Where Our Economy Is One Year After Life Changed, According to Experts

Model globe is placed on spread US dollar banknotes.
berkay / iStock.com

The coronavirus pandemic has impacted pretty much every aspect of the economy including the GDP, unemployment, household spending, real estate and the stock market. As we reach the year-mark of living with the pandemic, GOBankingRates asked experts to weigh in on how they feel about the current economy compared to where we were this time last year.

Compare: Biden’s First Month vs. Trump’s: Here Are the Major Numbers To Know

US Employment Is Showing Signs of Recovery

“Ultimately, I think we are already in a good spot for economic growth and recovery,” said Ian Persaud, an advisor with Equitable Advisors. “In April 2020, unemployment rates were even higher than the rates of the Great Recession. The unemployment rate in April 2020 was approximately 14.8% and dropped down to 6.7% in December 2020. Continuing the trend, unemployment dropped another 0.4% in January, and is now at 6.3%.”

Vote: Do You Think the Minimum Wage Should Be $15? Take Our Poll

…But It Still Has a Ways To Go To Reach Pre-Pandemic Levels

“We’ve made up a lot of lost ground since the economy’s freefall early last spring. However, we’re still short of where we were before the pandemic hit, particularly in the job market,” said Gary Schlossberg, global strategist at the Wells Fargo Investment Institute. “While we expect to exceed the peak in GDP output reached during the fourth quarter of 2019 by the second quarter of this year, we’re still nearly 10 million jobs short of where we were at the peak in the job market in February 2020.”

Make Your Money Work for You

See: Calculating Your Stimulus Check: How Much (if Any) Will You Get?

Schlossberg notes that job recovery will take longer for certain sectors than others.

“Much like in a normal recession, there have been winners and losers,” he said. “Hit hardest have been labor-intensive services industries, particularly entertainment, travel, dining out and retailing. Social media, online shopping and the tech industry have been the big winners.”

2021 Will Be a Good Year for the Stock Market

“Even with interest rates going up slightly at the end of February, which caused an initial drop in the stock market, equities bounced back very strong a couple of days after,” Persaud said. “The S&P year-to-date is up about 2.5%, and the I believe interest rates will still remain relatively low for quite a while. I do believe that the 2021 year will produce a positive return in the stock market.”

Important: Beaten-Down Stocks Likely To Bounce Back After COVID-19

Timely Vaccine Distribution Will Get Us Back on Track

“I am optimistic about our ability to get in front of the pandemic and return to some semblance of normality out beyond 2021,” Schlossberg said. “Most impressive has been our ability to collapse the timeframe for development of a vaccine, using new technologies applicable to the fight against an array of other diseases.”

See: Vaccine Roll-Outs Are Expensive — But Not Vaccinating the World Would Cost $9 Trillion

With a timeline for a vaccine rollout, we are in a much better place than we were this time last year, Schlossberg said.

“There’s considerably less uncertainty about the economic outlook now compared to a year or even to six months ago,” he said. “If there was a game-changing event, it was news of highly effective vaccine results announced in early November. That provided us with a timeline, or trajectory for a return to some form of normality. In doing so, it places us in a very good spot for a recovery during the balance of the year featuring the strongest economic growth in the last 35 years.”

Overall, Economic Growth Will Be ‘Robust’ in 2021

“Economic growth in 2021 should be quite robust, given the massive stimulus packages and still-low interest rates,” said Craig Birk, chief investment officer at Personal Capital. “This assumes vaccines prove as effective as anticipated. While jobless rates are high, many have been saving at high rates and are likely to want to spend when the world opens up. Pent up demand for housing and moderate energy prices are also supportive.”

Make Your Money Work for You

More From GOBankingRates

About the Author

Gabrielle joined GOBankingRates in 2017 and brings with her a decade of experience in the journalism industry. Before joining the team, she was a staff writer-reporter for People Magazine and People.com. Her work has also appeared on E! Online, Us Weekly, Patch, Sweety High and Discover Los Angeles, and she has been featured on “Good Morning America” as a celebrity news expert. 

Untitled design (1)
Close popup The GBR Closer icon

Sending you timely financial stories that you can bank on.

Sign up for our daily newsletter for the latest financial news and trending topics.

Loading...
Please enter an email.
Please enter a valid email address.
There was an unknown error. Please try again later.

For our full Privacy Policy, click here.