2 minute readSixty days.
COVID-19 redefined as it upended.
Out of the gate, in February 2020, the pandemic triggered upheaval in measures of income, employment, retail sales, and industrial production. The “decline in activity” across all of these fields of data checked the boxes.
And as the calendar year tipped from Q1 into Q2, the freefall was too profound for the
As of 2020, spending on residential fixed investment was about $885 billion, accounting for about 4.2% of GDP. Second, GDP includes all spending on housing services, which includes renters’ rents and utilities and homeowners’ imputed rent and utility payments. As of 2020, spending on housing services was about $2.8 trillion, accounting for 13.3% of GDP. Taken together, spending within the housing market accounted for 17.5% of GDP in 2020.
No doubt, a major contributor at a time the nation so needed an industry to rise up. And housing did so. Still, a serious challenge runs beneath and through these economic broad strokes and positive notes, and that is that the data are pinned to means and averages that can distort a realer, fuller accounting for both the economic damage of the pandemic and its more lasting, more ruinous impacts.
Calling the COVID Recession a record-breaker in brevity may be precise through the lens of the measurables that reflect healthy economic conditions on average. However, a K Recession and a K Recovery – one that leaves millions on the sidelines of long-term unemployment, and millions more forced altogether out of the labor participation count due to either pandemic-related premature, involuntary retirement or family obligations.
Bloomberg correspondent Catarina Saraiva writes that for both jobs and real estate, levels of inequality widened during the course of the pandemic recession and recovery:
The diverging strokes of the letter K represent the differing fortunes of the haves and have-nots following the deepest recession in decades. As joblessness surged and many households struggled to pay the bills, plenty of Americans were able to work from home and benefit from a sharp rise in asset values. Unprecedented stimulus from the Federal Reserve kept mortgage rates low and encouraged investors to buy equities. America’s richest people have seen their fortunes balloon.
Even as talk of yet another recession – this one following on the heels of Central Bank attempts to manage inflation by raising the costs to borrow and leverage debt on debt for growth – rises in volume, some fair number of Americans are celebrating history’s shortest recession on record.
For others, the trough is a condition that shows no glimmer of improvement.
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