The Indicator from Planet Money - Back to Business?

We join Stacey for her first haircut of the year, and discuss the future of the service economy as the end of the Covid-19 pandemic (hopefully!) nears.

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Couple of weeks ago. I got my vaccine.

You are done. So that is it, huh? Wow. That's amazing. The whole thing took less than 10 seconds and it was surreal like just like that. The whole economy is the whole world. Really seems kind of open back up to me. And all of these things started seem possible, all the sudden did not seem possible to 10 seconds before. Like maybe I could stop obsessively Purell and everything, or maybe I could shake somebody's hand or hug, one of my friends or get on an airplane and go see my family or maybe even go abroad.

My gosh, that's my hair salon. I haven't been here for a very long time.

Or you know, get my haircut. So during the whole pandemic, I did not get a haircut hair grows pretty fast and it just got longer and longer and longer after Tangled. Andrew, we is there somebody to take on this life of its own. I felt like it had its own moods, mostly bad moods. It was it was not a good situation. Freddy Ruiz Evans has been cutting my hair for 10 years at this little Salon in Brooklyn called boy, love girl. I usually come to or three months or so when I checked in, she looked up. When my last appointment had been November 17th, 2019. That's the last time I was in here.

Wow, that's a long time. That's so, it's 17 months for the last 17 months actually much at the service economy has been in this kind of suspended, animation restaurants, nail salons, movie theaters, concerts pause Jim's. Now, the people getting tax needed on large-scale and things are opening back up. There is this question hanging over. The economy, will the service economy? Bounce back to where it was before covid-19?

What are you today? Well, you can, you can I don't know release. The Kraken is, it is

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Back in March, when New York went into lockdown boy Luv. Girl salon closed along with businesses across New York and across the country. And basically overnight millions of professionals like we said Evans and all of her colleagues were unemployed wheel of girl opened back up at the very end of June and Lisa says when it opened she would just booked solid at least it was super, super busy for a month and then it just really just dropped off.

So like there'd be some days where I have like one person and then I would just going to go home leases this drought lasted through the summer and fall and she says it was wrong. I mean she was technically back at work but almost no one was coming in. She says a lot of her clients had left New York City and a lot of the clients you stay just did not feel comfortable coming to get an in-person haircut. Even despite the covered bridges, that the salon had put in place, then you're not on unemployment. You're like counting on your income and then you have one client a day like that. Feels like it might be hard. It was a really stressful right now. There is a backlog of demand and some businesses are reporting. That they are flooded with customers more than they can accommodate. After all, there are millions of over do teeth cleanings in eye exams at pedicures haircuts. But once that pent-up demand is finished, there is this question hanging over the economy? Will we spend as much money on Services as we used to will business?

Is like boy, love girl, get the same number of customers. They did before Labor Economist at ZipRecruiter, she says, there is a lot of optimism the economy right now, as more and more people get back scenes offices in school, reopen and people, get back to the routine. There is huge excitement among employers who are finally able to reopen they are listing hiring freezes. They're taking me sir permanent steps now to reopen and to create jobs there are some potential roadblocks for older consumers. A survey from the Federal Reserve Bank of Cleveland found that many older people say they plan to spend less on Services than they did before covid-19.

Before getting a service, another potential issue, substitutions. A lot of people made really big purchases to make up for the services. They were missing and now they might just keep on using those people who invested in Peloton bikes, they now cancel their $200 a month Boutique gym, subscription people who bought beard trimmers and taught their Partners, how to cut their hair. May you continue to do that. I can make people invested in home, entertainment systems and streaming services. They got these big flashy flat screen TVs. And in future, it may just be more convenient to sit on the couch and watch a movie from home, rather than coming out to the movie theater. Still take a while to come back after all hundreds of thousands of businesses, just didn't make it, they close their doors, others, cut back locations or services and let some of their workers go.

It will slow down growth for a lot of businesses and make expanding and adding jobs slower and harder. Still Julia says, there are reasons for optimism for one thing behavioral economics. In this case, she says, the very well recorded. Human trait of You Don't Know What You Got Till It's Gone, But I personally will buy season tickets to the Los Angeles Philharmonic. Orchestra in the past, I often would think about the decision back and forth, you can this really fit in my budget but not as experienced, a world about live music and arts and it's just too ghastly to contemplate. You're a musician or a piece or anything that you are like procedurally. Would love to hear live right now or that you're looking forward to. I want to sit back and just exactly the whole

The bestest Easter and Sons time now craving.

Julie says, there's data showing that many Americans are actually planning to spend more on services and experiences this year than they did before.

All right, how's that feel? Oh my gosh, really good? Yeah, I was like so long overdue. Lisa Evans, my stylist says, she is also feeling hopeful in the last few weeks. A lot of newly vaccinated regulars have made long overdue, visits and business. Maybe much like my hair is starting to seem like it is getting back to normal again.

Thanks Lisa. Walter you really soon. Much sooner this time.

This episode of the indicator was produced by Brittany Cronin and fact-checked by Sams. I the indicator is edited by Kate concannon and is a production of NPR.
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