NEW HAVEN, Conn. —Suddenly, there is a credible case for a vaccine-led economic recovery. Modern science has delivered what must certainly be one of the greatest miracles of my long lifetime. Just as COVID-19 dragged the world economy into the sharpest and deepest recession on record, an equally powerful symmetry on the upside now seems possible.
Just ask American consumers, who, at 68% of GDP, have long accounted for the dominant share of aggregate demand. After plunging by an unprecedented 18% from January to April, total consumer spending has since recouped about 85% of that loss . But the devil is in the details. Face-to-face encounters But services consumption, which makes up over 61% of total consumer spending, is a different matter altogether. Services accounted for fully 72% of the collapse in total consumer spending from January to April. While services have since partly bounced back, they have recouped just 64% of the lockdown-induced losses earlier this year.
Precisely at the moment when the economic calendar typically expects an enormous surge of activity, the odds of a major seasonally adjusted disappointment are rising.
What’s defined as the “real economy”?
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