The “K” recovery:
We are all aware of the economic dive the world economy took in the first and second quarters followed by a strong rebound in the third quarter that continues today but in only certain sectors.
The insurance, scientific research, investment industries and tech companies such as Google and Facebook all recovered the jobs lost.
Those adding jobs include home-improvement, couriers, and ecommerce businesses.
The big losers are no surprise including entertainment, hospitality, retail stores, events, restaurants, and oil and gas exploration.
Those employed in the industries heavily impacted by the pandemic are generally lower wage earners and minorities. This gives you the “K” recovery. Those employed in the less impacted industries generally are well educated. The hospitality, events, restaurants, etc all employee less educated individuals and they expect their near- term options limited. That will change over time with a vaccine.
This is not a US only issue. As I am writing this blog an economist via Zoom for ACG Florida asks what type of recovery would one expect. He feels this is a global issue and with major cities closed for all practical purposes. This economist believes these sectors will remain impaired until such time as the major cities reopen.
How is your client’s industry situated for the next six months?
Do your clients have enough working capital or other resources to sustain them during the time period involved.