A Look at the Economy

March 12, 2020

Rebecca Katzman

SOLD OUT Some store shelves are nearly empty as people stock up on supplies. TAYFUN COSKUN/ANADOLU AGENCY—GETTY IMAGES

Because of COVID-19, people are being more careful. “They don’t want to gather in groups where they may be in contact with somebody who has the virus” that causes it, money expert Jean Chatzky told TIME for Kids. Many are staying home and limiting travel. Large public events have been canceled. And when people aren’t out spending money, businesses, employees, and the overall economy economy XAVIERARNAU—GETTY IMAGES" the system by which goods and services are provided, sold, and bought (noun) I shop at small businesses to support the local economy. suffer.

Businesses are also having trouble keeping items in stock. Products used in the United States are often made in China. But China has been hit hard by COVID-19, so many things are in limited supply. These include some food items and toys.

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.

Stock Market Trouble

Concern about COVID-19 and its impact on the economy is affecting the stock market. This is where people can buy parts of public companies. These parts are called stocks or shares. When a company does well, its stocks go up. Shareholders shareholder HISPANOLISTIC—GETTY IMAGES someone who owns a part of a company or business (noun) Jen and James are shareholders in their dad's business. 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. “Markets hate uncertainty,” 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 that it’s important for kids to know about COVID-19 and to understand how it’s affecting businesses and the 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.