Our k-shaped recovery

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Good afternoon,

A debate going on as to whether the U.S. is in a K or V-shaped recovery as coronavirus hangs around and gets worse in some areas.

Delaware is seeing more cases, but nothing compared to the recent numbers we’re seeing out of the Dakotas and Wisconsin.

The Trump administration and fellow Republicans now see a  V-shaped recovery with Democratic challenger Joe Biden in the K camp.

The U.S. Chamber of Commerce, which would normally reside in the Republican camp, also sees a K pattern, according to a piece from Chamber  President Suzanne Clark.

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It’s easy to explain the V – a sharp downturn followed by an equally dramatic upturn. The K-shaped recovery is made up of winners taking the V path and other key sectors scraping along the bottom.

The winners – technology and retail with the losers in the travel and hospitality industries. You can also throw in the stock market as a V as investors buy up tech stocks while placing  bets on a recovery in troubled sectors. 

The K pattern is bad news for Delaware. Prior to the pandemic, sluggish job growth in a number of sectors was offset by gains in the hospitality industry.  Recent Delaware unemployment figures show hospitality’s job losses are far greater than in any other category.

It comes as no surprise that Clark calls for a federal stimulus package targeted at industries not seeing a recovery.

Support is growing for an aid package for the airline industry, which is operating at a fraction of capacity. In Philadelphia alone, American Airlines is poised to lay off 700 flight attendants.

The pain extends to restaurants and hotels as travelers and office workers stay home.

A  piecemeal approach will not work as long as we remain in a K mode.

State programs like  DE Relief Grant will help. But a  long-term approach is needed, even if it comes  too late for some. – Doug Rainey, chief content officer.

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