Against the backdrop of plunging employment figures and rapidly declining GDP as the pandemic took grip, the U.S. experienced one of the shortest-lived recessions of recent times.
CHANDLER, Ariz. (PRWEB) April 20, 2021
One year ago, the world sat in nervous anticipation of the yet-unknown ways that the novel coronavirus would change the shape and momentum of life as it was known. Despite the dire predictions of deep recessions and long-term plunging GDP, Dr. Christopher Thornberg of Beacon Economics, one of the nation’s leading independent economic research and consulting firms, took an in-depth look at how the U.S. economy fared and where it is heading during Western Alliance Bank and Alliance Association Bank’s virtual Economic Forum on March 23, 2021. While providing a broader picture of the fiscal health of the nation, these national trends also have the power to enhance or disrupt local economies, which play a critical role in maintaining the overall health of the timeshare industry.
Getting Back to Work
With a holistic look at the economy, the most significant pandemic-activated declines took place in the labor market, which sustained a significant downturn in March and April 2020, resulting in the loss of 22 million jobs, sending unemployment rates skyrocketing from 3.5% to 14.8%. A year later, more than half of the jobs have been recovered and the unemployment rate rests at 6.7%.
With the most substantial job loss (40%) occurring in the Leisure and Hospitality sector alone, Financial Activities and Professional, Scientific, Technical and Management Services remained largely unaffected. As the numbers suggest, lower-income and less-skilled workers were hardest hit. During the virtual event, Dr. Thornberg shared he anticipates strong recovery and growth in Leisure and Hospitality in 2021, yet not quite to pre-pandemic levels.
Examining Household Economic Health
Yet despite the job losses and unemployment dip, household savings have shot up to levels not seen in the history of the U.S., including 25% in the second quarter of 2020 and 13.4% by the end of the year due largely to fiscal stimulus. As well, household debt service payments were at their lowest share of disposable personal income in decades.
The webinar zeroed in on bigger pocketbooks, as well as recovering unemployment rates as the key drivers that will contribute to growth in 2021.
Key Sectors Under the Microscope
Dr. Thornberg also took a keen look at the health of key industries, which mirrored the unemployment rates. With Leisure and Hospitality seeing the largest decline, most industries were largely unaffected by the downturn. Wholesale Trade, Information Services, Financial Activities, Professional, Scientific and Tech Services and Management all experienced declines off less than 3% from December 2019 to December 2020.
Another major indicator of future economic health is within the residential real estate sector, which Dr. Thornberg predicts will continue its strong surge. Virtually uninterrupted by the pandemic, the sale of single-family homes across the nation increased by 23% from December 2019 to December 2020 in large part to low mortgage rates.
A Look Ahead
Against the backdrop of plunging employment figures and rapidly declining GDP as the pandemic took grip, the U.S. experienced one of the shortest-lived recessions of recent times. Although the bulk of the downturn was seen in April and May 2020, the economy saw a slight loss of momentum at the end of 2020 as the spread of coronavirus peaked and new variants emerged.
But as vaccine distribution becomes much wider and treatment options continue to improve, Dr. Thornberg predicts that 2021 will be a year of unprecedented growth in terms of recent history. Unlike prior recessions, the pandemic-induced recession occurred against a strong economy that included high savings rates, low household debt and a healthy consumer. It is anticipated that employment gains and anticipated consumer spending bolstered by the second fiscal stimulus package, will drive strong economic expansion in 2021.
For an in-depth view of the national economy, you may request a recording of the event by emailing email@example.com.
About Alliance Association Bank
Alliance Association Bank, a division of Western Alliance Bank, provides financing solutions to the growing community management and homeowner association industries with a high level of expertise and responsiveness. This specialized organization offers a wide range of innovative banking products and services designed to create efficiencies, reduce costs and increase revenue. Western Alliance Bank, Member FDIC, is the primary subsidiary of Phoenix-based Western Alliance Bancorporation, one of the country’s top-performing banking companies. Western Alliance was #1 best-performing of the 50 largest public U.S. banks in the most recent S&P Global Market Intelligence listing and ranks high on the Forbes “Best Banks in America” list year after year. Serving clients across the country wherever business happens, Western Alliance Bank operates individually branded, full-service banking divisions and has offices in key markets nationwide. For more information, visit allianceassociationbank.com.