The US economy is closer to normal – but still has a way to go
When the Coronavirus pandemic hit American soil for the first time, millions of people lost their jobs within weeks. And in April 2020, the unemployment rate in the United States hit an all-time high.
Things have improved a lot since then. Not only have more jobs been reintroduced into the economy, but the many stimulus rounds that have plagued Americans Bank accounts fueled consumer spending, pumping money into businesses that desperately needed it. Add the fact that the restrictions related to the pandemic have largely been lifted, and there is reason to be optimistic that the economy will soon return to its pre-pandemic state.
In fact, the Back to Normal Index, a measure created by CNN Business and Moody’s Analytics, now stands at 93% as of June 18. This is a peak during a pandemic.
The index consists of 37 national indicators and seven state-level indicators that track measures such as jobless claims, vacancies, domestic air travel, hotel occupancy rates and consumer credit. This 93% figure shows that the economy is in a relatively good position at this point. But even if it is approaching normal, it is not there yet.
Some industries may recover later than others
Some industries were particularly hard hit during the pandemic, such as restaurants, hotels and airlines. But now, Restaurants find it very difficult to find workers, hampering their recovery. Meanwhile, leisure travel has increased dramatically following coronavirus vaccinations and the easing of restrictions. But business travel may not return to pre-pandemic levels for some time, if ever.
Over the past 15 months, many people have done their work from home and meetings and conferences have been held remotely. And now businesses are realizing that this setup works. As such, it becomes increasingly difficult to justify spending on business travel when employees can log in through Zoom rather than crossing the country to sit in person.
It is also interesting to note that weekly jobless claims are still much higher than they were before the pandemic. And there are still barriers preventing some people from returning to work, such as childcare constraints and health issues – an issue that particularly affects restaurants.
Will there be more stimulus aid?
Given the progress made on the economic recovery front, the likelihood of a fourth round of stimulus checks has diminished. Additionally, more than half of U.S. states have made the decision to end increased unemployment benefits before their expiration date in early September.
Some lawmakers say the extra $ 300 a week that the unemployed have raised keeps them from working because some low-income earners make more money out of work than they would with a job. As such, the chances of this boost extending beyond September are slim.
Nonetheless, the economy as a whole is doing much better now than it was a few months ago. And that’s something Americans should be happy about – even if it means they won’t be able to enjoy another stimulus paycheck.
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