Jobs: From cuts to online commerce, virus reshaped economy
At first, it was expected to be brief. At least that was the hope.
Instead, a once-in-a-century pandemic has ground on for a year, throwing millions out of work and upending wide swathes of the American economy. Delivery services thrived while restaurants suffered. Home offices replaced downtown offices. Travel and entertainment spending dried up.
The job losses were swift and harsh. But they hardly fell equally across the economy. Black and Hispanic workers fared worse than others. And many women,
mostly mothers, felt compelled to quit the workforce to care for children being schooled online from home. Despite the job cuts, Americans as a whole socked away a record level of savings, buoyed by government aid to the unemployed and income that higher-paid workers, hunkered down at home, managed to squirrel away.
After a year of ghostly airports, empty sports stadiums and constant Zoom meetings, growing signs suggest that the economy is strengthening. Hiring picked up in February. Business restrictions have eased as the pace of viral infections has ebbed. Yet the economy remains far from normal.
Here’s where things stand at the one-year mark:
Job market reshaped
After a flood of layoffs last spring when the economy shut down, more than half the job losses have been regained. Yet hiring since the summer has slowed. The economy still has 9.5 million fewer jobs than before the pandemic — more than were lost in the entire 2008-2009 Great Recession.
Nearly every industry has been hurt but some far more than others. Restaurants, airlines and hotels have been devastated. The music industry, too, has taken a beating, with concert halls closed from New York to Nashville.
For small businesses, a fight to survive
The “For Rent” signs on storefronts and offices around the world provided a sad illustration of COVID’s ruinous effect on small businesses. With government restrictions and fear of infection keeping consumers out of stores and restaurants, businesses that operate on narrow revenue streams struggled over the past year. Or they vanished altogether, putting millions out of work.
It’s not known how many U.S. businesses have permanently closed, but estimates from economists and the online review site Yelp suggest hundreds of thousands. Many more may still fail. Womply, a provider of financial and other services to businesses, estimates that one-third to one-half of all bars remain closed in many states, along with at least a quarter of restaurants and a third of health and beauty businesses.
Travel industries hammered
Most travel-related industries suffered a horrendous 2020. Planes and airports were left all but empty. On April 14, the Transportation Security Administration screened just 87,000 passengers at U.S. airports — down a stunning 96% from the same day in 2019. Even early this month, screened passengers were still down 43% from a year earlier.
It’s not clear when — or whether — travel will fully recover. Southwest Airlines CEO Gary Kelly said in December that business travel, a major source of airline revenue, was still down 90%. Far fewer people need hotel rooms, too. In late February, U.S. hotel occupancy was just 48%, down one-quarter from a year earlier, according to the market data company STR.
Markets defy pandemic woes
Wall Street soared through much of the pandemic after righting itself from its initial terrifying plunge. Now, nearly a year after its rocket ride began in late March 2020, many fear that stock market gains might have gone too far, too fast.
Give much of the credit — or blame — for the market’s rally to the Federal Reserve, which slashed interest rates to record lows to help support the economy and financial markets. Ultra-low bond yields lifted hopes for corporate profits and fueled interest in stocks, especially the shares of the largest tech companies.
Some have dubbed the stampede into stocks the “There Is No Alternative,” or TINA, trade, whereby investors felt that with bond yields so low, they had no choice but to load up on stocks. Surging enthusiasm for stocks among a new generation of investors, some of whom were stuck at home with time to fill and free trading apps on their phones, played a role, too.