Curtis Dubay said he has concerns for the economy if the country goes into another lockdown, but right now, signs are looking up.
On Wednesday, Oct. 14, members of the Forsyth County Chamber of Commerce took part in a virtual economic update presentation from Dubay, senior economist with the U.S. Chamber of Commerce, on how various parts of the economy have been impacted by COVID-19.
Dubay said while consumer confidence in the current economy was at a “near-record level” in February and early March before falling in April and May and rising steadily since, though still well below the original level.
However, he said while confidence in the current economy is shaky, consumers have faith in the long-run.
“What’s important here is that future sentiment has actually picked up more than current sentiment, and that’s a very good, encouraging sign because what consumers feel about the future really dictates what they are spending on big-ticket items,” said Dubay.
“So, you have to feel that the economy is going to be strong in the future, that your income is going to be strong if you want to buy things like a car, a home, a big electronic device, things that often require financing, you need to feel you’re going to have income to make those payments.”
According to information from the presentation, 23.4 million jobs lost were lost during the pandemic’s sharpest decline, though those numbers have recovered but will take a while to get back to where they were in February.
“Even with all that pretty strong growth, it takes until the end of next year, the fourth quarter of 2021 to get to that level of GDP we had at the end of last year,” Dubay said. “So, it takes almost two years to get back to where we were. That’s just what happens when you have a severe contraction like we underwent.”
While jobs were down, he said personal incomes were on average better than in February due to unemployment benefit, pandemic payments and employees returning to work.
“There’s been a lot of concern that those benefits being taken away will have a big negative impact on spending and consumption,” he said. “As you’ll see, consumption and retail sales are very strong. I am not as concerned as some about the impact of government benefits going away because, one, people are going back to work at very strong rates … however, those that aren’t, savings are through the roof.”