2020 was one of the most difficult years in modern history. We all first-hand know the devastating effects of the pandemic. Millions of Americans lost their jobs, thousands of people fell sick due to the virus and the economy experienced a big downfall all over the world. However, US economic growth is on its path to a full recovery during this year.
The economic rebound has started faster than expected, but there’s still a long way to go. We still need to see how the pandemic advances.
Luckily, the vaccines are working to counter the effects of the public health crisis. On top of that, the powerful monetary and fiscal stimulus also have a big effect on this new economic recovery, so, as we said in the title, not everything is bad news!
So, is the US economy growing?
To put it in perspective, in the first three months of 2021, the United States domestic product grew at a pace of 6.4%. That’s good news considering last year’s general downfall.
It is important to know that, in normal times, a rate above 6% represents an impressive growth.
Therefore, what can we expect for the rest of the year?
It is safe to say that this economic boost is a direct result of the strategies implemented to fight the pandemic. Losing the lockdown restrictions due to the vaccination process led consumers to fuel their spending.
The expectations were around 6.1% growth, but this amazing first-quarter growth is now the biggest one since almost 40 years ago (1984, to be precise).
President Joe Biden declared that we are finally “dreaming again, discovering again and leading the world again”. These words represent the general feeling of all Americans, all thanks to the light at the end of the tunnel that brings us out of this nightmare.
But the crisis hasn’t ended yet. While more Americans get vaccinated against the virus, the different states will start recovering themselves even more.
It is clear for many of us that the stimulus cheques were the tool that saved the economy of millions of families.
Other government measures, such as unemployment benefits, were also life-savers.
Nonetheless, the Labor Department reported recently that 553,000 Americans filed for unemployment benefits the last week of April. That’s the lowest number since the crisis started, but still, it would be higher if we were in a normal situation.
This first quarter might be an opening to what can happen during the rest of the year, but we can’t lose focus right now.
We know that the recovery motivated consumers to buy food, cars, and services more than ever before, but maintaining this momentum is essential to experience a full economic recovery.
The service industry has been one of the most affected during this whole crisis, so it’s good news for them that restrictions are ending.
Either way, it’s fundamental to maintain the confidence given by the ongoing vaccination national effort. That being said, it is also safe to say that we are not entirely back to normal yet.
Many Americans are still struggling in their homes, which causes a lot of trouble for families across our country. The benefits applications are still high as we mentioned before, and while Americans still remain out of work, this number will still increase.
We all know that the American economy highly depends on consumer spending, which makes it crucial to solving the job crisis as soon as possible.
Until all businesses are fully functional, getting our country back to normal won’t be possible.
There are still some impediments to travel and visit new places due to COVID-19, but at least we are on the right track.
People are now saving more money than in pre-pandemic times, which is a good sign for all of us. Now, there are still some months left to experience full economic recovery. The good thing is that we know how to achieve that, so it is up to us to wait, educate ourselves financially and hope for a better future.