Before COVID-19 hit these shores, the 1957-58 pandemic had pretty much receded from the national consciousness. Well, it’s time to bring it back into focus, because there are potential lessons to be learned. First, a brief history:
“In February 1957, a new influenza A (H2N2) virus emerged in East Asia, triggering a pandemic (“Asian Flu”). This H2N2 virus was comprised of three different genes from an H2N2 virus that originated from an avian influenza…It was first reported in Singapore in February 1957, Hong Kong in April 1957, and in coastal cities in the United States in summer 1957. The estimated number of deaths was 1.1 million worldwide and 116,000 in the United States.” - 1957-1958 Pandemic (H2N2 virus)/CDC
Given the 1957-58 pandemic death toll, one would think the US economy would have been devastated at the time. After all, in the current pandemic, the global and US economies have already gone into a tailspin, even though global and US coronavirus deaths - 157,400 and 37,841 respectively (as of April 17) - are just a fraction of the lives lost in the earlier pandemic. And indeed the 1957-58 pandemic did trigger a recession - but it wasn’t horribly deep, nor did it last all that long. The following charts will tell the rest of that story.
The stock market came roaring back:
Economic growth rebounded after three quarters of recession:
Unemployment peaked at 7.5% but was down to 5% by the middle of 1959:
Of course history is not destiny. The global economy did not shut down so completely in the earlier pandemic. Stay-at-home lockdowns and the closing of nonessential businesses were not as widespread. Today’s overwhelming government response to the COVID-19 pandemic may very well be necessary to save lives, but it will also cause long-term economic damage that may delay economic recovery. To avoid that fate, let’s hope we’re able to go back to work soon.