the pandemic at risk. And, in August, applications for the Small Business Association's Payroll Protection Program will close, ending relief that's saved millions of jobs. "Instead of the whack-a-mole approach to which the United States is currently adhering, the Trump administration should set out strong federal safety guidelines; implement a testing and tracing program; continue to support workers; provide much-needed aid to state and local governments; and inject more financial stimulus to consumers," wrote Weller. Read more: Leka Devatha quit a cushy corporate career to start flipping houses. She breaks down how she made $1 million on a single deal by supercharging a simple strategy.Join the conversation about this story » NOW WATCH: Why electric planes haven't taken off yet
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