Back in May and June, it looked like the economy might be pulling itself out of the doldrums pretty nicely. Businesses were starting to reopen, consumers were venturing out, workers were headed back.
But that was before COVID-19-related hospitalizations and deaths had starting to rise again. Now that they are, and officials in the South and West are shutting businesses down to stop the spread, rumors of the economy’s resurgence may have been premature.
There are a couple indicators showing the reopening recovery has stalled.
Nick Shields, an analyst at Third Bridge, follows retail foot traffic. It picked up in May. But now the resurgence of COVID-19 is taking a toll.
“Since late June, the biggest drop-offs are happening in Mississippi, Texas, South Carolina, Louisiana and Alabama,” Shields said.
Same story with jobs. Postings at the employment site Glassdoor are down 6% since the end of June.
So what kind of “recovery” does all this leave us with?
“We’re going to be seeing a W-shaped recovery,” said Camilla Yanushevsky, who tracks the consumer economy at CFRA Research.
That means trending down sharply, turning up a bit, then turning down again for the second half of the W. Yanushevsky said that’s probably where we are now.
“These reclosings, they’re driving consumers to be even more anxious about potential exposure,” she said. “It’s this fear that’s the biggest roadblock to any near-term sustainable improvement.”
All this fits with what independent florist Brooke Wetzel is seeing in her business. She said the giant wholesale flower market in downtown Los Angeles is operating sort of normally.
“Yeah, normal with mandatory face masks,” she said from the market.
Wetzel shut down in March and started up again a couple months later. She said folks still want to send flowers.
“People are still at home, and they can’t visit each other when they would’ve for a special occasion,” Wetzel said. “Babies are still being born. I mean, unfortunately people are still passing away. Everybody’s still having birthdays.”
Her business has been pretty good. But looking around the flower market, “I would say about three-quarters of the vendors are back, not everybody came back. They’re gone for good,” she said.
And with California closing businesses again, Wetzel hopes people don’t stop splurging on flowers.
COVID-19 Economy FAQs
What’s the outlook for vaccine supply?
Chief executives of America’s COVID-19 vaccine makers promised in congressional testimony to deliver the doses promised to the U.S. government by summer. The projections of confidence come after months of supply chain challenges and companies falling short of year-end projections for 2020. What changed? In part, drugmakers that normally compete are now actually helping one another. This has helped solve several supply chain issues, but not all of them.
How has the pandemic changed scientific research?
Over the past year, while some scientists turned their attention to COVID-19 and creating vaccines to fight it, most others had to pause their research — and re-imagine how to do it. Social distancing, limited lab capacity — “It’s less fun, I have to say. Like, for me the big part of the science is discussing the science with other people, getting excited about projects,” said Isabella Rauch, an immunologist at Oregon Health & Science University in Portland. Funding is also a big question for many.
What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?
Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”
Marketplace is on a mission.
We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.
Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?