A Look at the Economy
March 20, 2020
Because of the COVID-19 health emergency, people are being more cautious. “They don’t want to gather in groups where they may be in contact with somebody who has the virus” that causes it, financial expert Jean Chatzky told TIME for Kids. Many are staying home and limiting travel in order to avoid exposure. Large public events have been canceled. And when people aren’t out in the community and spending money, businesses, employees, and the overall economy suffer.
Businesses are also having trouble keeping certain items in stock. Products used in the United States are often made in China. But China has been hit hard by COVID-19. As a result, many things—from basic food staples to toys to tech gadgets—are in limited supply.
There are also shortages of health and cleaning products. As people stock up, some stores are running out of items such as hand sanitizer and disinfecting wipes. “These things are flying off the shelves,” Chatzky says. “People are doing whatever they can to feel protected.”
Stock Market Trouble
Concern about COVID-19 and its impact on the economy is also affecting the stock market. The stock market is where people can buy parts of public companies called stocks or shares. When a company does well, its stocks tend to go up and shareholders make money. When a company does poorly, the opposite happens. Because the COVID-19 outbreaks are hurting many businesses, stock prices are falling.
On March 9, the stock market lost more money than it had in one day since 2008. Its sudden drop in value caused the buying and selling of stocks to be halted for 15 minutes. “Markets hate uncertainty—they like to know what’s coming,” Chatzky says. And unfortunately, no one knows how long the COVID-19 outbreaks will last or how widely the disease will spread. In a televised speech on March 11, President Donald Trump announced a number of actions the federal government would take to try to help the economy recover.
Chatzky says it’s important for children to know about COVID-19 and to understand how it’s affecting local businesses and the global economy. “The more you know,” she says, “the less likely you are to be afraid.”
This story appears in the March 20, 2020, print edition of TIME for Kids. It was published online on the afternoon of March 12. It has not been updated.