Earlier this year the American economy encountered some growth, which is good but not enough to be an encouraging sign. From April 2021 to June 2021 the acceleration of US’s GDP was 6.6 percent according to the Bureau of Economic Analysis. While that may sound impressive, economists had hoped the figure would have been closer to 8.5%. but there again, the number was still the highest it had been since September of 2020, in the thick of the pandemic.
Bill Adams, a senior economist at PNC Financial Services Group said:
“Business inventories are way too low. It is hard to overstate how screwed up global supply chains are. Delivery delays and shortages have made it extremely difficult for businesses to maintain inventories and prevented an even faster economic rebound.”
While there is definitely cause for optimism with economic recovery, The Economist Intelligence Unit’s global economist Matthew Sherwood points out that it is still not as strong as it should be.
In addition, due to the coronavirus Delta variant, fear has returned and that has impacted the recovery. While July saw the lowest unemployment figure in America since the pandemic began, this month has shown people going back to their home spaces to work and companies less inclined to continue the hiring boom.
It seems therefore that it is very much a case of two steps forward and one step back which a) make it difficult to estimate for the future and b) has to result in an increase in caution.