COVID-19 and the Global Economic Outlook

The implications of COVID-19 have sown uncertainty into the economy both domestically and internationally. Favorable investment returns are key to providing stability in retirement and health benefit funds. An April 8 International Foundation webcast led by Ian Toner, CFA, Chief Investment Officer at Verus Investments, investigated current economic conditions, the strain that COVID-19 is putting on the U.S. health care system, the impact of social distancing, the U.S. fiscal response and a roadmap for the eventual reopening of the economy.

See the key findings from the “Global Economic Outlook” webcast below and tune in to hear the full presentation on-demand.

COVID-19 and the Global Economic Outlook

Economic Conditions

Investment Performance

  • Recent investment losses have been historic. The S&P 500 fell 12.4% in March 2020 alone.
  • Specific asset classes were examined from the period of February 19-April 3. Over that period, oil industry stock prices fell by 47%. Conversely, several fixed income products experienced modest gains. For instance, U.S. treasuries grew by 6%.
  • This analysis shows the importance of having a diversified investment portfolio, particularly the importance of fixed income instruments like bonds and money market instruments. Portfolios without these products would have faced even more significant losses.  


  • Initial jobless claims soared above previous all-time high levels in the last two weeks of March and are expected to stay at these elevated levels for the next few weeks.
  • As expected, the leisure and hospitality sectors have been the hardest hit, followed by education and health services, professional and business services, retail trade and construction. These losses are expected to have long-term implications.
  • In March, nonfarm payrolls contracted for the first time in the past 114 months.
  • About 10 million Americans filed for unemployment in the last two weeks of March, roughly 6.3% of the labor force.
  • Adding this rate to the 3.5% rate of February brings the likely rate at the beginning of April to just below 10%.

[Upcoming Webcast: Newfound Angst: Combating COVID-19 Stress and Anxiety | April 16, 2020 ]


U.S. Hospital Resource Use Due to COVID-19

  • Nationwide hospital admissions are projected to peak on April 11 and fall to zero by June 19.
  • The number of beds needed per day for COVID-19 patients is projected to peak on April 15 and fall to zero by July 3.
  • Daily nationwide new ICU admissions are projected to peak on April 13 and fall to zero by June 29.
  • Nationwide need for invasive ventilation is expected to peak on April 16 and fall to zero by June 29.

Projected U.S. Deaths Due to COVID-19

  • The daily death toll in the U.S. is expected to peak at 3,130 on April 16 and fall to zero by July 1.
  • The total number of deaths in the U.S. relating to COVID-19 complications is expected to plateau at around 82,000 in early June, with upper and lower bounds near 136,000 and 50,000.
  • Though total expected deaths remain high, recent projections of the “worst case” have slightly improved.

Social Distancing

  • Social distancing is the primary driver of economic issues. Google has a useful tool that tracks and analyzes user behavior in response to policies aimed at combatting COVID-19 spread. Users can search by any region in the world and track mobility trends near retail and recreational areas, grocery stores and pharmacies, parks, transit stations, workplaces and residences.
  • Nationwide directives have had a significant impact on the everyday lives of Americans. Roughly 311 million people in at least 41 states, 3 counties, 8 cities, the District of Columbia, and Puerto Rico are being urged to stay home. This equates to about 85% of the U.S. population.

U.S. Fiscal Response

U.S. fiscal responses to the COVID-19 pandemic include:

  • The Families First Coronavirus Response ActThe Act includes ten sick days for full-time workers and is prorated for part-time workers. This legislation applies to most U.S. workers, although some restrictions exist. The Act also includes additional food support for low-income families through increased SNAP coverage, emergency food allotments and guaranteed school lunches.
  • The Family and Medical Leave Act – FMLA was amended to provide leave for employees of businesses with fewer than 500 staff members. Also, for workers who still require time off after the first two weeks, the act will cover these employees for up to 14 weeks.
  • The Coronavirus Aid, Relief, and Economic Security Act (CARES Act)The $2.2 trillion relief package will provide $1,200 checks to every American (with income restrictions). The package also includes an increase in weekly unemployment benefits, $350 billion in loans to small businesses, $500 billion in aid to corporations, $100 billion in aid to hospitals, $150 billion in aid to local and state governments, and a 60-day delay in home foreclosures.

[Upcoming Webcast: CARES Act: Impact on Small- to Mid-Sized Employers and Their Workforces | April 15, 2020]

What’s Next? – “A Roadmap to Reopening”

The American Enterprise Institute introduced a four phase “Roadmap to Reopening” a potential roadmap for navigating the COVID-19 pandemic going forward. The four phases include:

  • Phase 1: Slow the Spread – This phase includes keeping schools closed, working from home and closing malls, gyms and other public areas.
  • Phase 2: State-by-State Reopening – Phase 2 can occur when states can safely diagnose, treat and isolate COVID-19 cases. In this phase, schools and business can begin to resume in a phased fashion, with limitations on large gatherings remaining in place.
  • Phase 3: Establish Immune Protection and Lift Physical Distancing – In phase 3, the physical distancing restrictions from phase 2 are lifted when safe and effective tools for mitigating COVID risks are available. Tools may include broad surveillance, therapeutics that can prevent serious illness in those most-at-risk, or a safe and effective vaccine.
  • Phase 4: Rebuild our Readiness for the Next Pandemic – The final phase includes an investment into R&D initiatives, the expansion of public health and health care infrastructure, and the establishment of clear governance structures to execute strong preparedness plans.

Learn More

International Foundation and ISCEBS members can listen to the “Global Economic Outlook” webcast on-demand.

Coronavirus Resources

Coronavirus and the Workplace

Find more resources for plan sponsors:

Justin Held, CEBS
Senior Research Analyst at the International Foundation 

The latest from Word on Benefits:

Justin Held, CEBS

Senior Research Analyst at the International Foundation

Favorite Foundation Service: Foundation Research Surveys


Benefits Related Topics That Interest Him Most: Behavioral economics, socially responsible investing, apprenticeship training


Personal Insight: Justin loves everything baseball, visiting and checking off ballparks as he travels. In this free time, he enjoys hiking at national parks, cycling and reading about U.S. history.

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