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  • Writer's pictureHarry N. Stout

100- The Pandemic Economy

Updated: Jan 15, 2021

What will the economy look like after it emerges from the pandemic? How will it impact you and your decisions about money? What about your job prospects? Will the economy fully recover to be what it used to be? The answers to these questions are what we would all like to know. I thought I would try to begin framing what the next two years might look like for us and how it could potentially impact our money habits. Again these are my thoughts and are meant to help spur your thinking about money management.

A Vaccine

The wild card in dealing with the pandemic is the invention of a vaccine. If scientists are able to discover a vaccine that works, which I hope they do, it will work to bring our economy back to where it was but with changes. Until a vaccine is developed, we will be faced with recurring outbreaks of the virus and the specter of more lockdowns. I believe a vaccine will be developed. But even with this development, there are still the significant issues of manufacturing billions of doses, deciding the order of who gets the vaccine first, cost, availability and the implications of the anti-vaccination movement. If a vaccination is developed by year-end 2020, it will take time to roll it out. In the meantime, I believe people will be cautious in their desire to get out, travel and resume what was their pre-pandemic routines.

The Job Shakeout

There is no doubt in my mind that we are going to see major change to many industries and companies as a result of the pandemic. From retail companies (think Penny’s, Macy’s, Nordstrom’s), hotels, the airlines and entertainment destinations around the country — the pandemic has exposed financially weak operators to business models that will need to radically change. Over the next two years, I see significant layoffs from these businesses as people cautiously resume their lives. There will also be new jobs created in everything from gaming, on-line retail, telehealth to education. At the end of the day, however, I think we will lose more jobs than we create over the next two years.

The Need for Retraining

The significant job loss and new job creation will point out the need for all of us to be prepared to be retrained for the post-pandemic world of work. Training in working from home, new computer skills and in the use of new technologies will need to be completed by millions of people. If we are lucky, a bring back manufacturing to America or a government- led effort to rebuild our crumbling infrastructure will create needed jobs for the non-college educated cohort of our population.

Interest Rates and Stock Market Returns

With regard to relative level of interest rates, think lower for longer and longer. I don’t see any major reason why interest rates will increase in the next 24 months. This will disadvantage savers and benefit those who are able to refinance mortgages, student loans and personal debts. As I am not an investment professional, I can only conjecture that equity market returns will be subdued in the mid-single digits.

Actions People Will Likely Take

So what can we do about our money in this type of near term environment? Here are my top actions you can consider:

  1. Plan to conserve as much cash as you can to deal with the uncertain environment. This includes making sure you emergency fund is full of at least 6 months of living expenses.

  2. Pay strict attention to your spending and limit your outlays to what you need versus what you want.

  3. Work to reduce your debt levels by paying off amounts or refinancing after you have fully fed your emergency fund.

  4. Invest to make sure your job skills are as current as possible so that you can qualify for new positions if your job is eliminated or weekly hours reduced.

  5. Consider developing a side gig to bring in a new source of cash income.


The next 24 months will be very interesting. We either find a way to live with the virus or the virus will dictate the constraints under how we live. My hope is that our medical and scientific communities find the vaccine and we map a better future for us all.


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