Vaccine-fueled economic rebound expected in 2021

For more years than I care to count, I’ve gathered economic forecasts to try to spell out what we might expect in the new year when it comes to things like car sales, jobs and the stock market.

But if we’ve learned anything in 2020, shouldn’t we have discovered that fear — and a few flops — can really throw everything for a loop? Realistically, we need to recognize that a great deal of uncertainty will just move along to another spot on a new calendar.

The biggest upside, economists say, could happen if the coronavirus cases and deaths tumble, thanks to the vaccine. The risk is that this pandemic drags on far longer than anyone imagines.

Charles Ballard, professor of economics at Michigan State University, admits that a bigger caveat than usual might be needed in 2021 when it comes to economic forecasts in the midst of the coronavirus pandemic. Overall, he expects 2021 to be better than 2020 but risks remain.

“Progress on the economic front depends crucially on progress against the virus,” Ballard told me.

“If we get COVID under control reasonably well, I expect a surge of hiring in the late spring and early summer. When that happens, employers will invite workers back, but they will want those workers to be vaccinated,” Ballard said.

Just imagine all those spur-of-the-moment lunches out, the flights we could book to see family and friends, the cars we might buy if we’re driving to work, the vacations we might reschedule if we’re not fearful of getting sick.

What might we expect on the jobs front for 2021? Some predictions:

Hiring could be touch-and-go in some industries.

“The problem is that the bulk of the lost jobs are not coming back, even after the pandemic is in the history books,” according to Mark Zandi, chief economist for Moody’s Analytics.

Gus Faucher, the chief economist at PNC Financial Services Group, and others note that the jobs picture in 2021 will be cloudy for some people, who may find it tough to switch industries and learn new skills or find themselves taking pay cuts.

The new year does offer more hope than many felt throughout much of 2020.

Gabriel Ehrlich, director of the University of Michigan’s Research Seminar in Quantitative Economics, told me that news on the vaccine front generally has been better than expected early in the fall.

“If the rollout of the vaccines goes well,” Ehrlich said, “I think the strength of the recovery next year might surprise some people.

“Higher-income households have been spared the worst of this recession, and their spending should help drive a recovery in the hardest-hit sectors such as leisure and hospitality as the vaccines roll out,” Ehrlich said.

We will see how it all plays out. For now, we will wear our masks, stay home when we can, stand 6 feet away from others when we’re out, keep an eye on the vaccine rollout — and raise a toast to cautious optimism for 2021.