The US government, against the backdrop of success in the fight against the pandemic and the lifting of coronavirus restrictions, believes that the country’s economy will recover at a reasonably rapid pace, Report informs referring to Reuters.
However, the US faced several obstacles on the way to the implementation of its plans.
“Who knew reopening would be as hard as it has been?” Richmond Federal Reserve President Thomas Barkin said as he recounted just a few of the anomalies in the economy: Theme parks are limiting their hours because they can’t hire enough workers, despite high unemployment; auto factories are slowing production because of supply shortages in an era of record sales.
Based on output alone, the United States has recovered. According to the latest estimate from the Atlanta Fed’s GDPNow model, the economy has surpassed its $19.3 trillion pre-pandemic levels. When it comes to jobs, however, it is still more than 7 million in the hole, with likely many months to go before anything like a full labor market recovery is reached.
Unusually for a recession, people have money to spend, and from an unusual source: the government. Ongoing unemployment insurance payments, the expansion of child tax credits, and other federal aid are keeping households flush. Unclear is when or if private-sector wages will take up the slack as the aid ends.
And consumers are spending. Spending on services - the lion’s share of household outlays, which make up 70 percent of the economy - has been ticking up, particularly in recent weeks. As a result, many restaurants are crowded, and owners complain of difficulties hiring.