Although the world’s largest economy has recovered faster than expected, there are jobs that will not regenerate soon and sectors such as tourism that have been revived at a slower pace.
The US economy is recovering faster than expected from the recession caused by the pandemic, exceeding the most pessimistic estimates. But some areas remain in decline and there are doubts about what the recovery will look like.
How fast will the economy grow?
The International Monetary Fund estimates that US GDP will grow by 5.1% this year, after contracting 3.5% in 2020, when the pandemic forced activities to cease. But economists believe the growth rate could rise further.
The nearly $ 3 trillion in government stimulus programs last year, including a $ 900 billion measure in December, was key to helping the economy recover. Congress is also moving toward adopting President Joe Biden’s $ 1.9 billion bailout package, which will provide more support to businesses and families, as well as state and local jobs.
Federal Reserve Chairman Jerome Powell said the growth could reach 6%, while analysts such as Gregory Daco of Oxford Economics estimated it could exceed 7%.
The rapid recovery has raised concerns about possible price increases, but Powell has allayed those fears, saying inflation rises are unlikely to continue in the coming months. The Fed has promised to keep interest rates low until employment recovers and inflation will exceed 2% for some time.
When will the post return?
As companies managed to reopen and adapt to the new covid-19 restrictions, the country recovered about half of the 20 million jobs lost in the first weeks of the pandemic.
Many of the remaining 10 million jobs are in the most affected service sectors, such as hotels and restaurants, and those job losses have hit black and Hispanic workers in particular.
Millions have had reduced working hours or left the workforce altogether, including a large number of women taking on childcare tasks.
These jobs and hours are unlikely to increase until the vaccine reaches a critical mass of Americans.
The official unemployment rate reached 6.3% in January, up from 3.5% the previous year. However, for black workers, it was 9.2%. But, including those discouraged from looking for work or part-time jobs that follow several hours, the highest rate was 11.1%.
“Help and encouragement are key to saving the polluted waters of Covid, stopping job losses … and preparing the pump for a stronger recovery as social distance measures are lifted,” said Swonk, economist Diane Grant Thornton.
For Moody’s Analytics, Biden’s incentive plan would create 7.5 million jobs this year.
Which sectors return the fastest?
The real estate market, strong before the pandemic, stopped only for a short time before returning to higher levels.
Sales of new and existing homes have risen by about 20% above pre-pandemic levels, driven by lower mortgage rates and the potential for more and more people to move to less crowded areas due to remote work.
But supply has fallen as homebuilders struggle to keep up with demand, rising prices.
The manufacturing sector has also recovered since last summer, although production remains below the beginning of 2020.
And while the pandemic forced consumers to cut back, they spent on cars, electronics, furniture and building materials and the garden. Online retailers were the biggest winners, with sales growing by about 30% during the year.
Where does the damage persist?
The most visible impact of the recession is in the travel, hospitality and entertainment industries, which will probably start quickly when people can travel freely and enjoy concerts, movies or plays.
But economists have warned of lasting damage. Thousands of shops and restaurants have closed permanently and there is a risk of a wave of bankruptcies if the recovery does not come soon enough for some heavily indebted companies.
State and local governments, usually unable to obtain loans to finance their operations, are facing the possibility of eliminating jobs for teachers, police officers and dismissals to offset the massive aid costs.
And homeowners and tenants are currently protected by moratoriums on foreclosures and evictions, but where they will go will depend on what happens to their outstanding rent and mortgage payments after these moratoriums expire.
“We must continue to provide financial support to our citizens, building a bridge to the end of the pandemic,” Treasury Secretary Janet Yellen said this week.