While the virus pandemic depression is over, the conventional recession could be nearing as economic growth falters. The fiscal cliff will soon enter the third month; high unemployment is rampant and small and mid-sized businesses remain in financial distress as daily virus caseloads hit new record highs.
For some economic realities, one that is far from President Trump’s “V-shaped” recovery narrative, Mark Zandi, the chief economist for Moody’s Analytics, told NYT the US economy “is going to be a long slog” from here, with estimates of a downturn lasting until 2023.
A multi-year downturn comes as no surprise following one of the steepest economic contractions in history. Zandi also examined NYC, the largest municipal and regional economy in the US, only to discover a recovery might not be seen until 2025:
“This is an event that struck right at the heart of New York’s comparative advantages,” Zandi said. “Being globally oriented, being stacked up in skyscrapers and packed together in stadiums: the very thing that made New York the pandemic undermined New York, was upended by it.”
Zandi said NYC’s recovery could take two years longer than the rest of the country as the virus-induced downturn has severely damaged five key industries – restaurants, hotels, the arts, transportation, and building services – most of which heavily rely on travel and tourism.
For more color on the recovery, high-frequency data from Opportunity Insights shows the percentage change in all consumer spending on a national level is still below March levels, even though the federal government helicopter dropped stimulus checks to tens of millions of Americans.
Percent change in small business revenue on a national level shows a muted recovery.
The national employment picture is not a good one, as well.
Employment claims could be ready to turn up as a double-dip recession could be nearing.
What’s happening now is the awesome recovery narrative touted by President Trump and Wall Street are quickly fading as stimulus hopes collapse.