Poll: Most Americans back Biden’s virus response
The poll shows that 70% of Americans back his handling of the virus response, including 44% of Republicans. Fewer approve of his handling of the economy, at 55%. (March 5)
A year after the COVID-19 pandemic triggered the deepest and fastest recession in U.S. history, the nation has climbed more than halfway back.
Along the way, the crisis spawned record job losses as well as fresh market highs and a surge in online shopping.
Nearly 13 million, or 58%, of the 22.4 million jobs wiped out in the pandemic have returned. And the economy has clawed back about 75% of its COVID-induced output losses.
“Given the depths of the contraction, the rebound has been faster than I expected but we still have a long way to go,” says Gus Faucher, chief economist of PNC Financial Services Group.
Much of that ground could be made up this year as widespread vaccinations and $2.8 trillion in government relief since December – and $6 trillion cumulatively during the crisis — set the stage for the strongest expansion since 1984. Oxford Economics expects 7% growth, along with 7 million new jobs, this year, as the economy reclaims its pre-pandemic gross domestic product by midyear and pre-crisis employment by 2022.
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There will be lasting scars — hundreds of thousands of business closures and several million long-term unemployed Americans who could struggle to find work. But, “I think we’ve done a good job of limiting the damage” through the relief measures, Faucher says.
The downturn also remains a study in contrasts. While restaurants and movie theaters have struggled to survive, big box stores and Amazon have raked in record profits. Airlines and cruise ships have relied on government life-support even as housing and technology have boomed. And low-wage restaurant and retail workers have lined up at food pantries while higher-income professionals who can work remotely have padded their savings and benefited from record stock prices.
Here’s a look at 11 charts that illustrate how the economy has collapsed, surged and found new “normals” in the year since the pandemic began.
The nation recovered 12.9 million of the 22.4 million jobs shed last spring as states eased restrictions and restaurants, shops and other outlets have reopened. But the road been bumpy. Payroll gains peaked at 4.8 million in July as businesses rehired furloughed employees, but then steadily declined before holiday pandemic spikes led to a 306,000 drop in employment in December. Falling COVID cases and a relaxing of business constraints in recent weeks resulted in 379,000 job gains in February. Employment remains 9.5 million jobs below its pre-pandemic level.
Total U.S. retail sales plunged a record 14.7% in April before government stimulus checks and generous unemployment benefits helped shoppers come roaring back. Sales rose 18.2% in May, 7.5% in June, and after dipping in December, 5.3% in January. They’re 7.4% above their pre-pandemic peak.
Restaurant and bar sales
After tumbling last March and April, sales at restaurants and bars – among the hardest-hit sectors — rebounded steadily as the weather warmed and eateries carved out additional outdoor dining space. But colder temperatures chilled traffic the final two months of last year before declining COVID cases and an easing of restrictions helped boost sales 6.9% in January. That still left restaurant income 16.6% below its pre-crisis high. More than 100,000 restaurants have permanently closed.
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Movie box office receipts
Gross sales nosedived as most theaters remain closed for months. Even when many reopened in August, revenue remained a fraction of pre-crisis levels as moviegoers stayed away, largely for health reasons, except for a Christmas week surge. Also, Hollywood postponed many of its eagerly awaited blockbusters until 2021, says Paul Dergarabedian, senior media analyst at Comscore. Sales rose in late February on falling COVID cases and growing vaccinations, he says.
Passenger trips generally have trended higher since bottoming in April but were still 71% below the year-ago level in January, according to the Airlines Reporting Corp., which tracks travel agency sales.
The pandemic and the home-centered economy it fostered have been a boon for e-commerce, with nonstore retail sales up 28% from pre-pandemic levels
Wild consumer price swings
Although overall inflation has remained well below the Fed’s 2% target, the pandemic has resulted in outsize price movements for some items. Airline fares plunged 21.3% over the past year as demand evaporated. Meanwhile, used car prices are up 10% as auto plant shutdowns early in the crisis left paltry new-car inventories even as many Americans who feared taking public transit bought vehicles.
The housing market has been the pandemic’s most prominent bright spot. Sales and prices slumped early last spring as Americans wary of contagion holed up in their homes, but they soon started soaring as people sought larger spaces, typically in less populated suburban and rural areas. In January, existing home sales were a stunning 23.7% above their year ago level, while the median price was up 14.1%.
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Rent in San Francisco
Rents in some large cities have dropped sharply as many Americans seek larger spaces and no longer need to live near urban offices since they can work from home — a trend that’s expected to persist, at least to some extent.
In the early days of the crisis, the Standard & Poor’s 500 index, a broad measure of U.S. stocks, fell 34% from its February 2020 peak. But the bear market was the shortest in history. Stocks steadily climbed back, powered by expectations that tech companies such as Apple and Amazon would thrive in a stay-at-home economy. Historically low interest rates also left investors few places to park their money. Buoyed by the prospect of a reopening economy this year, the index closed at 3,899 Wednesday, 74% above its nadir a year ago and just 0.9% below its all-time high last month.
Business orders for long-lasting goods such as computers and factory equipment – a proxy for business investment — cratered like everything else early in the crisis. But they’ve soared since April as companies like Amazon expanded warehouses for home delivery, the work-at-home market sparked a wave of tech-related spending and restaurants enhanced outdoor seating areas. In January, business investment was 4.7% above its pre-pandemic peak.