⏩ Economic rebound? Biden has inherited an economy pulverized by the pandemic but also showing signs of resiliency.
WASHINGTON — President Biden has inherited a badly damaged economy pulverized by the pandemic, with 10 million fewer jobs than a year ago and as many as 1 in 6 small businesses shut down.
Yet there are also signs of resilience and recovery that suggest the prospect of a rebound, perhaps a robust one, by the second half of his first year in office. Despite the bleakness of the economic landscape, Biden by most accounts faces a less daunting challenge than he confronted as vice president under Barack Obama more than a decade ago in the depths of the 200709 recession.
The hardships inflicted by the pandemic recession have been deep but concentrated in a few extremely hardhit sectors and harshly unequal. Much of the economy, particularly housing and manufacturing, has held up surprisingly well compared with previous recessions. People fortunate enough to keep their jobs — disproportionately affluent Americans — have bulked up their savings. They could be poised to unleash a spending boom later this year once vaccines have been more broadly distributed.
There are also signs that the job market, for all its deep losses, is enduring less permanent harm than it has in the past and might be set up for a fast hiring recovery.
Still, for now, many signs are dreary: Consumers have retrenched, and months of job gains have turned to losses. New applications for unemployment benefits remain shockingly high 10 months since layoffs first spiked last March. And the human toll of the pandemic recession, from depressingly long foodbank
lines to apartment evictions, has yet to show much improvement.
All of which helps explains why Biden saw the need last week to propose another mammoth federal rescue aid package — a $1.9 trillion plan to end what he called “a crisis of deep human suffering.”
The nation has regained more than half the 22 million jobs that were lost to the pandemic in March and April. But hiring has weakened for six
straight months. In December, it actually turned negative, with the loss of 140,000 jobs.
The raging pandemic took a fresh toll on the economy over the holiday shopping season, with sales at retail stores falling for three months in a row. Sales at restaurants and bars tumbled 4.5% in December and collapsed by onefifth for 2020 as a whole.
There are early signs, though, that the $600 checks for most Americans that were
authorized in last month’s rescue aid package are beginning to boost spending. Economists at Bank of America said that spending on their debit and credit cards jumped 9.7% for the week that ended Jan. 9 compared with a year earlier. That was up from a 2% yearoveryear increase before the $600 payments. And the increase was particularly pronounced for those making below $50,000 a year, who spent 22% more, Bank of America said.