New Year, New Upside
Just over one century ago the world was suffering through the Spanish Flu, one of the deadliest pandemics in history. But once the pain subsided in the spring of 1920, a decade of social and economic opulence – now known as the Roaring Twenties – ensued.
While the coronavirus pandemic isn’t over, many credible epidemiologists predict we will soon be coming down the caseload curve.
Now feels like as good a time as any to contemplate what could be in the cards in the post-pandemic world.
One of the most dramatic phenomena during the pandemic was the flight from urban density to suburban sprawl. More space, outdoor activities, and a yard for the quarantine puppy were all popular amenities last year.
The numbers tell the story. In New York City, the U.S. Postal Service processed 333,588 change of address requests between March and November.
But recent numbers suggest demand for suburb life may have peaked. In May, residential transactions in Manhattan were just 20% of their 2019 levels. By November, transaction activity had recovered, slightly eclipsing 2019 levels.
When urban offices do re-open, the commute may be challenged. The MTA (which operates the Metro-North commuter rail line) has warned that without $10+ billion federal aid, commuter services could be cut in half next year.
Roaring 20’s Reboot?
Public health restrictions have forced many to cut back on. Pent up demand for dining, drinking, vacations, and general entertainment. Zoom happy hour just isn’t going to stick. Many sociologists are predicting the world will enter a Great Gasby-esque era.
- Every month since the pandemic’s onset has shown a vastly higher personal savings rate than 2019’s average of 7.6%. According to the U.S. Bureau of Economic Analysis, the rate hit a record high of 33.7% in April.
- Moreover, the policy support for strong demand growth — government deficits and ultra-loose monetary policy — is likely to stay in place for some time.
A lot of social and economic upside to be hopeful about.