MINNEAPOLIS (WCCO) — As 2020 comes to a close, WCCO asked three economists to share their insights on how the economy is doing.
“Sluggish,” said Daniel Zhao of Glassdoor.
“Poorly,” said Jeanne Boeh of Augsburg University.
“Very unequal,” said Mónica García-Pérez of St. Cloud State University.
We’ll start with unemployment.
“In general, we look at employment because employment means income. Income means people have money to spend,” Boeh said.
In November, the rate was 6.7%, down from a high of almost 15% in April, but still higher than before the pandemic. We’re at 4.4% in Minnesota
“We’ve seen unemployment, the improvement in the unemployment rate slow down, we’ve actually seen unemployment insurance claims rise in the past few weeks,” Zhao said.
And when you break this down further, García-Pérez says inequalities become clear.
“When we start looking at some groups, like Black males, Black women … or Latinos, we start seeing a disparity,” she said. “They have higher levels of unemployment and they haven’t caught up with the pre-COVID rate. It is good for a group of people, and it’s very bad for another set.”
Economists also look at income.
“What we need to be seeing is improvement, not a continuation of the status quo,” Zhao said.
And then there’s consumer spending.
“Some sectors have seen a boom,” García-Pérez said.
Those include goods and grocery stores.
“The sector services and food industry, tourism and hotels are feeling the impact,” she said.
Housing prices have gone up, but Boeh says there’s not been much activity.
“And here’s the other problem — if people don’t get back to work, the foreclosures are going to start going up again,” Boeh said. “We’re going to start to see the whole thing we saw in the last recession.”
Are there any bright spots in the economy right now?
“The bright spot is this vaccine, right?” García-Pérez said.
Zhao says getting the pandemic under control is “the long and short of it.”
“The sooner we can return to normal, the better,” Boeh said.
The economists were split on just how much the COVID relief bill would help the economy. One said we won’t really be in good shape until more jobs come back.
All agreed $600 checks are not enough.
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