When choosing capital projects, businesses in the past could mostly look through short-run fluctuations in oil and natural gas prices, with an anticipation that moderate prices would prevail over the longer haul. The recent shift in expectations, however, has been substantial enough and persistent enough to direct business-investment decisions in favor of energy-cost reduction.
Although I expect employment to rise significantly in coming months, the picture is more mixed for the labor market than it is for spending. The unemployment rate remains at 6.1 percent, compared with 3.5 percent pre-COVID-19, and there are 8 million fewer jobs. Despite recent gains amid reopenings, employment in the travel, leisure, and food services sectors remains well below pre-pandemic levels.