Data & Analysis
The impact of COVID-19 on the U.S. economy and employment
Summary:
In this assignment, I recorded the share of each sector in the national economy before Covid and compared it to what happened after Covid in the United States. Look at the reduction in the share of the economy to determine which areas have been more affected. Using the ratio of the unemployment rate in each field, containing each state's unemployment rate, based on the knowledge of the state's main economic base, we can get in what fields, the economy got impact most.
Graph 1: The share of each industry in the national economy in the United States before COVID-19 (2019).
This graph illustrates that the U.S. economy is made up of financial industries. According to the chart above, it can be concluded that of the $21.43 trillion GDP of the United States in 2019, a whopping $17.36 trillion belonged to the service sector, accounting for 81% of the total U.S. economy. Within this, a large portion is in the financial sector, tourism, business services, real estate, wholesale and retail trade, etc. The GDP created by the most core parts of the real economy, such as agriculture and industry (including manufacturing, mining, and construction), is only $4.07 trillion. Among them, the GDP created by the manufacturing industry is about 2.36 trillion dollars (the whole broad industry is about 3.9 trillion dollars), which is only equivalent to 13.6% of the GDP created by the U.S. service industry and 11% of the total U.S. economy.
Graph 2: The ratio of the unemployment rate in each field, 2019, in percent.
Based on this data, Mississippi had the highest unemployment rate in 2019 at 5.5%, followed by Alaska at 5.4% and New Mexico at 5.0%. North Dakota had the lowest unemployment rate at 2.3%, followed by Vermont and Utah at 2.3% and 2.5% respectively.
Unemployment rates here are not high, and there does not seem to be a correlation between high and low unemployment rates and the different economic development of the states.
Graph 3: The share of each industry in the national economy in the United States during COVID-19 (2020).
Comparing the data before and after COVID-19, we can observe some changes that indicate the pandemic's impact on different sectors. While these figures may seem small in percentage terms, a 0.5 percent change in the economy as a whole can mean tens of billions of dollars in market gains or losses. For example, Finance, insurance, real estate, rental, and leasing increased from 21% to 22%, possibly due to changes in the housing market, increased demand for insurance services, and fluctuations in financial markets. Educational services, health care, and social assistance went from 8.8% to 8.6%, reflecting the pandemic's effects on educational institutions and the increased strain on healthcare services. Arts, entertainment, recreation, accommodation, and food services decreased from 4.2% to 3.2%, as lockdowns, social distancing measures, and travel restrictions significantly impacted these industries. Manufacturing decreased from 11% to 10.87%, likely due to disruptions in supply chains and decreased consumer demand for certain goods. Transportation and warehousing increased from 3.2% to 2.7%, possibly due to reduced transportation demand and the shift to remote work. These changes in the economic data suggest that COVID-19 had a significant impact on the economy, affecting different sectors and industries in various ways.
Graph 4: The ratio of the unemployment rate in each field, 2020.
The data for the unemployment rates by state in 2020 shows a significant increase compared to the 2019 rates. This increase can be attributed to the impact of the COVID-19 pandemic on the US economy, which led to widespread job losses and a decrease in economic activity.
In 2020, Nevada, Hawaii, New York, and California were the states with the highest unemployment rates, with rates of 12.8%, 11.6%, 10.0%, and 10.6%, respectively. These states rely heavily on tourism and hospitality, industries that were hit particularly hard by the pandemic-related restrictions and closures. Other states that experienced a significant increase in unemployment rates include Michigan, Illinois, and New Jersey, which had rates of 9.9%, 9.5%, and 9.8%, respectively. These states have a significant manufacturing and service sector, which were also impacted by the pandemic.
On the other hand, states with lower unemployment rates in 2020 include Nebraska, South Dakota, Utah, and Vermont, which had rates of 4.2%, 4.6%, 4.7%, and 5.6%, respectively. These states have a relatively small population and a higher concentration of jobs in essential industries such as healthcare and agriculture, which were less affected by the pandemic-related shutdowns.
Overall, the data highlights the significant impact that the COVID-19 pandemic had on the US economy, particularly on industries such as hospitality, manufacturing, and services.
Summary:
Based on the graph 3 and 4. Looking at the share of each industry in the national economy from 2019 to 2020, we can see some notable changes:
The industries that experienced a decrease in their share of the national economy include mining, manufacturing, arts/entertainment/recreation/accommodation/food services, and transportation/warehousing. Of these industries, arts/entertainment/recreation/accommodation/ food services experienced the largest decrease, dropping from 4.2% in 2019 to 3.2% in 2020.
It's likely that these industries experienced higher unemployment rates due to the decrease in their share of the national economy. For example, individuals who were previously employed in the arts/entertainment/recreation/accommodation/food services industry may have lost their jobs due to decreased demand as a result of the pandemic. These reductions in the share of economic demand are reflected in the previous unemployment rate, which explains why states such as New York, California, and Illinois have experienced huge economic declines.
On the other hand, industries such as agriculture/forestry/fishing/hunting, public utilities, finance/insurance/real estate/rental/leasing, and state/local government experienced an increase in their share of the national economy. These industries may have experienced lower unemployment rates as a result of their increased share, as they were able to create more jobs to support their growth.