The introduction of the vaccines and the future Democratic government make Wall Street look damn optimistic: Goldman Sachs even goes so far as to forecast GDP growth of over 6% in 2021– what if it happened, that would be highest growth rate since 1984.
But don’t write it in yet. Look no further than Friday’s job report, that found the nation lost 140,000 jobs in December– Our first net job loss since April.
It takes more than confident Wall Street to sustain an economic recovery. Main Street, or American consumers, who account for two-thirds of GDP, should also feel safe enough to buy big-ticket items and take risks. To get a pulse on how Americans feel capital analyzed data from more than 30 surveys carried out by Civis Analytics since the outbreak of the crisis.
We noticed that Americans are a little more optimistic now than they were last spring, but they’re still in the dumps. Even after vaccines have started to roll out, concerns about the virus remain great. In December, 53% of adults in the United States said they were very concerned about COVID-19. This is little less than in April 2020 – the height of the shutdown – when 57% shared this assessment. One of the economic lessons of 2020 is that anxious consumers mean less economic activity. Simply put, we can only fully recover if the virus and those fears are gone.
The country lost 22.2 million workforce jobs in March and April. When the states began to reopen, 12.5 million jobs returned between May and November. However, this initial recovery did not calm many people. In April, 32% of American workers told Civis Analytics they were very worried about losing their job. In December it was 28%.
What does that mean for business? For one thing, an anxious employee may be less willing to take risks. That could mean passing on work projects with great potential for failure. On the flip side, those big bets often turn into big payouts that improve company bottom line.
56% of adults in the United States as of December said they are still very concerned about their local economy. That despite, at least on paper, This is one of the fastest recoveries in US history: The unemployment rate (6.7%) was only over 7% for six months compared to the 59 months during and after the Great Recession.
If that dark outlook persists, expect more Americans to put off big purchases, pass on job-hopping opportunities, and even avoid the new business venture they’d been thinking about.
* Methodology: Civis Analytics conducted more than 30 surveys between March 20th and December 18th. Each survey received over 1,000 responses. The results were weighted by age, race, gender, education, and geography.
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