The American economy has historically been in far better shape, however, there was a 6 percent growth in Q12021 thanks to stimulus checks and vaccination rollout which led to an uptake in consumer spending. In addition, it is hoped that Biden’s promise of massive new federal investments will continue this trend of growth.
There are always so many seemingly conflicting opinions and suggestions as to where best to invest money. According to finance and tech investor Mozes Konig, “trends come and go very quickly on the stock market. This makes it more challenging to advise people on long-term investing as even the seemingly most stable companies’ stocks will drop at times.”
Mozes Konig has been involved in investments for a number of years. Sometime ago he went through some issues with Interpol which he thankfully has now resolved. Since then, he has been working with a variety of different companies – primarily but not exclusively in the tech sector – and advising clients on investment opportunities.
“I believe that while no company is 100% safe and guaranteed as a good investment, there are definitely some that are more viable than others,” Konig says. “Take Microsoft, Apple and Amazon for example; none of them are going down anytime soon,” he added.
For those looking for stability (perhaps even more important during these times, having lived through COVID) they would probably be best advised to invest money in the solid, long-standing companies like the ones mentioned above.
America’s economy seems to be coming back from the pandemic, having recorded its fastest first-quarter GDP growth in nearly four decades.
Consumer spending is up (thanks to tax credits and stimulus checks). Hiring is also increasing, even in New York where just a few short months ago it seemed like the pandemic would never end. Moody’s Analytics chief economist Mark Zandi said:
“I’ve never seen an economy that feels as good as this one today. The economy is booming. It’s busting out all over.”
Further, Oxford Economics predicts a growth of American GDP to average out this year at 7.5%, higher than what we’ve seen for nearly 70 years.
However, there is still great cause for concern given unemployment numbers (which indeed is substantially less than a year ago) given that there are an additional 4 million unemployed Americans than there were in February 2020. To counter this, continued China trade will be required in particular in movies (which accounted for 30 percent of China’s box office sales in 2019) and education (exports support more than 3 million people who work in the industry in America).
Small businesses have definitely had a lot to deal with over this past year-and-a-half. Since March 2020, many have suffered from lockdowns, stay-at-home orders and restricted gatherings. While no-one has managed to avoid challenges during this time, it seems financially that this particular demographic has possibly suffered the most.
According to a recent article on the subject, the first thing we have to remember anyway is that America’s business demographic is made up of 99.9% small businesses. Of those working in the private sector, a little less than half work for these firms. Closure of these businesses is currently 34 percent (compared to January of 2020) and San Francisco has been severely impacted with a rate much higher than that of 48%. Experts are now discussing a K-shaped recovery but with these numbers, that could be slowed down as well.
Despite all of this, people’s spirits are still strong and there is much work that is being done to turn this around. For example, while there is a national Small Business Day held in November, New Jersey had one last month. NFIB New Jersey (New Jersey’s leading small business association) held its Small Business Day on May 5 2021 and discussed a variety of issues relating to the devastation small businesses have encountered and what they need the state to do. One action is aid to provide the $1bn lost from New Jersey’s Unemployment Fund since the start of the pandemic. To do this, liability protection laws must be passed for small business owners and of course, re-opening the economy.
Joe Olivo, NFIB member and a local small business owner further explained:
“I know I am not speaking just for myself when I say that the past 13 months have been among the most challenging I have faced in the 33 years that I have been at the helm of my business. Many of the Executive Orders coming from the Governor have made the cure worse than the disease. Many of our political leaders and the media continue to lump all business together as though we are all multi-national corporations. Fortunately, NFIB provides us a way to collectively voice our opinion regarding legislation that is often detrimental to not just our businesses, but to the millions of people we collectively employ.”
According to New Jersey’s NFIB State Director, Eileen Kean, the recent Small Business Day provided a “wonderful opportunity for our small business owners to engage with their legislators…[who] need to hear from real people that are being affected by what they do in Trenton.”
Yes, much work still needs to be done but the fact that days like this are being held – in which legislators can really hear what the people need – is a good start.
The coronavirus taking its toll on college education. According to a recent Junior Achievement and Citizens (which polled 2,000 American teenagers), a quarter of high school students have put their college plans on hold, primarily due to lack of financial support from traditional familial sources. Given that tuition fees are extraordinarily oppressive, people are now looking at the worthiness of college vis-à-vis investment in the future. CEO and President of Junior Achievement, Jack Kosakowski explained:
“We’ve had this ‘college thing’ up on a pedestal. As costs have gone up, it’s forcing people to take a more realistic view.”
At this time, high-schoolers are focusing more on career training. This is understandable for three reasons:
- Exorbitant college fees
- Seeing how easy it is to lose a job because of COVID-19, irrespective of a college degree
- Having time during COVID-19 to come up with ideas to make money.
Regarding the latter, youngsters have been finding a variety of ways of making money. These include:
- bitcoin investment (this has become very attractive with the younger generation which is seeing new ways of expanding their money while gaining more control over it);
- video game playing for money (think Playtest Cloud)
- online tutoring for other kids.
Thankfully it looks like the American economy is recovering, as is that of China. This is having a domino effect on optimism for the global market as IMF’s Managing Director Kristalina Georgieva explained:
“While the outlook has improved overall, prospects are diverging dangerously not only within nations but also across countries and regions. In fact, what we see is a multi-speed recovery, increasingly powered by two engines — the US and China.”
Thanks to vaccinations and more US stimulus money the IMF is predicting economic growth at 5.5 percent for this year. Further, there were over 900,000 jobs added in America in March which is the largest leap since August. As RSM US Chief Economist Joseph Brusuelas said:
“An American economy about to regain its swagger after a year of pandemic-induced crisis was on full display in the March jobs report.”
Furthermore, according to a recent CNN Report based on IMF predictions:
“At $1.9 trillion, the Biden administration’s new fiscal package is expected to deliver a strong boost to growth in the United States in 2021 and provide sizable positive spillovers to trading partners.”
With the increase of Americans’ purchasing power, this will positively impact international consumer spending as they purchase French fashion, Italian cars, Australian precious metals, etc.
Utility bills can be pricey but what many household heads do not realize is that with just a few simple tweaks, bills can be substantially reduced. IDT Energy seeks to focus on providing energy-efficient solutions for its customers so that all Americans can benefit from reduced bills.
According to EIA 2019 figures, the average residential family spends approximately $118.8 on their electricity bill (over $1,400 per year). This figure may not seem exorbitant, but if even a few hundred dollars per year could be put back into one’s pocket, then that is an appealing thought.
Here are a few simple suggestions to get you started:
- Contact the US Department of Energy to find out how to undertake a very simple home energy audit. That way you can go through each room as well as past electricity bills and figure out where there is money to be saved.
- Lower the thermostat. Even by one or two degrees. This makes a huge difference to heating/cooling costs
- Unplug, unplug, unplug. Whatever you are not currently using, unplug it. Think about the dishwasher for example that you only put on once a week or the computer. Turning off lights is also recommended since that saves $0.04 per 40 watts.
Saving money on electricity and utility bills really is quite simple. It is just a case of increasing awareness and being in the know.
In this video, Washington D.C.-based anchor of Global Business America Rachelle Akuffo and Chief US Economist, Oxford Economics’ Gregory Daco discuss America’s post-pandemic economic recovery.
In an effort to move over to more American-created goods and products, President Biden put out an order requesting his staff to “review critical supply chains with the aim of bolstering American manufacturing of semiconductors, pharmaceuticals and other cutting-edge technologies.” The goal is to reduce the US’s reliance on imported materials, the creation of well-paid jobs in America and strengthening the economy especially when faced with pandemics, geo-political threats and climate change.
In a discussion Biden had with Congress members, Michael Thomas McCaul said:
“China is looking at investing $1 trillion in their digital economy. If we’re going to be competitive, we have to incentivize these companies to manufacture these advanced chips in the United States.”
Further, together with 16 Republican governors, Gov. Spencer Cox wrote a letter to the President asking for a withdrawal of Executive Order 14008 (“Order”), issued on January 27, 2021. This order will ban the development of new oil and gas on offshore waters and federal land. It said:
“There are many parts of our country where energy is more than a utility bill or tank of gas—it’s a job creating industry that provides good careers and steady paychecks to families in rural areas and small towns. Where the recent surge in oil and natural gas provided jobs and created wealth when we needed it most, the Order will drastically hinder the ability of the oil and gas industry to recover, both onshore and offshore, as the effects of the COVID-19 pandemic subside. In particular, the Order has a negative economic effect upon western states with large tracts of federal land and upon Gulf Coast states, chasing away capital investment for long-term economic growth and undermining public services, public conservation, public safety, public education, and more. Beyond directly impacted states, the Order is estimated to spike American residential energy costs by $1.7 billion per year.”
America’s construction industry – as we have seen since the start of the pandemic – is thankfully thriving. According to a recent article in For Construction Pros:
“Despite the influence of the COVID-19 pandemic, the December 2020 figure was 5.7% above December 2019’s estimate of $1,410.3 billion. The value of construction in 2020 was $1,429.7 billion, 4.7% above the $1,365.1 billion spent in 2019, led largely by solid growth in the residential construction segment.”
There are many construction projects taking place in America at all times. Storage, infrastructure and new buildings will always be needed. Forecasts for 2020-26 in North America indicate that there will be a “healthy growth rate” in construction equipment rental industry which will reach $55bn by 2026. However, this sector was negatively impacted by coronavirus and lockdowns which prevented such companies from operating.
However, Chief Economist at Dodge Data & Analytics, Richard Branch writes:
“While the recovery is underway, the road to full recovery will be long and fraught with potential potholes. After losing an estimated 14% in 2020 to $738 billion, total construction starts will regain just 4% in 2021.”
There will be a rise in single unit home construction starts Branch believes by around 7 percent this year. But multi-family homes he believes “will pay the price for single family’s gain” as the dollar value of these is predicted to drop by 1 percent this year.
So there is still recovery needed. But overall – and especially compared to other industries – the pandemic has definitely not been the worst for America’s construction industry.