Pfizer shared an update on their vaccine trials recently, claiming that it is 90% effective. This provides a ray of hope for the rapidly dwindling US economy; however, many analysts predict that it’s still going to take a long time for the economy to recover fully.
According to Moody’s Analytics, the 22 million jobs lost because of the pandemic will not be recovered by 2024. Moreover, since the government unemployment benefits provided in light of the pandemic are expiring in December, many people will be in financial trouble.
Pfizer has also explained that economic recovery depends on how the problems associated with distribution are handled. The vaccine has to be stored under 94 degrees Fahrenheit. This calls for refrigerators and vials that are specially designed for this purpose.
The head of the global marketing strategy of Wells Fargo Investment Institute advises that people should not invest heavily in this market as of yet because the upcoming results might be unpredictable.
However, the chief US equity and global strategist of Deutsche Bank Securities provides some hope. She believes that the vaccine will aid industries that depended on the face to face interactions and have suffered because of the pandemic. The hospitality and leisure industry saw a loss of 7.7 million jobs as well as the retail industry which lost 1.9 million jobs.
She continues to add that since the economy will be recovering faster than expected; the cyclical sector will benefit from this.
Bain and Co conducted a survey that showed that half of the consumers had not been to malls or stores since the pandemic started. Many responded that they do not want to shop face to face or travel as of yet as they don’t feel comfortable doing so.
The managing director of State Street Global Advisors has predicted that when jobs in the retail sector are recovered, consumers will automatically return to eating out as well as shopping in brick and mortar stores. He continues to add that as the jobs increase, consumer confidence, as well as consumer spending will also rise. This will be the ticket back to a recovering economy.
He proceeds to explain that even though the economy will see a recovery due to the vaccine, it will be considerably weaker than it was before.