To say that 2020 has been a rough year is an extreme understatement. The pandemic and actions taken to slow the spread of COVID-19 have been disruptive and, in many cases, devastating. Millions have slipped into poverty, are now food insecure or face housing challenges, or are experiencing mental health issues.
If there was a way for Texas to expand health insurance coverage to nearly a million of the state's most vulnerable people, enhancing their access to needed care, I think we can all agree that would be a very good thing. State budget constraints are a reality, but if the expansion could be accomplished without costing taxpayers anything, it would clearly be the right choice. What if Texas could increase coverage and actually come out ahead for taxpayers because of the substantial economic benefits? It would only make sense to do so. Right?
Among the myriad industries affected by the COVID-19 pandemic is one particularly critical to Texas: oil! As much of the global economy shut down to slow the spread of the virus this spring, fuel demand plummeted. Prices plunged, with futures contracts even briefly going negative. The industry initiated a rapid shutdown of drilling activity, which rippled through an enormous supply chain and supporting retail and service enterprises in the affected communities and the entire state. Many service firms and large swaths of production and reserves changed hands, as capital resources for small and mid-sized firms became virtually nonexistent.
Like most industries, retailers are struggling to deal with the pandemic. While it may be a decent year for spending, it looks quite different - with a holiday shopping season the likes of which we have never seen.
Student debt has been a growing problem for years and needs to be thoughtfully addressed. Recently, there have been calls for some type of uniform debt relief as part of a stimulus package. That is not the best solution.
A new trade agreement covering about 30% of the global economy has been signed. The Regional Comprehensive Economic Partnership (RCEP) includes China, Japan, South Korea, New Zealand, Australia, and 10 Southeast Asian economies. It's the world's largest in terms of the amount of gross product covered, slightly above the US-Mexico-Canada Agreement (USMCA) according to most estimates. About 2.1 billion people reside in member nations. India is not in the deal at this point but can join at a later date.
The presidential election is (almost) over, and sorting through the new directions under President-elect Biden has begun. There are still some votes to be counted (or recounted), litigation to be dealt with, and protocols to be followed before the election is officially certified, but it's highly unlikely that results will shift.
Our latest forecast update indicates significant declines in economic activity through 2020, despite a notable comeback from the dark days of spring, but a return to growth next year. In addition to the staggering and tragic human costs, the pandemic continues to curtail business activity. Even so, the economy, which was healthy going into the COVID-19 crisis, is signaling resilience and recovery potential.
The high human cost and loss of life due to COVID-19 is tragic and staggering. Few of us remained untouched by the disease in one way or another, with over 6.7 million US cases. As of October 28, the coronavirus had contributed to the death of more than 226,000 people in the United States. While the suffering and hardships imposed by these losses are incalculable and our primary concern, the economic consequences can't be ignored.
The most recent employment data indicates that the pace of hiring in Texas has slowed. In September, 40,700 net new jobs were added, compared to 111,900 in August. Moreover, the unemployment rate rose and is now higher than the national level. Not great news, but not unexpected.