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.
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.
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 US economy continues to generate new jobs, with the latest (September) report showing a modest gain of 661,000. The unemployment rate has decreased from 14.7% in April to 7.9% last month. Though the situation is improving, the total increase over the past few months is well below the 22.2 million lost during March and April. Additionally, the recovery has been decidedly uneven. The "rising tide" that was improving the lot of people from all socioeconomic groups prior to the pandemic has unfortunately turned.
Prior to COVID-19, the US was in the midst of a 10+ year expansion. While not perfect, the basic structure of the economy was basically sound. If this structure is kept intact, the recovery can be both robust and rapid. If it is allowed to deteriorate, things will inevitably be much worse.
The COVID-19 pandemic continues. Following significant surges in many states, signals in late July (at least as I am writing) have been modestly encouraging, with case numbers beginning to level off and COVID-related emergency room visits trending downward. Nonetheless, it will be a while before daily life or the economy can approach normal.
As the COVID-19 pandemic emerged this spring, college campuses across the United States swiftly sent students home in droves and switched to online distance learning. The quick transition came with hopes and expectations that things would be largely back to normal by the fall. However, such is not the case, and uncertainty is growing as the time to prepare is diminishing.
The debate surrounding reopening schools this fall seems to intensify daily. Students, parents, teachers, administrators, and government officials are struggling to weigh questions of safety against the realities of remote learning. It's a difficult issue with no easy or universal answers.
Texas is struggling to strike the appropriate balance in the tragic choice between effective public health measures and restoring vitality to the economy. Moving ahead with reopening before recommended safety milestones were met has led to reversals and setbacks on the path to progress. Physical health and economic health are both essential. Nowhere is this tension more intensely evident than in the tourism industry.
Measures taken to slow the spread of COVID-19, while necessary, have had substantial negative effects on the Texas economy. In addition to shutting down large segments of the economy, the pandemic has also contributed to a downturn in oil and natural gas. However, the state is well positioned to return to growth once social distancing requirements can be more fully relaxed. The Perryman Group's latest outlook calls for a significant drop in business activity this year, but a return to growth next year (and even later this year).