Why didn’t the Spanish Flu devastate the U.S. economy the way coronavirus has? It’s tempting to conclude that modern-day lockdowns are simply harsher than the distancing measures of 1918. But although data from the era is patchy, the anecdotes in the St. Louis Fed report suggest that retail businesses did suffer enormously, just as now. Fear of the virus, not government restrictions, was likely the biggest driver of lost revenue then as today.

A more important factor was the difference in the structure of the economy. A century ago, less than half of all workers were employed in service industries; now, about 86% are. Manufacturing and agriculture were less vulnerable to the pandemic than retail and other businesses that depended on lots of customer traffic.

The impact of the war economy was a related factor. As some economists have pointed out, WW I was still exerting a tremendous influence on production in 1918. The government simply mandated that factories stay open to meet war needs. This likely made the epidemic worse but reduced the blow to economic output. By the time the economy started shifting back toward peacetime industries, the flu was gone.