The Economic Perspective: “Recovery in Goods Versus Services”

Mary: This is Mary Walden with economist MW welcoming you to the economic perspective. Today’s program looks at the recovery in goods versus services.  Mike, the coronavirus-induced recession is like no other recession the country has experienced in so many ways.  We saw this difference in how the recession began.  Are we also seeing it in the recovery?

 

Mike:  Summary Answer

  • Typically, recessions hit the goods – or products – part of the economy hardest – people make-do with their homes, vehicles, furniture etc.
  • In contrast, the services sector is less impacted
  • This recession has been the exact opposite – hit services harder than goods
  • Now, as the economy is recovering, we’re seeing this distinction continue
  • Spending on services has improved, but spending on goods has done much better
  • Indeed, spending on durable goods is almost totally back, with expenditures now only 1% under pre-recession levels
  • Big reason – people still concerned about services – face to face contact – but are using funds to improve homes
  • RV spending is through the roof
  • I’m MW

 

Mary:  And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.