“If you liked private credit before, you’ll really like it now.” – Managing director of a private debt investment firm.

As we wrap up our special series on the “new” private credit, let’s look at factors influencing both quantity and quality of deal flow next year.

First, the economy. Recent employment numbers point to a worrisome trend. While unemployment is down, it’s not for good reasons. The number of job searchers has declined, meaning people have given up looking and dropped out of the work force.

Also the pandemic has wreaked havoc on many consumer-facing sectors. While half of the 22 million jobs lost in the early stages of COVID-19 have been restored, about 4 million jobs have been permanently lost. Many of these are in the restaurant, travel, hospitality and leisure industries.

As our Chart of the Week highlights, US air travel has been decimated. TSA data shows that airline activity is just one-third of what it was a year ago. And that shows little sign of coming back until infection fears subside.