The current business environment is unusual. Unlike previous economic contractions in the past 100 years, the current contraction is driven by a deliberate decision to address a health crisis, rather than as a response to an overheated economy or asset bubble unwinding. Consumer demand is down due to a combination of lower household incomes and—for those whose jobs and pay remain untouched—far less opportunity to spend.
While aggregate demand is down and dropping, the contraction’s impact is extremely uneven. Some areas of the economy are seeing up to half of all businesses closing, while a few are thriving.