MORGANTOWN — West Virginia’s economy is well on its way toward recovering from the impact of the COVID-19 pandemic, according to West Virginia University’s Dr. John Deskins.
Deskins, director of the Bureau of Business & Economic Research in WVU’s College of Business and Economics, said the recovery process really began last spring after the state’s “stay at home” orders were lifted and most businesses reopened.
“Originally, during the real crash, we lost 94,000 jobs, but by the end of the summer, we had gained back about 57,000 of the jobs,” he said. “So the early bounce-back was better than I thought. I was kind of impressed with those early numbers.”
However, job growth slowed during the third quarter of 2020, Deskins said.
“It was rough — we actually just stayed flat during the third quarter,” he said. “So we had this strong recovery, but then kind of a return to flatness over the fall.”
Now West Virginia is starting to regain jobs, Deskins said.
“I’m pretty optimistic about how long it’s going to take us to fill in those remaining 30,000 jobs that we need to fill to get back to where we were in January of last year,” he said.
Last year, he and his colleagues at the Bureau of Business & Economic Research presented two possible models of how the pandemic could impact West Virginia’s economy — one that was optimistic and one that was pessimistic, Deskins said.
“Honestly, my colleagues and I have thrown out the pessimistic forecast,” he said.
“The pessimistic forecast was really reflective of our concerns of a double-dip recession. It was there to account for the possibility that there could be another huge wave last fall or last winter that would lead to more downturns in the economy and could go back into a second dip,” Deskins said.
That worst-case scenario for the state’s economy is “history now,” he said.
“With the vaccine rollout, with the fact that more than 30% of Americans are fully vaccinated now, we think we’re doing better than we expected,” he said. “So a baseline forecast calls for a return to early 2020, a return to the pre-pandemic level of employment, in early next year. And we still kind of stand by that in some sense, but I’m becoming more and more optimistic that it may be possible for us to reach that pre-pandemic employment level by the fourth quarter of this year.”
The pandemic will ultimately change many things about society, such as how and where we work, but its economic effects are not expected to be long-lasting, Deskins said.
“There’s going to be permanent changes. I think we’re going to have more Zoom meetings permanently, and I think that’s a good thing. I want some in-person meetings, but I think a hybrid approach is really the best of both worlds,” he said.
“So I think there will be lots of changes in terms of our life, but in terms of the economy and the basic statistics, we’re going to talk about 2020 and tell our grandkids about it. But I think the kind of broad economic trends will get back to normal,” he said.
Early in the pandemic, economists attempted to determine what economic recovery would look like on a graph, speculating whether recovery would be “v-shaped” or “k-shaped.”
All signs indicate recovery has been “v-shaped,” meaning a sharp decline followed by a rapid rise, Deskins said.
“You’re never going to have a ‘v’ that’s perfectly symmetrical, but it’s a ‘v-shaped’ recovery,” he said. “The right side of the ‘v’ does have a little flat spell, where the third quarter was flat, but if you have to pick a letter, ‘v’ is the closest letter. It’s certainly not an ‘l;’ it’s not a Nike swoosh; it’s not a ‘w.’”
The state’s seasonally adjusted unemployment rate dropped a tenth of a percentage point to 5.8% in April, according to WorkForce West Virginia’s most recent jobs report.
The number of unemployed state residents decreased by 1,500 to 45,800. Total employment was up 1,700 over the month. The national unemployment rate increased one-tenth of a percentage point to 6.1% in April.
In West Virginia, total nonfarm payroll employment increased 3,200 in April, with gains of 1,700 in the service-providing sector and 1,500 in the goods-producing sector.
Within the goods-producing sector, employment increased by 1,100 in mining and logging and 600 in manufacturing.
Employment decreased by 200 in construction. Within the service-providing sector, employment gains included 1,400 in leisure and hospitality, 400 in other services, 300 in financial activities and 100 in professional and business services.
Employment declines included 400 in trade, transportation, and utilities and 100 in education and health services. Employment remained unchanged in both government and information.
Since April 2020, total nonfarm payroll employment has increased 67,600. Employment increases included 27,500 in leisure and hospitality, 11,700 in trade, transportation, and utilities, 7,800 in education and health services, 4,100 in professional and business services, 4,000 in construction, 3,600 in government, 3,200 in other services, 3,100 in mining and logging, 2,000 in manufacturing, 500 in financial activities and 100 in information.
West Virginia’s not seasonally adjusted unemployment rate decreased four-tenths of a percentage point to 5.7% in April 2021.
Steve Roberts, president of the West Virginia Chamber of Commerce, said the latest jobs report shows an economy “roaring back” from the impact of the pandemic.
“April 2020 was the first month that the COVID-19 pandemic’s effects showed up in employment data, so while April 2021 is fantastic compared to April 2020, it’s important to compare this month to April 2019,” Roberts said. “2019 was the year that West Virginia was approaching record employment levels, so returning to 2019 levels of employment has been a key in our recovery. As it stands now, we have almost accomplished that.”
Senior Staff Writer Charles Young can be reached at 304-626-1447 or email@example.com