Powered by consumers with trillions in extra savings, businesses eager to hire and enormous policy support. Businesses and workers are poised to emerge from the downturn with far less permanent damage than occurred after recent recessions, particularly the 2007-09 downturn.
“We’ve never had anything like it—a collapse and then a boom-like pickup,” said Allen Sinai, chief global economist and strategist at Decision Economics, Inc. “It is without historical parallel.”
A sustained rebound isn’t assured, suggested by the slowing improvement of many economic measures in April. And a resurgence of Covid-19 in the U.S. could derail it entirely.
Nonetheless, economists point to four key ways the current recovery differs from its predecessors:
Natural vs financial disaster
Past recessions typically resulted from a rise in interest rates or a decline in asset values that hurt output, income and employment, sometimes for more than a year
The Covid-19 recession, by comparison, didn’t result from financial factors, but from a disruption akin to a natural disaster.
Natural disasters temporarily interrupt economic activity while leaving intact the underlying demand and supply of goods and services. Once the disaster passes, the economy recovers faster than with a typical recession.
In this case, business just stopped for over a year, nothing was destroyed unless it was not shut down properly. What do your customers need to get opened up fast and smart?
Jancast # 100 (replay in case you missed it last week)
Sixteen years later and we are doing Jancast show #100! Mark Warner and I play some clips from past shows and it becomes pretty clear that we were ahead of our time with pathogen control, use of technology, and much more. Listen and watch this great recap of Jancast since the start in 2005.
Have a great day and an even better sales week and Stay Safe!