Mohamed A. El-Erian , Columnist

Don’t Let Covid’s Economic Surprise Eclipse Inequality

The shock hasn’t been as great as expected, but not everyone is recovering equally.

March 15, 2021 at 9:30 AM UTC

Mohamed A. El-Erian is a Bloomberg Opinion columnist. A former chief executive officer of Pimco, he is president of Queens’ College, Cambridge; chief economic adviser at Allianz SE; and chair of Gramercy Fund Management. He is author of “The Only Game in Town.”

The recovery has been uneven.
Photographer: Frederic J. Brown/AFP/Getty Images

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A year has passed since the U.S. economy was the victim of a dramatic sudden stop at the hands of the Covid-19 virus. What has transpired since, especially when compared with early consensus expectations, tells us a lot about both the inherent strength of the economy and its Achilles’ heel.

A virtual shutdown during the second quarter of 2020 caused drastic dislocations to every aspect of American society. The impact on the economy was astoundingly bad. Gross domestic product collapsed, contracting 31%; unemployment shot up to more than 14%; and retail sales also fell sharply, by 15%, despite a huge shift from physical to online consumption.