The Covid-19 pandemic has changed the way consumers behave and as a result, the economic growth over the past 2 years has stagnated. The U.S. is one of the largest and most successful economies in the world. When changes happen in the United States economy, the whole world feels the effect. Economic growth is essential for the advancement of any nation. The United States has enjoyed relatively high GDP numbers since the 2008 financial crisis (Baccini et al., 2021). Unemployment rates continue to reduce while consumer and producer confidence is on the rise. Another indicator is the GDP and stock markets which continue to recover to pre-pandemic levels. In the next five to 10 years the U.S economy is expected to experience positive growth.
In the year 2019, the GDP of the country increased by 2.2% which indicated a slight increase (Baccini et al., 2021). However, during the pandemic year the GDP reduced by 3.5% which indicated that the Covid-19 pandemic had impacted many businesses ((Baccini et al., 2021). Data shows that in 2020 many businesses closed down which slowed down the growth of the economy (Baccini et al., 2021). Closed businesses do not contribute to any revenues the government had to bail out some of the businesses using the small business loans. This helped stimulate growth as the current G.D.P estimates point to a 7.5% growth in the year 2021 (U.S. Bureau of Labor Statistics, 2021). The data is for the first two quarters of the year.
An assessment of the consumer confidence data for April indicates that consumer confidence is at the highest since February 2020. The index indicates that consumer confidence is at 121.7 which is an increase from 109.0 in March this year (U.S. Bureau of Labor Statistics, 2021). Additionally, the expectation index rose steadily in the last month to109.8 and 108.3 (U.S. Bureau of Labor Statistics, 2021). The rising expectations by consumers are a result of the stimulus checks and the projected high-income prospects (Baccini et al., 2021). Research on consumer appraisal of the current conditions found that 23.3% think that the business conditions are good (Baccini et al., 2021). Also, the productivity in the 1st quarter of 2021 increased by 5.4% which points to an economy that is slowly going back to normal (U.S. Bureau of Labor Statistics, 2021).
Another reason why the U.S. will experience growth in five to ten years is the improving job market. The pandemic affected many people who had jobs due to layoffs which became permanent as some businesses closed down (Baccini et al., 2021). The United States has tried to avert the challenges experienced by people who lost jobs by providing stimulus checks (Baccini et al., 2021). The stimulus checks have helped many Americans survive the pandemic period. In April 2020, the temporary layoffs contributed highly to the 14.7% unemployment rate (U.S. Bureau of Labor Statistics, 2021). A year later in April 2021, the unemployment rate stands at 6.1% which indicates that the job market is rebounding steadily (U.S. Bureau of Labor Statistics, 2021). Also, the average hourly earnings have slightly increased by $0.21 in April 2021 (U.S. Bureau of Labor Statistics, 2021). San Francisco experienced the highest over-the-year wage gain at 44.3% (U.S. Bureau of Labor Statistics, 2021).
In summary, the United States has shown signs of rebound through the rising GDP and the low unemployment rates witnessed in the country. Also, as the data shows the country’s productivity has increased in the first quarter which indicates that businesses are starting to operate normally. The Covid-19 pandemic led to business closures which affected the employment rates and productivity rates. The government responded by providing small business loans and stimulus checks to assist in the recovery.
References
Baccini, L., Brodeur, A., & Weymouth, S. (2021). The COVID-19 pandemic and the 2020 US presidential election. Journal of Population Economics, 34(2), 739-767. Web.
U.S. Bureau of Labor Statistics. (2021). U.S. Bureau of Labor Statistics. Web.