WASHINGTON — Unemployment numbers released in October show a still struggling United States economy from the pandemic. But, the stock market isn’t in the tank. It has led economists to describe the pandemic recovery as “K” shaped.
During the first presidential debate, you may have heard the term “K-shaped” recovery to describe the country’s economic situation. That term became a top web search that night.
Question:
What is a “K-shaped” recovery?
Answer:
An economic recovery where one half of the economy comes back and the other half continues to go down.
Our Sources:
Tulane University Economic and Stock Market Expert Peter Ricchiuti and the United States Chamber of Commerce.
Process:
First, you have to understand the shapes of economic recovery. Initially, some experts believed the pandemic would have a “V-shaped” recovery. That is a recovery where the economy goes down, then it bounces back.
Other economists believed it would be a “W-shaped” recovery. Basically, the economy goes down, it bounces back, the economy goes down again and bounce back again.
“There’s nothing diabolical about the 'K-shaped' recovery,” Ricchiuti explained. “[Half of the economy recovers] while the rest of the economy, the rest of the people just keep going down even more after all these events.”
According to the U.S. Chamber of Commerce, in this recovery the tech industry and software are going up, but on the other side, food service, entertainment and a host of other industries are still going down.
“If the market keeps going up, I mean, that gap is gonna widen even more,” Ricchiuti said.