Many analysts were surprised by the recent employment report. Job growth was much slower than expected. Despite a recovery, more than 40% of workers in the beauty sector remain unemployed. That reflects changes in the industry. Policymakers need to use the time before benefits expire to understand the new normal and work to help employees in businesses that won’t ever recover.
Last week, General Motors reported strong earnings. It could have been an even stronger quarter. While some analysts believe the chip shortage is because electronics makers are buying more chips, that’s only part of the story. The chip shortage is just one supply chain bottleneck. But the reason for the shortage is a series of decisions that created a reliance on just a few manufacturers.
In early 2020, much of the economy shut down. Money made was put into savings. Now, trillions in savings sit largely unused in checking accounts. As the economy reopens, excess savings could fuel gains stock market gains .
Before the pandemic, increased globalization seemed certain. Now, with the gulf between the recovery of the U.S. and Eurozone growing, there could be a shift towards nationalism as the lackluster k-shaped recovery in the rest of the world threatens the U.S.
COVID led to economic shutdowns around the world. Based on the information available to policymakers, that was a justifiable response. In the U.S., this included stimulus checks, extended unemployment benefits and other programs to maintain incomes for as many people as possible. With the COVID response, Congress and the Federal Reserve have both created unprecedented amounts of money. Significant economic changes followed wars and are likely to follow COVID.
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