New Federal Reserve Report Shows COVID-19’s Impact on Communities

ST. LOUIS — A new report from the Federal Reserve System summarizes the scope and scale of challenges that U.S. communities are facing from COVID-19.

“Perspectives from Main Street: The Impact of COVID-19 on Communities and the Entities Serving Them” examines findings from a national survey of nonprofit organizations, financial institutions, government agencies and other community-based organizations. This report was co-authored by Daniel Paul Davis, vice president of community development and community affairs officer at the St. Louis Fed.

The survey was conducted in April 2020 with nearly 3,900 respondents. Key findings include:

• Nearly 7 out of 10 respondents indicated that COVID-19 was a significant disruption to the economic conditions of the communities they serve and said recovery is expected to be difficult.
• Income loss, business impacts, health concerns and basic consumer needs were the most frequently cited impacts of COVID-19.
• Over one-third of respondents indicated it will take longer than 12 months for their communities to return to the conditions prior to the disruption from COVID-19.
• 25% of respondents indicated their entity could operate for less than three months in the current environment before exhibiting financial distress.

“As leaders take efforts to slow the spread of the virus and protect public health, we are gauging the impact of COVID-19 to help position policymakers, community development experts and other decision-makers to best respond. To do that, we are gathering timely information from the communities we serve,” Davis said. “The Federal Reserve works to foster economically resilient communities, and this is especially important during an unprecedented time like this.”

More than 300 respondents were from the Eighth Federal Reserve District served by the St. Louis Fed. Some 65% of responding Eighth District organizations said they serve rural communities; 51% serve urban areas; and 36% serve suburban areas.

This survey will continue to be conducted about every eight weeks, with findings then updated.

The St. Louis Fed seeks to promote the economic resilience and mobility of individuals and communities, including low- to moderate-income and underserved households. Regular engagement helps the St. Louis Fed understand the economic conditions of the Eighth District’s diverse communities. More about Community Development at the St. Louis Fed.