For anyone who believes “everything has changed” since the advent of the Covid-19 pandemic, measurable economic data is confounding. What we can measure is equally confounding. The Institute for Supply Management non-manufacturing index already has shown a sharp “V” recovery, far more sudden than the recovery from the Great Recession of 2008.
The index is a monthly composite index based on surveys of 300 purchasing managers throughout the United States in 20 industries in the non-manufacturing area. The index is released on the first business day of the month and covers the previous month’s data, which makes it particularly timely. If the index is above 50, it indicates that the economy is expanding. Values below 50 indicate a contraction.
Within the overall index, there are nine subindices: new orders, production, supplier delivery times, backlogs, inventories, prices, employment, export orders, and import orders. The index is believed to reflect future movements in gross domestic product,
However haltingly, the index suggests the non-manufacturing part of the U.S. economy is rebounding sharply from its March plunge. That might indicate that “some things could change,” but likely not that “everything” will change.
Similarly, about 80 percent of respondents say they are growing again after the Covid-19 economic shutdown. That is likely unprecedented in the modern era.
Employment, as much of the retail, hospitality and transportation sectors of the economy remain closed or operating at a fraction of former capacity, has yet to return to “normal” levels. But job losses in the wake of the internet bubble burst of 2001 and the Great Recession of 2008 also suggest that normalization will happen.
That is not to deny an acceleration of trends already underway prior to the pandemic striking. It is a caution that the amount of permanent change we see in daily life, schooling and work might not be anywhere near as great as many suggest.
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