If you follow economic news, you probably heard that the country’s economic—gross domestic product—grew 4% last year. Except it didn’t.
If considered at an annualized rate, growth in the fourth quarter slowed to 4%. But, in fact, the actual growth in Q4 was 1%. Here’s a line from an analysis I received from Oxford Economics: “While the economy has recouped 75% of its recession output loss, GDP remains 2.5% below its pre-Covid level with the consumer engine sputtering.”
The firm is optimistic about the spring and expecting “record-breaking consumer spending” to lift overall growth (68% of GDP owes to consumer spending), based on “a watered-down” $1.2 trillion recovery plan and expanded vaccine availability.
The recovery money will help. It’s easy to forget how many people are deep on the edge because things haven’t come roaring back. Here’s an example from CNN:
Jennifer Davis lost her job as director of catering and special events at a small restaurant chain within 15 minutes of Maryland shuttering bars and eateries in mid-March.
Nearly 10 months later, Davis is still looking for work. A 20-plus-year veteran of the restaurant industry, she’s applied “nonstop” to a wide range of positions, including in management, operations and as an executive assistant, with little to no response.
Ms. Davis has a lot of company. According to the Bureau of Labor Statistics December jobs report, the number of long-term unemployed—meaning without a job for at least 27 weeks, which is more than six months—is 4 million. They may have trouble getting work again because employers start to see them as “damaged goods,” William Spriggs, Howard University economics professor and chief economist at the AFL-CIO, told CNN.
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That’s up by 2.8 million since February. In December 2019, the number of long-term unemployed was 1.2 million.
There are still 6.2 million people who are employed only part-time for “economic reasons,” which means they can’t find full-time work.
The number of people who are considered out of the work force—which can mean they don’t apply for a job, a condition that holds even if there doesn’t seem to be a job anywhere they can find—is 7.3 million. That is 2.3 million more than back in February 2020, before the pandemic really set in.
Another number from the December jobs report: 15.8 million people said they didn’t work at all or had fewer hours in the last four weeks because their employer lost business or closed, due to the pandemic.
Just a reminder to those still with work and some personal comfort that this is an ongoing recession far beyond normal.
Maybe business will begin to come back. But maybe it will take much longer for a new “normal,” that may look nothing like our memories.
Take the vaccine. There are reports about new variations of the virus that are more deadly and communicable than the original and which existing vaccines don’t fight as well. It will be like the flu as in a regularly changing and appearing set of diseases. It may be that masks and social distancing will be around for years to come.
This is a time for neither self-congratulation or relaxation. Getting people back to work and on a path for productivity isn’t a matter only of morality, though a question to conscience and principles it is.
Our economy stands at the edge of a pit, With hard work and encourage, we can keep it from falling in and taking all of us with it. If you worry about national debt (and always do, rather than only when there are calls to lower taxes), put the concerns on the back burner. What does it profit us if we are prudent to the point of bread lines forming for blocks?