The economic roller coaster isn’t over — and fashion needs to hold on as tight as possible.
As horrible as the first phase of the coronavirus crisis was, it was relatively straightforward . Almost everybody was forced to shut down and go home, leading a projected contraction of more than 30 percent in second-quarter gross domestic product and an unemployment rate of more than 11 percent.
“Consumers right now, if anything, are awash in cash because they got the stimulus checks and anyone who’s unemployed has gotten extra benefits, so there’s a lot of money kicking around right now,” said Scott Hoyt, senior director of consumer economics at Moody’s Analytics. In the meantime, economists are watching case counts as closely as they watch consumers and factory orders, while Wall Street investors are keyed into Washington in case the lawmakers turn off the spigot.
“I don’t think we’re going back to all the way off to where we where we were in March, where it was a complete shutdown,” Nolte said. “So from that perspective we’ve learned something.” Consumer confidence tanked with the shutdown this spring, but Erik Lundh, senior economist at The Conference Board, noted that while people were feeling “really pessimistic” about their immediate circumstances, they were “optimistic about the future.”
“That supply shock that was initially felt at the beginning of the crisis is going to migrate over to the demand side,” he said. “You’re going to see a situation where consumption doesn’t recover and there’s going to be a lack of income, a lack of consumer confidence that’s really going to manifest itself in the economy later in the year.”
Stronger companies are doing what they can now to stock up on cash and reorient to the new reality while looking for ways to take market share even as the market itself shrinks.
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