The post-pandemic economy will not resemble the one we knew before the COVID virus struck, Jerome Powell, Chair of Federal Reserve, said on 11 November at the European Central Bank’s Forum on Central Banking 2020.
The recovery will bring a “different economy” more dependent on technology and automation, in part because more office workers will permanently work from home, he said.
The shift to this new economy will worsen inequities because many face-to-face workers, such as those in restaurants and hotels, will never return to those jobs.
Women also will feel the impact, he noted, because many will forego their careers to tend children schooling at home, taking economically productive workers out of the labor force.
“Even after the unemployment rate goes down and there’s a vaccine, there’s going to be a probably substantial group of workers who are going to need support as they’re finding their way in the post-pandemic economy, because it’s going to be different in some fundamental ways,” Powell cautioned.
Both the Fed and Congress need to do more to energize the U.S. economy, Powell again emphasized.
TREND FORECAST: The stock market, which had rallied on news of Pfizer’s vaccine, slumped after Powell’s comments. While stocks are rising and falling on vaccine news, the economic devastation caused by the continuing rounds of draconian lockdown rules will not be instantly revived by a shot of vaccines. Again, we maintain our forecast that when mass vaccinations are imposed, economies will temporarily rebound before cascading deeper into the “Greatest Depression.”
TREND FORECAST: To illustrate the general weakness of the economy, U.S. retail sales rose just 0.3 percent, down from a 1.6 percent rise in September.
New government restrictions and the fear many have of going into public places such as restaurants, bars, and stores – plus the loss of government stimulus checks – will keep retail sales weak.
Indeed, following Thanksgiving, there will be no “Black Friday” rush for consumers to begin their Christmas shopping this year. And with states across the nation limiting the size of family gatherings during the holidays, less Christmas gifts will be purchased.
