The Economy Is (Almost) Back. It Will Look Different Than It Used To.


The recovery is profoundly unequal across sectors, unbalanced in ways that have big implications for businesses and workers.

There have been a lot of strange economic numbers over the last 14 months, as the world has been whipsawed by the pandemic. But one particular line of the first-quarter G.D.P. numbers released Thursday stands out even so.

Americans’ spending on durable goods — cars and furniture and other goods meant to last for a long time — rose at a stunning 41.4 percent annual rate in the first three months of the year. Enjoy your Pelotons and Big Green Eggs, everybody.

That speaks to a central reality of the economy in 2021. It is profoundly unequal across sectors, unbalanced in ways that have enormous long-term implications for businesses and workers.

The economy is recovering rapidly, and is on track to soon reach the levels of overall G.D.P. that would have been expected before anyone had heard of Covid-19. But that masks some extreme shifts in composition of what the United States is producing. That matters both for the businesses on the losing end of those shifts and their workers, who may need to find their way into the growing sectors.

In such a tumultuous time, it helps to look at the G.D.P. numbers not in terms of how they changed compared with last quarter or last year, but with the prepandemic economy. How does the actual number in the first quarter compare with what that number would have been if it had grown at a steady 2 percent annual rate since the end of 2019, the last quarter unaffected by the pandemic.

This approach confirms the basic idea that the economy is not far from that prepandemic trend line. In the first quarter, overall G.D.P. was only 3.3 percent below where it would have been in that hypothetical pandemic-free world. The United States is on track to surge above that 2019 trend in the second quarter currently underway.

But as the extreme spike in first-quarter numbers reflects, there has been a huge reallocation of economic activity toward durable goods. Spending on cars and trucks