It is difficult to comprehend the duration of the COVID-19 pandemic using traditional measures. Businesses and communities have contended with its effects for nearly a year and experienced unprecedented impacts. Much of what we discuss in our daily lives is now influenced by questions of public health and economic recovery.
We now have a much better sense of the full magnitude of the pandemic’s effects over the balance of 2020. The U.S. economy increased by an estimated 4.4 percent in the 4th quarter but remains 3.5 percent smaller than the beginning of the year. The rate of growth and recovery has slowed significantly over the past three months both as the winter season set in and businesses returned to many of the challenges experienced in the early days of the pandemic. Similarly, economists now have a better sense of the structural hole that the economy needs to effectively be grown out of.
The holiday shopping season brought some relief to small business owners as communities urged shoppers to shop local. And a new round of federal stimulus funding announced last month will continue to provide needed assistance. Still, the nation is entering a critical phase as vaccines are deployed and the economy continues to recover.
In summary, we have seen both the Northeast WI and Central WI economies stagnate in the past several months as the impacts of the COVID-19 pandemic remain and employers find it difficult to hire needed talent. It is expected that the combination of new stimulus measures and vaccinations will lead to significantly higher growth in the first half of this year, though there is some disagreement on the timing.
Next quarter’s report will certainly be interesting. Until then, be well, be safe, be strong, be kind.