If you’re getting nervous about the economy based on the coronavirus’ effect on the stock market and on global oil prices, your worries might be premature.
“I don’t really foresee this being a panic time,” says Dr. Lou Pantuosco, a professor of economics Winthrop University. “I think most people are looking at this as a good opportunity to buy. At least the people I’ve talked to.”
Pantuosco is also a financial planner, who says his customers are seeing the chance to get stock in companies that even just two weeks ago were trading much higher. He says they’ve been eager to buy, not to sell, as the market stays its rollercoaster course.
Moreover, Pantuosco says market panic and economic reality are not the same thing.
“The stock market is reactive,” he says. In contrast, “the economy moves slow.”
It’s also moving along rather well. Or, at least, the latest job growth numbers, looking back over the past few months, look that way. The latest jobs report by the U.S. Bureau of Labor Statistics showed a job growth of 243,000 over three months. But those were three months before “coronavirus” became such a common word. Daniel Zhou, a senior economist at Glassdoor, recently told NBC News that the rosy job market numbers are “a look in the rearview mirror.”
Whether South Carolina’s economy will suffer the ill effects of Covid-19 are yet to be seen. Pantuosco says the biggest sign of trouble will be when – or, rather, if – consumers stop spending on the things that drive so much of the state’s economy – entertainment, dining, shopping, and recreation.
Worldwide, the travel and leisure industry is taking a big hit. On Monday, Barron’s reported that stocks in cruise ship companies are down as much as 20 percent. Meanwhile hotels everywhere are losing business because of canceled conferences and events.
Still, Pantuosco says that the volatility in the market is likely to be transitory and that global markets will bounce back once coronavirus is more under control, or runs its course.
“Are we still going out to eat? Are we still going out to games?” Pantuosco asks. “When people stop spending money on those services, then that could be a problem.”
But that, he says, is still a little ways off.