Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

How Coronavirus Vaccines Are Likely to Impact the U.S. Economy

By Dana George - Dec 27, 2020 at 6:00AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

While it won't come back at once, economic recovery will be possible because of coronavirus vaccines.

Worker in blue latex gloves dispensing dose of COVID-19 vaccine through syringe.

Image source: Getty Images.

While it doesn't influence our opinions of products, we may receive compensation from partners whose offers appear here. We're on your side, always. See our full advertiser disclosure here.

Optimism was in the air earlier this week as frontline workers began receiving doses of Pfizer's coronavirus vaccine. Equally exciting, Moderna's version of the vaccine is not far behind. For millions of Americans hoping to get back to work or struggling to pay bills, the question is how this vaccine will impact the U.S. economy, and by extension, American families and their bank accounts.

It will ultimately be good news -- but not right away

As of this writing, the United States has recorded more than 17 million cases of COVID-19. And like most viral illnesses, COVID-19 spreads rapidly. Health officials estimate that any American who wants to be vaccinated can be by early summer. In the meantime, however, people will continue to get sick. 

When the pandemic first began, it was easy to believe that it would only hit large metropolitan areas, like New York City or Chicago. According to the CDC, since September, COVID-19 cases have increased sharply in medium/small metro areas and spread into rural communities. By October -- after a drop in the number of new cases -- the number of people contracting the virus in urban areas began to climb again. 

In other words, there is no corner of the country that is safe from COVID-19. Millions of us know people who have become sick or succumbed to the virus. What that means for the immediate future is more of the same: Many of us will continue avoiding movie theaters, airlines, and brick-and-mortar stores. Fewer of us will be eating in restaurants, staying in hotels, or visiting local attractions. 

Even if enough Americans get the vaccine to stop the spread of the virus, it's going to take time for change to occur. 

"Normal" is the goal

Once it became clear that vaccines were in the pipeline and tests were going well, optimism on Wall Street surged. For example, on Nov. 9, the Dow Jones Industrial Average shot up more than 1,550 points, boosting the S&P 500 Index by 3.8%. 

The excitement was less tied to what was happening that day than to the expected results of an effective COVID-19 vaccine. A vaccine represents a return to normality -- hopefully over the next 12 months. It means people going back to businesses that have been just hanging on by their fingertips, watching movies in theaters rather than renting them at home, eating in restaurants, celebrating in bars, filling sports stadiums, and going back to work in offices that have sat empty for most of the year. An effective vaccine means millions of furloughed workers having a job to return to. 

Stuttering back

While it's reasonable to expect economic life in the U.S. to go back to normal, we should not expect it to happen all at once. Like a car on the side of the road, the economy will likely sputter back, with some sectors coming to life faster than others. 

For example, while you may drive by a neighborhood restaurant next summer and see dozens of people dining on the patio, folks may be more careful about attending baseball games with thousands of screaming fans. They may be slower to book a cruise or take a flight until they feel confident that enough of us are vaccinated. 

As confidence in the efficacy of the vaccines grows and the number of new COVID cases flattens, getting back to business as usual may be the way we celebrate. And as companies once again thrive, employers will be in a position to recall laid-off workers. What that means for most Americans is more money to cover bills, save, and invest

COVID-19 vaccines will not just stop the spread of the virus but will also lead to economic recovery. The only question is how long total recovery will take.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/03/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.