American Economic Recovery in the Wake of COVID-19

America’s economic recovery is going well. Unemployment figures are going down (recent report showing that those filing for benefits dropped to the lowest level since 1969); inflation did increase but not as much as economists had predicted. And consumer spending over the last month showed an impressive level of optimism.

With this data, there is a lot of optimism about the speed at which the economy is recovering.  So much so that Wall Street actually raised their predictions for Q4 2021 growth. And not by just a little bit.  Morgan Stanely’s economists changed their growth predictions by more than double – from 3 to 8.7 percent (with JPMorgan economists similarly going from 5 to 7 percent). These numbers had a domino effect, leading to a predicted increase in GDP estimates as well.

But there still needs to be caution exercised. Given the new COVID-19 variant (Omicron) there has been some pessimism and fear which has obviously impacted the recovery as well. Nonetheless, the Gross Domestic Income (GDI) – a measure that’s based on individual and company income – increased substantially more than it did year on year in 2020. According to Harvard economist Jason Furman, third quarter new GDI figure translates into 4.4% growth which was 100% greater than what was originally reported.

Unemployment figures also dropped with claims being made by jobless for November 20th week ending dropping to a  50-year low, indicating a very strong jobs report with unemployment figures plummeting to even less than before the pandemic hit.