The COVID-19 pandemic has affected nearly every aspect of our lives, including the ways in which we communicate, and the way we work. In addition to the financial and economic strain, many people find it hard to effectively build professional relationships , and as a result their business relationships and prospects suffer. Since the global economic shutdown began in March, many small businesses have suffered , as discretionary spending has waned. The unemployment rate skyrocketed, as many jobs have either permanently or temporarily ended. Though some industries have rebounded, the US economy continues to suffer now, and likely will continue to suffer for as long as the pandemic rages on. The unemployment rate currently stands at 6.7% as of December 2020, with 10.7 million people unemployed. While this number isn’t as high as many initially feared, it is still up 3.2% from February 2020.
Jobless claims are still astronomically high, with 900,000 people seeking unemployment benefits in the third week of January 2021. Some analysts are predicting that the economy will start to recover during the second half of 2021, aided in part by the introduction of widespread vaccinations . It is no secret that COVID-19 will and has changed every aspect of life for the foreseeable future, but how will it fundamentally alter the US economy?
Household spending has and will continue to change
Since the US economy is primarily driven by consumer spending, there was and has been a significant setback since spending has faltered over the past year. Americans are not buying items that they want as much as they are buying essential, household necessities. Essential items such as toiletries, cleaning supplies, non-perishable food items, and disinfectant items flew off the shelves at the start of the pandemic, and continue to be best sellers. Consequently, there has been an emphasis on everyday household items as opposed to discretionary spending on clothing, eating out, and entertainment. It will take some time before these industries recover.
The US will continue to grapple with an eviction crisis
As a result of the economic fallout from the ongoing pandemic, many Americans are struggling and facing eviction from their homes. Although eviction moratoriums have been in place since the beginning of the pandemic, some states are still allowing evictions. The effects of these large scale evictions will last well into the future, with many individuals and families struggling to find accommodations amid financial struggles. This will significantly impact the economy for years to come.
Some industries will have a harder time bouncing back
The travel and leisure industry has been especially hit hard during this pandemic, with it being virtually impossible to take vacations and travel to countries with COVID restrictions. Additionally, the restaurant industry has suffered tremendously, due to dine in restrictions and the suffering economy. While the restaurant industry is expected to recover at the conclusion of this pandemic, other industries may not be granted the same fate. These industries include the fledgling theme park industry, agriculture, and entertainment industries.
Increased demand in the healthcare sector
The healthcare sector remains one of the most in-demand industries due to the aging and growing population. Recently, the rate of growth in the healthcare industry had increased a great deal, due to the pandemic. Doctors, Nurses, CNA’s, Pharmacists, Therapists, and other healthcare professionals have been assigned the monumental task of being first responders on the front line of this crisis. Increased demand in this industry will remain high for as long as the aftermath of this crisis is felt.
“Essential Work” has been re-defined
Special attention has been on the healthcare industry, as well as industries that are essential during this time. Grocery store clerks, delivery drivers, and gig economy workers who provide services for companies such as Uber, Instacart, Lyft, and Grubhub are now considered essential workers. These services gained popularity as people spend more time at home , and therefore utilize food and delivery services instead of traveling to potentially crowded stores. This trend will likely continue into the future, as consumer habits continue to evolve and COVID restrictions are still in place.
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