Who the K-shaped recovery leaves behind

The idea of ​​a K-shaped economic recovery – a staple of media coverage and commentary in the United States since late last year – is a relatively new concept.

Following previous recessions, economists have generally described recoveries as either V-shaped, meaning growth picked up quickly, or U-shaped, meaning output remained weak for a longer period of time. long time before rebounding.

The K-shaped recovery is a shortcut for an economy in a pandemic age in which Americans’ financial fates have diverged. Many people in white-collar jobs have fared rather well thanks to government stimulus payments, increased savings, and exploding prices for many assets, including homes, while many people in service sector jobs suffered.

The uneven recovery in the United States is likely to have important implications for banks and other lenders. For example, while many tenants suffer, lenders to small landlords prepared for losses During months.

The slides that follow illustrate various ways the pandemic has exacerbated existing economic inequalities. Small business owners in minority communities, low-income minority families, and people with below-average credit scores are among those who have suffered the most economic damage from COVID-19.

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