Don’t Expect Back to Normal for the Economy — Here’s Why


As we celebrate the second anniversary of the pandemic, it is appropriate to ask the following questions. Will it return to normal?

Increasingly, the answer seems to be no. We may never live like January 2020, and it is almost certain that a new normal will emerge.

There is data to support that opinion: Return to normal CNN index The index recently fell from a peak of over 95% in October to 84.4%. The trend in January is high, but the decline is Economy We continue to face challenges.

Return to normal CNN index

Source: CNN..

The Back-to-Normal Index is the result of a partnership between Moody’s Analytics and CNN Business. It consists of 37 national and 7 state level indicators. It ranges from zero, which indicates no economic activity, to 100%, which indicates that the economy returned to pre-pandemic levels in March 2020.

The recent decline, which began in October, corresponds to the increase in Omicron variants. However, before that, the index fluctuated between 90% and 95% since April 2021.

US may enter New Normal

The index component suggests changes that may define new normals.

In many states, about one-third of SMEs are completely closed. Even South Dakota, which is performing best by that standard, has closed 17% of its businesses. This will change the main streets and downtown districts of many cities.

E-commerce increased during the pandemic. This trend should continue to some extent. Those who can afford to order from the delivery service will do so.

Many families will struggle with the new normal. Report Job ads in the sector promoting low wages have leveled off in recent months. These are jobs that pay less than $ 15 an hour.

That could be bad news for the 286,000 Americans who submitted First claim For last week’s unemployment allowance. This is the highest level since mid-October, well above economists’ forecast of 220,000.

All this data shows an economy looking for steady state. But that may be months away.

Michael Carrteeth Editor True Options Master, One Transaction, Peak speed traderWhenPrecision profit.. He teaches technical and quantitative technical analysis at the New York Institute of Finance. Follow him on Twitter@MichaelCarrGuru.

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