The unemployment rate increase was even more strongly mitigated by the CARES act relief package and subsequent PPP loan extensions. This appears likely to continue with the relief package passed late last year and the additional relief currently under consideration. While the public health closures and lingering but more targeted operating restrictions first resulted in an unemployment spike of historic proportions to 14.7 percent in March that remained in double digits through July, employment rapidly recovered some of the lost ground in the second half of the year. That recovery was somewhat distorted by a decline in labor force participation that obscured the full magnitude of the employment toll. Year-end employment impacts from renewed closures and restrictions in some parts of the country due to the largest spike in cases and deaths to date reversed positive trends. Nevertheless, the unemployment rate for the year equaled 8.1 percent, somewhat better than our September forecast, if still a shocking shift from the past decade of declining unemployment. Even with the CARES act, Federal Reserve actions and other governmental support efforts at the federal, state and local levels, inflation rose by somewhat less than we anticipated in September. There is no question that government support prevented what could easily have otherwise been actual deflation. Deflation on at least a temporary basis has actually occurred in certain of the hardest hit sectors. That too may have held down the overall inflation figure. For the year, the CPI rose 1.4 percent. As we noted in September, constraints remain at many businesses, work- from-home arrangements for office staff remain common, travel remains severely depressed and high-attendance sporting and entertainment events remain virtually non- existent. Where mandated restrictions have been removed or significantly reduced, health driven disruptions continue to appear due to repeated instances of viral outbreaks in a variety of locations and circumstances where many people have gathered, including bars and restaurants, social gatherings, certain work places and schools. Mask wearing has taken the place of more significant capacity restrictions. While it is fairly clear that it has had a positive effect in reducing transmission in association with other restrictions and when consistently obeyed, it is equally clear that masks alone do not prevent spread in large gatherings where social distancing is not observed and where usage is not consistent. The arrival of the two currently approved vaccines (soon to be three barring health safety surprises for the Johnson & Johnson version) has provided by far the greatest psychological lift to the nation since the pandemic began. Even with well documented stumbles in the vaccine rollout, the daily increase in people vaccinated is a welcome counterpoint to what had been a continuous litany of more cases and deaths. While the threat of a lack of acceptance has not completely vanished, there also appears to be fairly strong cooperation at the individual level with receiving vaccinations as they become available. It is still too early to be seeing actual public health impacts from the vaccines at the national level, although some local impacts may be appearing already in congregate living locations where vaccines have been administered. Greater positive impacts from the vaccines should begin to appear by mid to late-spring.
∴ GENERAL ECONOMIC CONDITIONS
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