Editorial: The long road to recovery

An unpredictable and tumultuous two years during the pandemic have given way to cautious optimism about the regional economic recovery, Old Dominion University researchers told a forum in January.

There are concerns about inflation, of course, and worry that the benefits of recovery aren’t widely shared — that certain sectors of the economy and certain subsets of the population are being left behind.

Still, the results so far are promising. But it’s essential that officials remain focused on ensuring those who have shouldered the greatest load during this pandemic aren’t further burdened as the economy continues to strengthen in the coming months.

Hampton Roads — like much of the nation — has enjoyed an unprecedented bounce back from the worst part of the pandemic and, despite harmful inflation, is in better shape than anyone imagined even one year ago.

ODU economists Robert M. McNab and Vinod Agarwal provided the economic forecast near the end of January at an annual economic event in Norfolk. McNab, director of the Dragas Center for Economic Analysis and Policy in the Strome College of Business, and Agarwal, director of ODU’s Economic Forecasting Project, saw plenty of reasons for hope.

Improving the economy — locally, regionally, nationally, globally — hinges on fighting COVID-19 effectively. To that end, the vaccines are our most powerful weapon, a gamechanger which has allowed people to return to work, for businesses to operate unimpeded, for schools to remain open and for consumers to return to normal spending habits.

Though communities in Hampton Roads could and should do more to vaccinate their populations, distribution of the shots in Virginia 2021 paved the way for a remarkable economic recovery throughout that year.

The commonwealth has about 100,000 non-farm jobs than it did at the start of the pandemic and has recovered more than 375,000 lost jobs from the low point in April 2020. The gap between job opening and job quits is growing as workers consider their options and utilize their increasing power in a fluctuating economy.

Inflation remains the most consequential X-factor in any economic outlook. The U.S. Labor Department last week announced the consumer price index for January rose 7.5% compared with a year ago, outpacing even the most pessimistic expectations.

There’s a number of forces helping to create that uncertainty, including supply-chain disruptions, central bank policies and federal spending, ongoing problems related to the pandemic and recovery, and dramatic changes in the workforce. But inflation didn’t arrive overnight and it will be a while before it dissipates.

Both McNab and Agarwal believe that things will improve, as they outlined in a list of expectations for the coming year.

These include continued progress in vaccinations, which will help economic recovery. They see supply-chain problems easing, though not until 2023. And they see continued fluctuation in the workforce as the Baby Boomer generation retires (though they won’t be alone in evaluating their career options in a post-pandemic workplace).

But they also had some dour predictions for 2022, including the continued inability of Congress to work productively on federal spending bills — something that would have an outsized effect on the state and regional economy, given our dependence of Washington’s largesse. And whatever transpires among Ukraine, Russia and NATO will cause ripples around the world, from defense department spending to the price of fuel here at home.

The major fear, of course, is that recovery from this pandemic will not be widely enjoyed, that it will instead only exacerbate the divisions in our society and widen the gaps between the haves and have-nots. Already those at the bottom of the economic ladder — hourly employees, those without paid sick time or leave time or child care, those who scrape to get by — have shouldered the heaviest load.

We must work to make sure their suffering does not continue. The economic recovery has helped a great many, but it must help lift all boats. If there is to be a guiding economic principle as the coming year unfolds, let it be that.