To borrow an old phrase, the only predictable thing about the economy is that it is unpredictable.
That can be true during the best of times; it is a certainty in the midst of a pandemic. COVID-19 has left millions of Americans without work — and, in many of those cases, without health insurance; has dampened consumer spending and personal income; and has been particularly difficult for small businesses and low-wage workers.
On the other hand, in some ways it has not been as disastrous as initially predicted. For example, forecasts early in the pandemic, which began in March, were that state government revenue would face a shortfall of more than $8 billion by mid-2023; that was soon revised to an expected decline of closer to $3 billion. With state revenue largely driven by sales tax, that number provides an indication of how the economy is churning throughout Washington.
With the pandemic continuing to linger but with vaccines now available, the economic outlook remains unpredictable. Which means it is a good time for The Columbian’s annual Economic Forecast. The event is being held remotely at 10 a.m. today and is free; registration is available online.
Local experts will provide insight into what is a most uncertain future for Clark County while recapping an unprecedented past 11 months.
As detailed in a Columbian article Sunday, the most notable local impact of the coronavirus economy has been the number of unemployment claims. There were an average of about 12,000 weekly claims in Clark County during 2020; in recent years, the average has been between 2,200 and 2,700.
Nationally, about 16 million people were receiving unemployment payments as of Jan. 2. And prior to COVID-19, the weekly record for new claims was 695,000 in 1982; since March, that number routinely has been significantly higher.
In a distressing development, the United States lost 140,000 jobs and consumer spending declined in December, rather than showing a recovery nine months into the pandemic. “We must act now to get this virus under control, stabilize the economy, and reduce the long-term scarring that will only worsen if bold action isn’t taken,” said Brian Deese, the Biden administration’s National Economic Council director.
That highlights the need for additional federal assistance. President Joe Biden has proposed a new $1.9 billion relief package; in an effort to garner bipartisan support rather than having Democrats unilaterally push the package through Congress, he is meeting with Republican leaders to forge a compromise.
Federal response should focus on small businesses, particularly restaurants hampered by restrictions on in-house dining; additional stimulus checks to individuals; the vaccine rollout; and health care for those who have lost it.
Each of those will have an impact at the ground level, assisting residents who, in turn, help boost the local economy. Some economic factors will not recover until the pandemic dissipates; for example, hotel occupancy in Clark County sharply declined in 2020. But assisting individuals will have a trickle-up impact that is essential to keeping the economy afloat.
Eventually, we trust, the pandemic will be brought under control and the economy will return to something resembling normalcy. But there undoubtedly will be lingering effects, particularly for hourly wage workers. At this point, it all remains unpredictable.