The first trucks containing the COVID-19, coronavirus vaccine are headed out the door and the first Americans will begin receiving vaccination shots shortly. While the general population‘s health and wellness is top of mind and our greatest concern, the other big question is, will the vaccine give the economy a shot in the arm?
Regardless of your political leanings or beliefs, the development and approval of a vaccine in less than a year is truly an amazing feat. The combination of medical research, genomics studies, biomedical engineering, artificial intelligence and machine learning have brought us a potential solution far more quickly than we would have ever expected. The research community that brought this to our doorstep so quickly deserves our appreciation and pat on the back. It is also a great harbinger of what is coming down the road with other medical and technology advances.
However, it is important to note that the vaccine can only be effective in creating herd immunity and significantly reducing the COVID-19 threat, if people get immunized. A recent study from the Franklin Templeton-Gallup Economics group finds that there are many personal characteristics including age, income, race and political affiliation that portend whether somebody will actually get the vaccine. However, the most significant predictor of someone’s willingness to receive the vaccine is whether they have received a flu shot in the recent past.
Americans in general have been skeptical of vaccines for years. The chart below shows that as the year has progressed, people’s willingness to get the vaccine has continued to decline. We will see if the recent spike in cases will cause people to reassess. It seems that if the initial roll out over the next couple of months goes without much in the way of bad news or critical side effects, and it is proving to be effective in reducing risk of contracting the coronavirus, people would be more willing to take the vaccine. At the end of the day, research suggests that approximately 60% of adults in the United States would accept the vaccine…somewhat similar to the number that receive the flu shot each year.
A second shot in the arm for the US economy could come in the form of an additional stimulus/relief package. This has been promised from lawmakers on Capitol Hill for months. It has been very frustrating to watch our Senate and House of Representatives, on both sides of the aisle, not be able to put their personal agendas and spending wants/wishes aside to help their constituents who are truly in need.
We saw Congress act in record time in March of this year. They passed the $2.2 trillion CARES Act in less than 30 days. This kept the economy from falling into a massive recession as economic shut-downs, quarantining and social distancing requirements were put in place. As we head toward the winter months and many parts of the service economy are facing similar issues and job loss, we certainly hope that Congress steps up to the plate and fulfills their promises to the electorate.
A vaccine and an additional round of stimulus could be the two shots in the arm that help the economy and the US population make the bridge to a hopefully healthier and happier summer of ‘21. It is our hope that by the third quarter of next year, that the economy starts to reopen en masse and life starts to resemble what we knew prior to March of this year.
The team at Impel Wealth will continue to monitor these developments, as well as their impact on your financial future. We take this responsibility seriously as we continue “Moving Life Forward” with our friends and clients.