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Post: : Two years of COVID-19: How the pandemic changed the way we shop, work, invest and get medical care

It was two years ago Friday that the World Health Organization officially declared the then-rapidly spreading coronavirus outbreak a pandemic. Many of us waved goodbye to co-workers as we headed home for what was supposed to be a two- or three-week stint in mid-March 2020. 

But, from that point on, COVID-19, the name given in February 2020 to the disease caused by the novel coronavirus, turned our worlds upside down. Millions of people globally got sick, and more than 1 million died in the U.S. alone. Jobs were lost, and the government sent out unprecedented stimulus checks as a lifeline. Restaurants, salons, gyms and beloved local businesses closed, many for good.

“Zoom” became a verb, and face masks became everyday accessories. We started paying attention to how clinical trials work and talked about “pods” and “social distancing.” People waited in line for hours to get tested for COVID-19 every time there was a new wave of infections. And priorities shifted — for corporations, investors, lawmakers and everyday Americans — even after vaccines, tests and treatments allowed cities and states to start reopening. 

The writers and editors at MarketWatch took a look at all the ways the first two years of the pandemic reshaped how we spend our money and our time and the questions we still have going into Year 3.

Meme stocks are, in essence, a child of the pandemic. 

Decades of low interest rates fueling an unprecedented market run might have been the foundation, but it took a new coronavirus stopping the world on a dime to cause extremely bored and suddenly cash-liquid, everyday people aided by direct checks from the Federal Reserve look at zero-commission trading apps like Robinhood Markets Inc.

on their phones and think, “I want a piece of that.”

As the pandemic wore on the collective psyche, and American people openly debated a second Trump term in the White House while massive protests over racial and social inequalities, some of them taking destructive turns, gripped American cities in the summer of 2020, a new and growing class of retail investors planned their attack on the Wall Street establishment. This ultimately led to the January 2021 short squeeze in brand-name stocks like GameStop Corp.

and AMC Entertainment Holdings Inc.

and announced the arrival of the meme-stock movement.

The number of active retail investors has shrunk considerably since the world has started to reopen. But what they did provoked a deeper discussion about stock-market structure that will endure beyond the pandemic. — Thornton McEnery

Used cars are one of the pandemic’s hottest commodities.

After being cooped up in their homes through the spring of 2020 and newly wary of public transportation, taxis and ride hailing as potential virus vectors, a lot of people concluded they needed, or at least wanted, a car of their own. Some, able to work remotely, moved away from urban areas and their many transit options, and that, too, created new demand for cars.

But the surge in demand, combined with automobile-factory shutdowns and chips and parts shortages squeezing new-car inventories, created a very competitive used-car market. Prices soared. 

According to the consumer price index for February, released Thursday, the cost of used cars and trucks was up 41.2% from February 2021. This has been a key factor as the U.S. inflation rate has notched four-decade highs in recent months. Prices may soon drop, but that may depend on whether new-car inventories increase. — Claudia Assis

More people became pet parents — and will keep spending money on their fur babies.

Sheltering in place allowed many people who would normally be away at work all day to finally bring a shelter animal home. Animal adoptions soared across the globe during the early COVID-19 shutdowns. It’s estimated that 11 million pets found new homes during the pandemic. 

“People are home for COVID, they’re a little depressed, and they want that bundle of joy,” Petco Health & Wellness Co. Inc.

CEO Ron Coughlin told MarketWatch in January 2021, shortly after the company went public. Online pet-care marketplace Rover Group Inc.

also went public during the pandemic, making its debut in August 2021. And online pet-products shop Chewy Inc.

gained 5.7 million new customers in 2020 alone, benefiting from the $5 billion increase in online pet spending that year.

And while there have been reports of people surrendering their pandemic puppies and kittens back to shelters, Wells Fargo said pet returns in January and February 2021 were down 24% from the year-earlier months. Many of these new pets and fosters became permanent members of the family. And consumers dote on their animals: Americans fork over a collective $100 billion on pets each year, even if it means making sacrifices themselves.  

Pets are usually recession-proof, and we will soon find out if they’re inflation-proof, too. “Cutting back on pets is one of the last things people will do,” the Petco chief said last year. — Nicole Lyn Pesce

Social distancing helped sell the idea of contactless payments to Americans.

The pandemic arrived, and suddenly contactless payments became all the more appealing: Instead of handing cash to a cashier or touching buttons on a ticketing machine, shoppers could tap their phones or cards against a terminal and avoid that extra interaction.

Contactless payments now account for nearly 20% of face-to-face Visa Inc.

transactions in the U.S., up from low-single-digit penetration when the pandemic began. Thanks to growing merchant acceptance, a surge in recently issued tap-enabled cards, and changing behaviors born of the COVID-19 crisis. Globally, contactless payments are even more common, making up half of Mastercard Inc.’s

in-person transactions in the latest quarter, up from about one-third prior to the pandemic.

Tap payments have become a popular cash substitute when it comes to small-ticket transactions like the purchase of a cup of coffee, and financial-technology companies have worked with cities to enable contactless payments at mass-transit terminals. Transit is “one of the best ways to habituate people to tapping,” Visa Chief Product Officer Jack Forestell said at a recent investor conference.

As offices reopen, more lapsed commuters are likely to become acquainted with the technology. — Emily Bary 

Many of us found an escape in videogames.

Billions (yes, billions) of people worldwide turned to the charming “Animal Crossing” and other videogames to escape the stress and monotony of the lockdowns, creating a huge boost in demand for the videogame industry.

Consoles like Nintendo Co.’s

Switch were scarce, while the releases of Microsoft Corp.’s

new Xbox and Sony Corp.’s

PlayStation 5 had to deal with pent-up demand in addition to a global chip shortage brought on by pandemic-related supply-chain issues. All in all, the pandemic drove a 24% surge in global videogame revenue to $227 billion in 2020 from both hardcore gamers and newbies alike. In the meantime, companies like Roblox Corp.
AppLovin Inc.

and Playtika Holding Corp.

used the time to go public.

Already this year we’ve seen a frenzy of M&A starting with Take-Two Interactive Inc.’s

$12.7 billion offer to buy Zynga Inc.
followed up by Microsoft’s surprise $69 billion offer for Activision Blizzard Inc.
Sony’s $3.6 billion offer to acquire publisher of the “Destiny” franchise Bungie, and Playtika’s announcement that it’s considering a sale of the $7 billion company.

But it won’t be all “Animal Crossing” parties in 2022; the pandemic boom in videogames is forecast to evaporate this year. — Wallace Witkowski

We all became armchair epidemiologists.

Infectious-disease doctors, epidemiologists like Michael Osterholm and immunologists including Anthony Fauci became media superstars, educating us on the nightly news and on Twitter about R0 (the contagiousness of a disease), clinical-trial terminology and herd immunity. Moderna Inc.

and Pfizer Inc.

became household names. We talked about “flattening the curve,” vaccine effectiveness and breakthrough cases. 

That doesn’t mean this newfound knowledge doesn’t have its own challenges. Debates about science and the risks associated with COVID-19, vaccines and treatments (authorized, approved or otherwise) have become at times tense, inaccurate and politicized. Misinformation and disinformation are prevalent, the nation’s vaccination campaign has stalled, and the surgeon general is now studying the phenomenon of health misinformation

As the U.S. moves closer to what feels like an endemic phase of the pandemic, this raises questions about how we address health misinformation going forward. — Jaimy Lee

Companies thank their workers — for now.

Some of the largest employers in the U.S., including Amazon Inc.

and Walmart Inc.
have changed their attitudes toward their workforces, which some have started describing in their annual reports as “human capital.”

Amazon, which has been accused in the past of mistreating employees, said in its latest annual report that it “strives to be Earth’s best employer.” The e-commerce giant had 1.6 million employees at the end of 2021.

Andy Jassy, who became Amazon’s CEO last summer, told investors that his “retail teammates” have operated in “peak mode for almost two years.” In Amazon’s annual report in pre-pandemic 2019, when Jeff Bezos was still CEO, there was no mention of the company’s aspiration of being seen as a good employer, much less the world’s best. 

Walmart Inc., an even larger employer than Amazon with 2.3 million employees at the end of fiscal 2021, including 1.6 million U.S. workers, appears to have increased its appreciation for its employees, at least for a little while.

After the closing quarter of Walmart’s 2019 fiscal year, CEO Doug McMillon thanked workers. A year later, that changed to McMillon saying another strong year was “thanks to our amazing associates,” who performed “exceptionally well during a busy holiday season in the midst of a pandemic.” Meanwhile, in the latest earnings report, McMillon said it was “exciting to see how the teams are simultaneously navigating today’s challenges and reshaping our business,” without actually thanking his associates for another strong year. — Tomi Kilgore

Online shopping got faster and better. 

The pandemic accelerated the shift to e-commerce as millions of Americans turned to online shopping in 2020 to a degree they never had before. Shoppers have now become accustomed to all things being delivered to their doorstep, from groceries to clothes to mattresses. It’s easy to forget that, not too long ago, delivery service was a far more fussy perk that often came with high fees, high purchase minimums and long waits.

Retailers had to get creative with how they fulfill orders. And, surprisingly, the pandemic revealed an advantage to having a fleet of well-run bricks-and-mortar locations, with retail giants like Walmart and Target Corp.

using their stores to manage inventory, deliver products and enhance customer service.

COVID-19 has not only changed the way customers shop but transformed the way retailers sell goods and think about the shopper experience, with technology being the key driver to that continued evolution as we enter Year 3 of the pandemic. (Read the full story.) — Tonya Garcia

We rolled up our sleeves for Extreme Home Makeover: Quarantine Edition.

As people started spending more time at home, many invested in making their immediate surroundings more comfortable and attractive. One survey of 2,000 homeowners in June 2020 found nearly four in five noticed potential home-improvement projects while in quarantine. The most popular projects included refreshing the kitchen cabinets (65% of respondents) and upgrading smart home technology (63% of respondents). Indeed, TV and home-computer sales outgrew smartphone sales during the pandemic, Deloitte reported

Many people also upgraded their living spaces to accommodate the activities that they missed most, such as traveling, going to the movies or hitting the gym. There was a surge in people installing swimming pools in 2020. These included everything from $30 inflatables sold on Amazon to full-on construction projects. “We want to have a little oasis in our backyard,” one father told MarketWatch. “What if it happens again, and we’re locked down?”

Home-improvement stores and home-goods retailers benefited — for a time. Wayfair Inc.

saw its customer base jump 53.7% to 31.2 million in 2020. Home Depot Inc.

had a record year in 2021, with $150 billion in sales, and the outgoing chief executive said the business has grown by more than $40 billion over the last two years. But some analysts aren’t sure whether the home-improvement blitz will continue. “Some of this is because so much improvement activity has already been undertaken,” wrote Neil Saunders, managing director at GlobalData. ”And some is because household incomes are increasingly squeezed by rising inflation.” — Nicole Lyn Pesce

Gig workers didn’t see the gains that their employers did.

Some changes in our way of life have been a boon to gig-economy leaders like Uber Technologies Inc.
DoorDash Inc.

and Airbnb Inc.

That’s especially true in terms of food delivery, which consumers embraced during the lockdown and is a behavior that appears set to stay at its elevated level, even as restrictions have eased. DoorDash benefited, but so did Uber, which built Uber Eats into a formidable business when its ride-hailing business slowed. Now, more consumers are ordering everything from prepared foods to convenience-store snacks to groceries online, which also is good news for Instacart, a company that’s expected to go public this year.

For Airbnb, the work-from-anywhere trend that became popular because of the pandemic has meant more long-term stays. While some travelers still prefer hotels, employees who want a change of scenery while they work may prefer staying in houses with kitchens and room to move around. 

But the pandemic has been another story for gig workers, who were either out of work or risked their health to keep working. Some collected unemployment, but the multibillion-dollar gig companies that depend on their labor did not and do not pay into government unemployment-benefit coffers. Many gig workers are back to protesting low wages, increasing costs, and lack of worker protections such as paid leave and health benefits that were a concern before the pandemic. — Levi Sumagaysay

The IRS became a social service agency of sorts.

The Internal Revenue Service’s title spells out its mission: collecting cold, hard tax money that pays for government functions. Yet the pandemic underscored the agency’s capacity for keeping families from the financial brink. The agency distributed three sets of stimulus checks, which sent more than $800 billion in direct cash assistance to millions of people. The child-tax-credit payments last year paid out another approximately $93 billion.

The IRS “has major social policies and benefits running through it,” said Nina Olson, the former national taxpayer advocate at the IRS. The pandemic highlighted what Olson calls the IRS’s “dual mission” of collecting taxes and providing assistance to households via the tax code. 

But the agency, in its current state, has been stretched thin by its weighty tasks. Between the IRS’s churn of checks and its temporary office closures early in the pandemic, the agency accumulated a backlog of millions of unprocessed returns and correspondence.

TaxWatch: The IRS wants to clear its tax return backlog this year — now it needs to hire more people

Proponents of an enlarged IRS budget — after years of inflation-adjusted declines and staff attrition — say the backlog reaffirms the need for more money and more resources. Why? Because too many families are financially hurting as they wait for overdue refunds from last year. — Andrew Keshner

A pandemic lesson in investing: It’s better to wait it out.

What investors learned, we hope, is the importance of not selling into a down market, and not trying to time the stock market. 

From the then-all-time closing high on Feb. 19, 2020, through the pandemic bottom on March 23, 2020, the S&P 500

fell 34%. After that, it took only until Aug. 11, 2020, for the index to recover and close at a record high. For all of 2020, excluding dividends, the S&P 500 gained 16%, followed by a 28% gain in 2021.

A market timer who tried to avoid the worst of the pandemic downturn by selling might have come back in too late to enjoy most of the upside during the bounce-back that followed the March 2020 bottom and subsequent gains. The stock market reacted to unprecedented stimulus by the federal government, which helped prop up corporate earnings and support stock prices, as the Federal Reserve acted to increase liquidity by lowering short-term interest and increasing the money supply.

Remember the cliché: “Time in the market beats market timing.” — Philip van Doorn

Companies returned to a financial metric that makes them look better.

U.S. companies turned to an old habit in 2020: using non-GAAP metrics, which can make corporate financial performance look a lot better than it actually is. The Securities and Exchange Commission had cracked down on the overuse of nonstandard accounting metrics in 2016, but companies in the S&P 500 resumed the practice in droves in 2020.

The financial data provider Calcbench took a close look at the use of GAAP and non-GAAP numbers in 2020, measuring the difference between net income, in dollar terms, of the 60 companies with the biggest difference between GAAP and non-GAAP metrics. (GAAP refers to Generally Accepted Accounting Principles, the U.S. standard.) It found that the group’s non-GAAP net income exceeded GAAP net income by $132.2 billion — and was more than double the reported GAAP net income of $130.7 billion. — Ciara Linnane

As the dust settles, employers still hold a lot of the legal cards.

When employer COVID-19 vaccine requirements turned into legal showdowns with hesitant workers refusing shots, employers prevailed again and again in court.

The Biden administration tried to require businesses employing at least 100 people to either make their workforces test weekly or be vaccinated, but the Supreme Court’s conservative majority blocked the regulation from taking effect, saying the administration had overstepped its authority. — Andrew Keshner

Some Americans had to rethink saving for retirement.

Many Americans halted their retirement savings — or, in some cases, dipped into their nest eggs to make it through the pandemic. 

Around 17% of Americans said they are saving less money for retirement because of the pandemic, while 16% said they were saving more, according to a survey of 1,000 people conducted by the Penny Hoarder in October 2021. Two-thirds of respondents said they had made no changes to their approach. 

Where an individual lived also made a difference. Of the people who said they saved more, 44% lived in the Northeast, and only 14% were in the South. Men were also more likely to boost their retirement savings, potentially widening a gender gap that was well-established prior to the pandemic.

The pandemic may have made saving for retirement a pipe dream for people who lost jobs or part of their incomes, as well as for those who contracted COVID-19, or who stopped working to take care of a loved one with the virus. But there’s already a glimmer of hope for future retirement security. According to Fidelity Investments data, the average account balances in employer-sponsored accounts and IRAs are rising. The average balance in IRA accounts at the firm jumped 11% in between the fourth quarter of 2019 and the fourth quarter of 2020. — Alessandra Malito

Telehealth is finally part of everyday healthcare in the U.S.

Telehealth has long been held up as the kind of medical innovation that the U.S. healthcare system desperately needs. It’s cheap, easy to use and convenient for everyone involved — and yet, prior to 2020, barely anyone was using it. Telehealth visits made up less than 1% of U.S. medical claims in February 2020, according to Fair Health.

Then came COVID-19, and telehealth usage surged. In April 2020, in the midst of the lockdown, telehealth visits made up 13% of all private medical claims. Though numbers have leveled out and now hover around 4% of claims a month, that’s still much higher than it was pre-pandemic. 

Is telehealth part of healthcare’s permanent toolbox? “Prior to the pandemic, telehealth was a novelty. That all changed two years ago when people were first isolated in their homes and needed an alternative way to get access to care,” Kristi Henderson, senior vice president of UnitedHealth Group Inc.’s

Optum Center for Digital Health, told MarketWatch in an email. “These past few years have allowed us to see the real possibility of a digitally enabled system of care that optimizes virtual care and in-person care.” — Jaimy Lee

What will Big Tech’s return to the office look like? 

The pandemic has for two years upended the way Silicon Valley works, emptying millions of square feet at lavish, new office digs at Apple Inc.
Nvidia Corp.

and elsewhere, replacing them in many cases with the creature comforts of home — and the high-speed bandwidth enabling connections via Zoom Video Communications Inc.

and Microsoft’s Teams.

The advent of a hybrid approach led tech executives from startups to Big Tech to reassess future work schedules and office floor plans given the unpredictability of the virus and its variants. Workspaces were redesigned, employees signed up for occasional office visits through “hoteling,” and two- to three-day in-person work weeks were drawn up.

What employees are returning to will be more than just socially distanced spacing and noncontact elevators: They will likely encounter new co-workers as a result of the so-called Great Resignation of the past year. — Jon Swartz

Next up: a vaccine for the common cold?

Drug manufacturers like BioNTech SE
Moderna Inc. and Pfizer Inc. may have been dizzied by the unprecedented success of their COVID-19 vaccines, which suddenly brought them billions of dollars in revenue, massive stock-market gains and household-name recognition. 

Though the new vaccines stem from decades of scientific research, the companies were able to develop safe and effective shots while also preparing to manufacture them for billions of people within about a year of the virus’s first being identified. 

In addition to developing a next generation of COVID-19 vaccines and boosters, these companies and others are also taking aim at additional viruses. Moderna and Pfizer have put new vaccine candidates into the clinic that aim to prevent the common cold, the flu, herpes, Lyme disease, HIV and Epstein-Barr.

“Nobody should be hospitalized because of a respiratory virus,” Moderna CEO Stéphane Bancel told investors in February. “We have a technology to do that. We believe nobody should have medical consequences short term or long term because of a latent virus.” — Jaimy Lee

Things are starting to get better.

Unemployment claims have fallen back below pre-pandemic levels to 1.5 million for the last full week of February. The labor market is tight, with a record number of job openings reported at the end of 2021, and millions are quitting their jobs each month.

Commuting, travel and in-store shopping all show signs of recovery in data tracked by MarketWatch. Petroleum sales to gas stations have been up 0.5% from the pre-pandemic average of 8.9 million barrels, the number of passengers passing through Transportation Security Administration screenings at airports is down only 3.9%, and same-store sales as tabulated by Johnson Redbook are up 13.1% from a year ago.

While certain areas show a return to pre-pandemic trends, data tracked by MarketWatch to compare competing sectors tell a different story. Spending on goods is up 28% from February 2020 levels, outpacing spending on services, which is up 5%. Spending on child care is still down more than 20%, which has remained steady throughout the pandemic, while spending on toys continues to grow — it’s now 40% above February 2020 levels. Movie-theater spending, which plunged almost 100% in April 2020, is still down almost 60% from February 2020, while spending on streaming services is up 40%.

Despite some data points that signal a rebound, consumer sentiment is hardly ebullient. According to Morning Consult’s Daily Consumer Sentiment Survey, levels of late are at 82.0, well below the 115.7 pre-pandemic high. Sentiment exceeded 100 again in April 2021 but trended down amid the delta and omicron waves. — Katie Marriner

Not everyone is going back to the office.

President Joe Biden said during the State of the Union address that people in the U.S. should feel safe enough to return to work, but office buildings are still largely deserted. The nationwide office occupancy rate is at only 38%, according to Kastle Systems. But the return to the office isn’t “one size fits all.”

A recent Pew Research Center survey found that a majority of workers — 59% — doing their jobs at home say they work from home all or some of the time. More than 70% of workers want flexible remote work options to continue after the pandemic, according to a Microsoft report. And almost half of U.S. workers said they would even take a 5% pay cut to continue to work remotely at least part of the time, according to a report released by Owl Labs and Global Workplace Analytics in November. What’s more, one in four people surveyed said they would quit their jobs if they couldn’t work remotely — something employers may want to keep in mind in light of the Great Resignation.

Considering how significantly Americans have changed their lives since the outbreak of the COVID-19, the future of office work remains up in the air. — Jeremy Binckes

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