In the April issue of the National Retail Federation’s Monthly Economic Review, NRF Chief Economist Jack Kleinhenz says the coronavirus pandemic “has triggered shocks” – but that the underlying economy is sound.

“How quickly the country gets a handle on containing the virus will determine the degree of the impact on the economy and how soon businesses can reopen,” Kleinhenz wrote in the report. “We expect a severe contraction, and if the nation doesn’t get the virus under control the fallout will be worse.”

Gross domestic product that was growing at a 2.1 percent annual rate at the end of 2019 is “about to go into a mandated nosedive,” according to the report. And retail sales data for March – the first month when the outbreak had fully hit the United States – could be unreliable because many retailers whose businesses had closed were not in the office to reply to the Commerce Department’s monthly survey of sales results.

Unemployment claims soared to 3.3 million during the week ending March 21, nearly five times the previous record of 695,000 set in October 1982. With millions out of work across economic sectors and stores and restaurants closed to promote social distancing, “retail foot traffic is nearly nonexistent.”

Nonetheless, the U.S. economy benefited from “sound fundamentals” going into the COVID-19 crisis, and wasn’t “broken” in the way it was during the Great Recession of 2007-2009. “Once the pandemic is over, we hope we will find that there is nothing structurally wrong with the economy and that any deficiencies were solved by monetary and fiscal policies,” Kleinhenz says.

Recent actions by the Federal Reserve and Congress – including the loans, tax relief and checks for consumers in the Coronavirus Aid, Relief and Economic Security Act signed into law last week – will help by providing liquidity and keeping credit available for retailers and other businesses, Kleinhenz said.

Regardless of those efforts, bringing the virus under control remains the key: “All the policy we throw at this will not help unless we reduce the public health risks,” he says.