For over a year, those in the know have been talking about what trajectory the post-pandemic econoimc recovery would take.
First economists were touting a sharp upturn, or a "V"-shaped recovery, which did not happen. Then there was talk of a "U," whereby the recovery would be less pronounced. That also did not happen.
Next up was talk about a "K"-shpaed recovery, one where the upper slant in the letter K represented middle- and upper-middle class people in insulated, white-collar jobs that have permitted them to work from home and meet via Zoom. The lower slant, experts said, were people in service sectors reliant on in-person deliveries, who have been laid off, downsized or put on furlough.
This K-shaped recovery was the rationale, in fact, for much of the COVID-19-related relief provided to individuals and through state and local governments and extended unemployment benefits and programs such as a moratorium on evictions and temporary foregiveness of student loan payments.
Enter Recovery 'Z'
The new talk among economists is a "Z"-shaped recovery, Chief Investment Officer magazine reports. In this scenario, the "Z" tilts to the left to show an uward, downward and then upward movement. "Z" proponents say it explains the fits-and-starts recovery that appears to be working in the different sectors of the economy and globe.
For instance, economic growth has been stronger in developed nations, or what some call "rich economies," purchasing managers' surveys show. These regions include the U.S., Japan and Australia where fears of the Delta variant are lower than in other regions of the globe. In addition, service-sector businesses are doing very well in the U.S., CIO magazine says.
Growth in Europe has been more muted, particularly as companies say that supply chain disruptions are interrupting manufacturing. These problems are now beginning to impact the post-pandemic economic recovery in the U.S., CIO magazine says.
Putting a damper on all areas of the globe now, is the spectre of inflation and taxes. That is now the $64,000 question.
© 2022 Newsmax Finance. All rights reserved.