9 August 2022

U.S. Economy Slowly Improving Amid Pandemic

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WASHINGTON — There are signs the U.S. economy is slowly improving after the destruction caused by the COVID-19 pandemic. At least, that’s the view of columnist Kimberly Amadeo, who writes an online economic column at thebalance.com.

In it, she says the U.S. economy is slowly improving after the painful illnesses and deaths caused by the COVID-19 virus that swept throughout the United States, closing stores, restaurants, schools, churches, delivery services and a range of other businesses.

This “cautiously positive outlook” is based on reviews of key economic indicators, medical statistics, hospital records and economic statistics, as well as accelerating business reopenings.

Amadeo notes, “Analysts also have taken a hard look at oil and gas prices, and the impact on climate change.” But she adds, “The most critical economic indicator is GDP, which measures the nation’s production of all goods and services.”

So what’s the U.S. economy look like right now, she asks?

“The economy recovered in the third quarter of this year, expanding by 33.1%. Although a record, it was not enough to offset earlier losses, including a 5% decline in real GDP at an annual rate in the first quarter, signaling the onset of the 2020 recession.”

As Amadeo writes, “The March recession ended 128 months of expansion, the longest in U.S. history.”

In April, retail sales were off 14.7%, as municipalities and governors closed nonessential businesses. The unemployment rate in April also soared into the mid-teens amid a surge in worker furloughs. By May, however, retail sales recovered 18.3% as shops, restaurants, bars and other businesses large and small began to reopen with safety measures in place.

According to the most recent forecast from the Federal Open Market Committee, the economy was expected to grow at its fastest pace in four decades this year. The Federal Reserve now estimates that the unemployment rate will gradually decline to 4.5% or less.

Unemployment is expected to decline further in the coming months as the $1.9 trillion in pandemic relief checks begin to kick in to the U.S. economy.

Wall Street and the stock market also expect a major booster shot, as consumer spending and investors pour money into banks, stores and the larger economy.

Goldman Sachs is “now forecasting U.S. gross domestic product to grow 8% this year in the fourth quarter compared with the same period a year ago, marking the fastest increase in almost 60 years,” The Washington Post reported Thursday.

And major corporations, including American Airlines and United Airlines, have said they would cancel tens of thousands of planned layoffs.

“It’s just a lot of people who need to get back to work, and it’s not going to happen overnight,” said Fed Chairman Jerome Powell, adding that the economy still had a long way to go before getting the economy back to pre-pandemic levels.

“The faster, the better,” he added.

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