A second long-term drag on the economy could come from structural adjustment. The pandemic has pushed people from brick-and-mortar businesses to online shopping; from working in offices to working remotely; and from consuming entertainment outside to consuming at home. Those demand shifts might never fully reverse themselves. If so, it means many retailers, restaurants and commercial property owners will shrink or go out of business. Vendors of online and digital goods will boom, but it will take some time for resources to shift from the old to the new.
Structural adjustment will also happen on an international scale, as supply chains and patterns of import demand shift. That could hit U.S. exporters, as well as companies that are dependent on foreign producers.
And the pain of structural changes might be worsened by what economists call local externalities. If 50% of the storefronts on a street are shuttered, it makes that street a less attractive place to eat, drink or shop. That can reduce foot traffic, causing other businesses in the area to fold. Some neighborhoods and cities may never recover from coronavirus, especially when the impact of recent anti-police brutality protests is added in.
Finally, the recession could be prolonged by policy mistakes. There are already are reports that Congressional Republicans plan to go slow on additional relief measures, or even block them. That could force cash-strapped states to make deep, damaging budget cuts, or leave many unemployed workers suddenly unable to pay rent. Letting up on relief measures while unemployment is still higher than at any time since the Great Depression would be a grave mistake.
So even with a partial bounce-back and no financial crisis, there are reasons that this downturn might drag on into the mid-2020s. Policy makers should not become complacent just because of one good month.
Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.