As we begin the new year, it is a good time to take a high-level look at where the economy is right now and where it may be going the rest of the year.
The good news: The economy will pick up steam as the year goes on. The virus is still in control of the economy, constraining its growth as cases remain high. As vaccinations drive down caseloads, economic activity will improve.
The big boost to growth will come when we can gather in larger numbers without fear of contracting Covid-19. Once that occurs businesses such as restaurants, bars, live sports, theaters, events, conventions, theme parks, travel, tourism, film production, and more can resume more completely. Perhaps most importantly, schools should be able to reopen fully, and parents that have been driven from the workforce can re-enter it.
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In the meantime: The economy was clearly slowing at the end of 2020. Several key data points showed the pullback. Income and consumption fell in December. Consumer sentiment dropped sharply. In November, small business optimism declined, as did the outlook of the manufacturing and service sectors. Most troubling was a 1.1% fall in retail sales in November, leading up to the all-important holiday shopping season. Retail sales are still above their pre-pandemic high, but the big drop in November coming off a small decline in October is concerning.
This slower growth is likely to continue into early 2021. The recently passed relief bill with $600 per person payments, already arriving in many peoples’ accounts, should buoy spending this month, though. The resumption of the PPP program will help, too.
Looking ahead: We will get the initial reading on how fast the economy grew in the fourth quarter of 2020 on January 28th. Estimates show it growing over 5%. It grew more than 33% in the third quarter, coming off the 31% contraction in the second quarter.
As of now, the economy is on track to grow more than 4% in 2021. At this pace, it should return to its pre-pandemic size by next quarter. That would be a quick bounce back.
Bottom line: If we can kick the virus sooner in the year, growth will exceed current estimates. We cannot get the vaccinations fast enough when it comes to restoring economic health.
—Curtis Dubay, Senior Economist, U.S. Chamber of Commerce
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BALANCING TEXAS' BUDGET IS ALWAYS COMPLICATED. THE PANDEMIC AND RECESSION WILL MAKE IT EVEN HARDER IN 2021 |
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The Texas legislative session begins on January 12 and Texans are waiting on state leaders to flesh out their agendas. Lawmakers are also figuring out how to safely convene during the coronavirus pandemic. Lt. Governor Dan Patrick has suggested there could be an announcement about pandemic protocols next week, and Governor Greg Abbott is expected to give more details about his legislative agenda once the new year begins.
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PANDEMIC RELIEF INFORMATION AND RESOURCES |
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Guide to Small Business COVID-19 Emergency Loans
Click here to view the U.S. Chamber's new Guide to Small Business COVID-19 Emergency Loans with the latest information and answers to FAQs about the changes that have been made to the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loans (EIDL) Program as part of the end-of-year pandemic relief package Congress has passed. We encourage you to share this resource with your members and networks as you see fit and will continue to make updates as more information becomes available.
Summary of 501(c)(6) Eligibility in Pandemic Relief Package Expansion of PPP
Click here to view the U.S. Chamber's summary of the extension of the Paycheck Protection Program (PPP) in the Pandemic Relief Package as it pertains to the eligibility of 501(c)(6) organizations.
CO— Pandemic Relief Small Business Update (12/22) Recording
On December 22, 2020, the U.S. Chamber's CO— hosted a Pandemic Relief Small Business Update during which executive vice president and chief policy officer Neil Bradley shared more about what the new stimulus bill will mean for the small business community. If you weren't able to join the program, or would like to watch it again, please click here to view the recording.
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U.S. CHAMBER COVID-19 VACCINES FAQ |
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As you know, the U.S. Food and Drug Administration (FDA) recently granted emergency use authorization for COVID-19 vaccines developed by Pfizer and Moderna. As states begin to prioritize, allocate, and distribute the first doses, the U.S. Chamber has created a new COVID-19 Vaccines FAQ one-pager to answer the common questions being asked by Americans—and especially business leaders.
Click here to view the one-pager with accurate and current information about the vaccine allocation process, expected timelines, and what it all means for the road to recovery. The U.S. Chamber will continue to update this resource as new information becomes available.
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CONNECT ABILENE COMMUNITY SURVEY |
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The City of Abilene is currently updating its Comprehensive Plan. This document helps the City set priorities for infrastructure and other improvements over the next 5 to 10 years. Help us make Abilene an even better place to live, work, and play. As a concerned citizen, the City takes your views very seriously. Please take some time to answer this survey and help guide future decisions. Your answers will remain anonymous. The survey will take approximately 20 minutes.
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WHAT WE'RE READING
Agricultural Survey
Bankers responding to the fourth-quarter survey reported overall weaker conditions across most regions of the Eleventh District. They pointed to extreme drought conditions that made a hard year even harder, with crop yields below average in some regions. Cattle seem to be doing well despite dry conditions. Some contacts noted government aid such as the Coronavirus Food Assistance Program has helped producers make their loan payments on time. Demand for agricultural land in some areas continues; however, bankers indicated the land is not for production agriculture but for investment and residential development.
Expansion in Texas factory activity picked up in December, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rebounded from 7.2 to 25.5, indicating an acceleration in output growth.
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You don't want to miss these upcoming event for
your business.
JAN 7 A DEEP DIVE INTO THE RECENT COVID-19 RELIEF PACKAGE Join the U.S. Travel government relations team for an in-depth overview of the COVID-19 Emergency Relief Package and the components of the legislation that have important impacts on travel businesses. Learn how to access relief, when funds will be made available and other considerations to be aware of as you navigate the process to secure funding for your organization. The webinar will allow for plenty of time for Q&A from participants. Register here.
JAN 13 INTRODUCTION TO GOVERNMENT CONTRACTING The Federal Government spends over half of a trillion dollars on goods and services each year. States and local governments spend 1.5 trillion dollars on goods and services cumulatively each year. This webinar covers the basics of doing business in the public sector at all levels. Register here.
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