Economist Lindsey Piegza to break down COVID-19 impacts in SENA Reconnect keynote
Stifel Financial Corp. Senior Economist Lindsey Piegza thinks USD 10 trillion (EUR 8.4 trillion) might just be enough stimulus to get the global economy through the COVID-19 pandemic.
That’s the figure Piezga estimates the collective government response has been globally to the crisis. And while the total amount spent thus far is staggering, the United States and many other Western governments are still in recession and there are many problems money alone cannot solve, Piezga told SeafoodSource.
“While the world’s governments have taken positive steps, there is still a long way to go in 2021 before we can call anything a recovery,” Piegza said. “The economy is still very much reliant on help from the federal government and Federal Reserve. We’re halfway to organic growth levels but we’re still a ways out, and the remaining journey could still be increasingly bumpy, volatile, and much longer than the market anticipates.”
Reprising her 2019 role, Piegza will once again deliver the keynote address at the 2021 Seafood Expo North America conference program, taking place 15 to 19 March. SENA Reconnect features an online digital conference program that provides seafood buyers, suppliers and stakeholders a platform for in depth industry content, emerging trends, and networking. Piegza will look at the current state of the economy amid the ongoing pandemic and what it means going forward for overall growth, interest rates, and policy. She will cover macro-economic trends in consumer spending and investment, in addition to new monetary and fiscal policy initiatives and the potential economic effects of these changes. She will also examine the changing global and political environment, and how it will affect the economic recovery.
“My goal is to provide a 10,000-foot overview, not focusing too much on the specifics of the pandemic itself, but instead the impacts of the policies stemming from efforts to stop the spread of the virus and stimulate the economy, and how they continue to have impacts on various sectors of the economy, including the seafood industry,” Piegza said. “I’ll be looking into what the consequences will be for the economy going forward after being forced into recession after more than 10 years of expansion, which was the longest period of uninterrupted growth in U.S. history.”
The economic impact of COVID-19 has been uneven across the country and the globe, and targeting assistance to the most-affected sectors of the economy has not been an easy task according to Piegza. That said, the U.S. and global economies “are on the path to recovery” with the recapturing or recreating of millions of jobs over the past eight to 10 months and a correlated uptick of manufacturing and consumer activity, but “we still have a ways to go to achieve pre-virus levels,” Piegza said.
“We still have millions of Americans out of work – there are still five million Americans dependent on unemployment – and tens of thousands of businesses closed down or under the extreme threat of permanent closure by the end of 2021,” she said.
Piegza said estimates the economy will be back to normal by July are “extremely optimistic,” even with U.S. President Joe Biden’s declaration that all Americans who want a vaccine can get one by May. One major problem looming over economic forecasts is the 30 to 50 percent of the U.S. population that says it is hesitant about getting vaccinated.
“That alone will delay some of those more optimistic timelines,” Piegza said.
Lingering public concerns over gathering in crowded areas will result in delays in the economic recovery in the United States, and the government’s repeated extension of unemployment benefits and its provision of stimulus checks are incentivizing workers to remain at home and outside the workforce, Piegza said. But those issues will eventually easy over time. However, other shifts caused by the coronavirus pandemic are likely to result in permanent structural changes in the preferences of U.S. consumers. As an example, Piegza listed the pick-up of real estate markets in desirable, non-urban communities across the U.S.
“A lot of workers now prefer to work from home and many businesses have announced plans to allow their employees to work from their desired location,” she said. “We’re already seeing massive immigration flows from San Francisco, Los Angeles, Chicago, and New York.”
Piegza said she sees two major threats to the ongoing recovery. On the health side, new COVID-19 variants popping up around the globe could damage the efficacy rates of the currently available vaccine formulas.
“We need to maintain a higher level of continued vigilance on virus control,” Piegza said. “We can’t let let our guard down or allow officials to put us right back in the position of a shut-down economy.”
The second threat, according to Piegza, is the “seemingly unending appetite for government control of market activity.”
“It’s a slippery slope as the government continues to introduce more market control. It’s hard to claw that back,” she said. “There’s a higher risk this year as people become increasingly dependent on federal support programs. In the near term, it certainly can be argued that it’s necessary to supplement lost wages and work opportunities. But it’s going to have significant long-term and lasting consequences, not only from an inflation standpoint, where the average American will not be able to buy as many goods and services, but it could undermine the country’s long-term future growth potential as we do take on trillions upon trillions upon trillions of new debt.”
Piezga said her talk will also touch upon specific issues related to the seafood, foodservice, and retail sectors, but that even for the average seafood-industry employee, her overview of current and near-future economic conditions will be accessible and beneficial.
“It’s important to understand the general health of the economy and what we can expect of broader trends, from consumption, to hiring, to business investment, to disruptions, to supply chains, to new opportunities as Americans locate outside of urban centers,” she said. “All of this will affect people’s appetite for seafood and where consumers are going to be purchasing seafood, and how much seafood they’re going to purchase. Both in the U.S. and internationally, these impacts will trickle down to every aspect of the business world, and that includes the seafood industry.”
Photo courtesy of Lindsey Piegza