The Economist: A Year Later
It’s now been a year since COVID-19 began to upend the lives of people around the world. The human cost has been tragic, and measures needed to slow the spread of the virus have also taken a toll on mental health and wellbeing. From an economic perspective, the pandemic has caused substantial and, in many cases, catastrophic losses.
Millions of individuals have faced unemployment or reduced hours. Between February and April 2020, the total number of people working in Texas dropped by nearly 1.5 million (more than 10%). Initial unemployment claims went from averaging about 13,500 per week to closer to 300,000, topping out at nearly 315,200 in early April. Businesses dealt with closures, capacity limits, and additional expenses for cleaning or necessary modifications to enable safe operations. Supply chains were disrupted, causing yet more losses.
That’s the bad news. Now for the better – not quite all the way to “good,” but at least better – news.
Some industries have struggled to survive, particularly those hit hardest by lockdowns and bans, but the worst seems to be behind us. Airlines, hotels, and other travel businesses have recently begun to see some increased revenues. Restaurants and bars are now operating at more normal levels, though there is still far to go and pandemic risks remain.
Of particular note to the Texas economy, activity in the energy sector is beginning to be restored. The combination of an increase in supply and the pandemic-related sharp decline in demand caused oil prices to plunge, drilling and other activity along with it. Texas rig counts are in the 200 range, almost double where we were last summer and current prices support additional activity.
Some 878,600 Texas jobs have been regained as of the most recent data (January). While that’s still about 574,000 below the prior peak, it’s a notable improvement. Initial unemployment claims are now generally under 50,000 per week, several times higher than we’d like to see but well below the spring and summer of last year.
Vaccination supplies are picking up, and Texas is among the first large states to open up immunizations to all adults (March 29). How best to treat the virus is better understood and therapeutics are increasingly available. We aren’t out of the woods yet, particularly as new variants emerge, but at least we can see the clearing ahead.
Looking back over this year of pandemic is painful. Loss of life and health, loss of financial security, loss of interaction with loved ones, and so many other losses have dominated our world. At the same time, there is hope that normalcy can return in the foreseeable future, and with it a more robust economic expansion. Until then, stay safe.
Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com), which has served the needs of over 2,500 clients over the past four decades.
