A world wearied by the First World War and afflicted by the 1918 flu pandemic desperately attempted in 1920 to step past the hardships and losses and try to rebuild lives. There were people hoping for a return to normalcy from Covid-19 Pandemic. Almost every nation today finds itself in a similar role.
Covid-19 Pandemic timeline:
More than eight months and 900,000 deaths into the COVID-19 pandemic, 1 people around the world are longing for an end. There are two major meanings of “end” in our opinion, each with a different timeline.
Epidemiological end point:
One end point will occur when the proportion of society immune to COVID-19 is sufficient to prevent widespread, ongoing transmission. Many countries are hoping that a vaccine will do the bulk of the work needed to achieve herd immunity.
When this end point is reached, the public-health-emergency interventions deployed in 2020 will no longer be needed. While regular revaccinations may be needed, perhaps similar to annual flu shots, the threat of widespread transmission will be gone.
Transition to Normalcy:
A second (and likely, earlier) end point will occur when almost all aspects of social and economic life can resume without fear of ongoing mortality (when a mortality rate is no longer higher than a country’s historical average) or long-term health consequences related to COVID-19.
The process will be enabled by tools such as vaccination of the highest-risk populations; rapid, accurate testing; improved therapeutics; and continued strengthening of public-health responses.
The next normal won’t look exactly like the old it might be different in surprising ways, with unexpected contours, and getting there will be gradual, but the transition will it enables several familiar scenes to resume, likes of air travel, grocery stores, warehouses, restaurants, gyms etc.
The two ends are related, naturally, but not linearly. At the most recent, the transition to normal will come when herd immunity is attained. But in regions with strong public-health responses, normalcy will arrive significantly before the epidemiological finish of this pandemic.
Pfizer Covid-19 Vaccine:
The world is becoming hopeful that the end of the global COVID-19 pandemic is near as Pfizer has announced a successful Phase 3 trial for its vaccine.
Despite the complex storage requirements, the vaccine is simple to manufacture and large-scale production is expected to start soon. Global markets clearly had a sigh of relief, resulting in huge moves in equities, fixed income and gold on November the 9th.
A number of new secular trends emerged from this pandemic, such as working from home, cooking at home and DIY to name a few. An observation can also be made about the increased savings rate that skyrocketed to 25% in Q1 2020 in the U.S. Savings rate, an important factor from a macroeconomics perspective, as increased savings by the individuals translate into less retail spending.
The projection by Rosenberg Research is that equilibrium long-term savings rate will stabilize at around 9% (up from 7.2%), decreasing consumers’ contribution to GDP growth from 1.9% to 0.9%.