Even with a vaccine, U.S. economy faces long path toward recovery – By Leticia Miranda (NBC News) / Nov 9 2020
Despite news of a promising vaccine candidate, the U.S. is still on track for a slow and grueling recovery, economists said.
The stock market surged Monday on promising news that Pfizer’s Covid-19 vaccine candidate had proved 90 percent effective in late-stage trials, signaling that some relief is on the horizon for the country’s pandemic-stricken economy. But as investors sell off tech stocks for investments in beleaguered leisure or hospitality companies, market strategists and analysts warn that the economy still faces a long path toward recovery.
“The news is encouraging, but it’s important to have a little bit of humility,” said Ryan Sweet, a senior director of economic research with Moody’s Analytics. “I think markets are looking a year ahead from now — if [the vaccine] is widely distributed, the economy will be healing more quickly.”
Despite news of a promising vaccine candidate, the U.S. is still on track for a slow and grueling economic recovery, economists said. Moody’s still forecasts that the country will not fully recover the 22 million jobs lost to the pandemic until 2024. The economy is still on course to contract by about 2.9 percent this year, according to estimates from Deutsche Bank. Meanwhile, about 13 million consumers reach a financial cliff in December when federal pandemic unemployment benefits expire.
“What we’re seeing” in Monday’s stock market rally “is a hope that a vaccine will return life to normal enough to favor those industries that have been heavily sold off,” said Paul Christopher, head of global market strategy with the Wells Fargo Investment Institute. “There is a tendency for markets to run with expectations, and those expectations are not met — and the same is true for the vaccine.”
