NASHVILLE, Tenn. (WTVF) — With millions continuing to file for unemployment around the country, economists say we can expect fewer people spending unless we can make it safe to return to work.
Professor Andy Borchers is an associate dean at Lipscomb University, working in the College of Business. He says unlike recessions of the past, this came on suddenly.
“It was not a business or finance-driven event. This was a health-driven event. It’s still widespread. It’s not just a part of the country or a certain segment of the economy,” Borchers said.
Borchers says consumer confidence was at all-time high’s at the beginning of 2020, before bottoming out in April. Once businesses and states began to open back up in June, consumer confidence made a slight recovery, before once again falling in July.
Some experts predict our economy will follow a “U” trajectory, in which consumer confidence drops and remains there for months if not years, before making the climb back up.
Borchers says it’s very possible we follow a “V” trajectory where we take a sharp decline, only to rebound shortly after we have a better handle on how to make consumers feel safe wherever they choose to shop.
“I think what we need to look at are structural changes over time. As the economy adapts to a world that’s virtually driven,” Borchers said.
To get back on track, it starts with businesses taking all safety measures seriously, like wearing masks. With employees feeling safer, jobs return and with customers feeling safer, Borchers says people begin to spend again.
Local and state governments will of course have a say, but all this falls under the assumption that these safety measures have an impact on curbing the spread of COVID-19.
Which if that’s the case, we could see a return to business and a return to work for many around the country.
Why this is important is that 70 percent of our economy is based on consumer spending according to Borchers, but about half of all consumers now believe their family's income will drop.
It’s that hesitation to spend and the uncertainty over job security that Borchers says makes this an even more challenging hurdle.
“Right now we’re making it. We try not to waste a lot of money,” Brenden Holt said.
As of yesterday, Holt now has a very good reason to keep an eye on just how much he spends. This first-time father just welcomed a new baby boy into the world, but says he’s not sure what to expect with the economy in flux.
“We really didn’t calculate all the expenses with having a baby and everything, because I mean we didn’t expect any of this to happen,” Holt said.
Like so many others, Brenden and his wife are out of a job. They’ve relied on their unemployment benefits to hold them over until they can return to the jobs they say paid far better than whatever they may find on the market today.
With the $600 Pandemic Emergency Unemployment Compensation fund ending, Holt says Congress should understand that anything less could jeopardize families who’ve made it clear they want to work.
What is the rebound?
As Middle Tennessee works to rebound from the impact of the Coronavirus, we want to help. Whether it's getting back to work, making ends meet during this uncertain time, or managing the pressure, we're committed to finding solution. In addition, we want to tell your stories of hope, inspiration, and creativity as Middle Tennessee starts to rebound.
Find more in the sections below
More Safely Back to School storiesHow schools are changing, and what you can do to help your child get the most from their education, in-person or virtual
Getting Back To WorkLearn about the latest job openings, how to file for benefits and succeed in the job market.
Making Ends MeetFind help on topics from rent to food to new belt-tightening techniques.
Managing the PressureFeeling isolated or frustrated? Learn ways to connect with people virtually, get counseling or manage your stress.
Doing What’s RightKeep track of the way people are spending your tax dollars and treating your community.
State of EducationFind ways to cope with the new normal around schools and celebrate students’ success in the age of Coronavirus.
We're Open Y'allSupport local businesses doing their best to stay open and serve their customers during Covid.