America’s Economy Begins to Shut Down as Pandemic Measures Take over

In some places, public officials and private business owners moved with stunning speed. In others, paralyzing hesitancy, defiant bravado or blithe disregard dominated. But by Monday, it was clear everywhere that most of the American economy was grinding to an unparalleled halt and would remain that way for months.

California took some of the most aggressive steps to curb the spread of the coronavirus, with San Francisco and its surrounding counties telling residents to “shelter in place” and not leave their homes unless necessary. Primary elections in Georgia, Kentucky and Louisiana were postponed.

On the East Coast, Gov. Phil Murphy of New Jersey recommended a blanket curfew from 8 p.m. to 5 a.m. for his state’s nine million residents. In New York, owners, waiters, chefs and bartenders arrived for work Monday as if for a funeral, ordered to close by Tuesday morning.

On Wall Street, brokers and analysts were acting as if an economic collapse were inevitable, despite the Federal Reserve’s emergency moves on Sunday night to stoke economic growth through an aggressive bond-buying program. The S&P 500 fell nearly 12 percent on Monday and global oil prices slid below $30 a barrel, the lowest level in more than four years.

With the stock market tumbling and anxiety coursing through many communities, President Trump on Monday afternoon announced federal guidelines that he said were meant to “blunt the infection now.” He warned against gatherings of more than 10 people, saying people should work from home when possible and avoid restaurants and bars.

Those actions are voluntary, though, and Mr. Trump said he was not considering a national quarantine right now but may consider one in “certain hotspots.”

Also unanswered by the White House was the question of precisely what individuals and local governments should do, as well as how business owners and workers might survive financially, at a time when vast sections of the economy were ceasing to function.

Wall Street offered a grim verdict. “We’re calling the recession,” said Gregory Daco, chief U.S. economist at Oxford Economics. “We have the three elements to make that call — a profound, pervasive and persistent contraction in economic activity.”

Governments around the globe scrambled to deal with the spread of the coronavirus, which has sickened at least 176,500 people worldwide and contributed to more than 7,350 deaths. Canada shut its borders to anyone who is not a citizen or permanent resident, while the European Union ordered a halt to all nonessential travel. In France, President Emmanuel Macron banned all social and family gatherings, placing the country in an unprecedented lockdown.

Even before the White House guidelines were released on Monday afternoon, school districts, towns, localities, cities and states were urgently pushing ahead with a chaotic hodgepodge of mandated restrictions and suggestions about how to keep the virus from spreading. Business groups, local and state leaders and a growing chorus of lawmakers and economists begged the federal government to spend trillions of dollars to pay workers to stay home and funnel money to companies struggling with an abrupt end to consumer activity.

The administration floated several ideas for helping industry without conveying a clear plan to provide financial assistance. While the main trade group for airlines suggested a $50 billion bailout might be needed for carriers, Mr. Trump’s chief economist, Larry Kudlow, said he did not expect the airlines to need a rescue but said the government would do what it could to help with cash flow issues.

“We don’t see the airlines failing, but if they get into a cash crunch we’re going to try to help them,” Mr. Kudlow told reporters on Monday.

Without concrete assurances of financial assistance from the federal government, employers and employees are torn between fears of being exposed to the virus and fears of running out of money to pay for food and electricity. And government officials are left with the unhappy task of shutting down businesses that provide wages for large swaths of their communities, while wondering what steps their neighbors are taking.

“You can’t have one state taking actions that are different from other states,” Gov. Andrew M. Cuomo of New York said on Monday morning, echoing the frustration of officials and business owners across the country who want a federal directive on how to respond. What good is it if New Jersey closes its bars, if people just drive across to New York or Connecticut to drink and then return home. “This is a national pandemic and there are no national rules,” he said.

In California, Gov. Gavin Newsom told all residents older than 65 to stay in their homes, banned nearly all visits to hospitals and nursing homes and announced plans to buy hotels to house some of the state’s 150,000 homeless people. He also closed bars, wineries and nightclubs.

Schools are closed in West Virginia but bars in Charleston, the capital, are still open. In Sun Prairie, Wis., Sunday services were held as usual at one church, even though three members of another church two miles away tested positive for the coronavirus last week.

“In case you’re wondering, we’re still on this morning,” Focus Church posted on its Facebook page.

In Chicago, some movie theaters are open, though they have instituted “social distancing plans” that block off seats in every other row. Regal Cinemas, by contrast, announced it was closing all its outlets after the White House guidance.

Although many restaurants, airlines and entertainment venues were shut down and many office workers stayed home on Monday, millions of Americans were still at work. Lowe’s, the home improvement chain, said all of its more than 1,700 stores were open for business. The company employs more than 270,000 people around the country. Home Depot, which employs about 400,000 people in its roughly 2,200 stores in the United States, was also open for business on Monday.

Boeing, the embattled aerospace giant, was continuing to assemble airplanes at its major factories in Everett, Wash., and North Charleston, S.C. UPS, which employs some 413,000 people in the United States, was still sending trucks out to deliver packages and processing orders. Merck, the pharmaceutical company, was continuing to produce and distribute drugs from facilities spread out across nine states.

The federal Centers for Disease Control recommended limiting gatherings to 50 or fewer attendees, but as Dr. Rex Archer, the director of the Kansas City Health Department, noted: “I’d rather have a meeting of 60 in a room that holds 500 than a meeting of 49 in a room that holds 50.”

Public health officials are united in arguing that eliminating as much person-to-person interaction as possible is necessary to control how quickly the coronavirus spreads so that the health care system can manage the caseload — what’s being called “flattening the curve.”

Then the central question becomes what should be done to counter the resulting widespread and potentially devastating economic hardships.

In Washington, lawmakers are working on a new fiscal stimulus package that could help workers and companies weather the storm. The House approved changes on Monday to its sweeping economic relief legislation, and its bill will head to the Senate, where it is unclear how quickly the legislation will pass.

Other businesses in addition to airlines are pushing for loans or direct government grants to fill the void of lost sales. Momentum is growing among Senate Republicans for more direct aid to workers who have been laid off or had their hours reduced. On Monday, Senator Mitt Romney of Utah called for the government to cut a $1,000 check, immediately, to every American.

Roughly four out of 10 Americans don’t have enough cash on hand to cover a $400 emergency expense like an unexpected car repair or medical bill without borrowing money, the Federal Reserve reported last year. And that was when the economy was running unimpeded with record-low jobless rates.

“People don’t have reserves, they live hand-to-mouth” said Joseph Stiglitz, a Nobel-winning economist. “People won’t be able to pay their rents, landlords won’t be able to pay their oil bills, the whole system could break down.”

Steve Coffle, owner of Helix Rotation Services in Atlanta, which cleans Airbnbs and other private rentals, said he told his contract employees he would try to help them out as the $80-a-gig jobs evaporated. “I’ve got enough floater cash to keep them going for another week or two, but that’s about all I can handle if I can’t get some revenue in,” he said.

Many businesses decided to close, including MGM Resorts International’s casinos on the Las Vegas Strip, Jose Andres restaurants in Washington and beyond, and iconic independent bookstores like Powell’s in Portland, Ore., and the Strand Book Store in New York. The Strand guaranteed to pay all employees scheduled to work through March 22.

Starbucks said on Sunday afternoon that it would temporarily close stores in high-traffic areas like shopping malls and eliminate seating in others; Blue Bottle Coffee said it would close all locations in the United States. On Monday, McDonald’s said company-owned restaurants would close seating areas, including the use of self-service beverage bars and kiosks.

But there were holdouts over the weekend: In Washington, the Hill Restaurant Group, which owns Hawk ‘n’ Dove, Lola’s and others, said it would defy a mayoral directive to shut down, as did Steve Smith, the owner of several popular nightspots like Tootsie’s Orchid Lounge and Kid Rock’s Big Ass Honky Tonk Steakhouse in Nashville, Tenn.

“We will not bow down to pressure from the mayor’s office or any group for that matter who covertly is attempting to shut us down,” the restaurant group said in a statement. “It is not our burden to bear nor is it our staffs burden to bear.”

After a backlash, both owners switched course and agreed on Monday to close.

The consequences of China’s harsh measures to halt the virus — restricting the movement of about 700 million people at one point — became apparent on Monday when the government released economic data showing industrial output falling to its lowest level in decades and unemployment rising at its highest rate ever in February.

In the United States, business owners say they need government assistance to survive. Molly Moon Neitzel, the owner of Molly Moon’s, an ice cream shop with eight locations across the Seattle area, had her sales plummet in recent weeks. Ms. Neitzel — who employs about 120 people in the winter and about 220 in the summer — asked her finance department to set up new metrics to track “Coronavirus period to date.”

“It is apocalyptic,” she said. “I sat down at my computer and wrote a memo to the mayor, the City Council, the city office of economic development, and folks in the governor’s office basically saying ‘This is really scary and it has come quickly and is putting small business owners out of business.’”

On Monday, Ms. Neitzel sent a companywide email to her employees saying Molly Moon’s was reducing hours and limiting service to takeout and delivery only. The company’s management will take a 20 percent pay cut, she wrote, and staff the stores. Hourly employees — about 90 people — will be laid off until business returns. “We hope to hire them back, along with more seasonal employees,” she said in an interview. “Because we hope it’s summer soon.”

Reporting was contributed by John Eligon, Stacy Cowley, Conor Dougherty, Michael Wines, David Gelles, Julie Bosman and Emily Cochrane.