2020 brought about major hits to the U.S. economy. Government-mandated shutdowns put many establishments out of business for good; meanwhile, others took serious hits and are working to get back to where they were prior to COVID-19.
The good news about 2021 is that lockdowns, capacity limits on establishments, and other COVID-19 restrictions are gradually waning. Meanwhile, travel levels are increasing and the American public is demonstrating a collective willingness to go out.
According to Washington Examiner, this year could very well be the one where the national economy experiences a significant comeback.
A 2021 Comeback for the American Economy
According to the latest reports from the Federal Reserve, the 2021 gross domestic product growth is expected to reach 6.5%. Should this prediction hold up, it would mark the most robust yearly growth since Reagan was in office.
Last month’s jobs reports also indicate that there is hope on the horizons. In February 2021, the economy experienced 379K new jobs, as opposed to just the 200K that economists projected.
Prior to the pandemic, travel-supported jobs accounted for 𝟏𝟏% 𝐨𝐟 𝐭𝐡𝐞 𝐔.𝐒. 𝐰𝐨𝐫𝐤𝐟𝐨𝐫𝐜𝐞, but in 2020, total travel-supported jobs accounted for a staggering 𝟔𝟓% 𝐨𝐟 𝐮𝐧𝐞𝐦𝐩𝐥𝐨𝐲𝐦𝐞𝐧𝐭. #SaveTravel #DCH21 pic.twitter.com/fs8UkONfCE
— U.S. Travel (@USTravel) March 17, 2021
Thus far this year, consumer confidence has also been on the rise. As more Americans are vacccinated against COVID-19 and as a greater number of businesses reopen and loosen limitations, the collective confidence of the American consumer is expected to climb even more.
There’s no denying that progress on the economy is coming this year; however, there are also some minor, yet important details, that the American public ought to know.
The Fiscal Policy Factor
As the U.S. economy roars back, it’s important for Americans to understand the role that fiscal policy will play in this matter.
First and foremost, rate increases are not expected to happen within the next three years. Hence, rates that are short-term are virtually guaranteed to stay at zero; this will be the case until high employment levels arrive and 2% supported inflation is in place.
WATCH: Our Chief Economist Janelle Jones on the latest unemployment data and why helping workers will help the economy: pic.twitter.com/8N9n9F5G5u
— US Labor Department (@USDOL) March 19, 2021
Due to the passing of the Biden-backed American Rescue Plan, the federal government is projected to spend $1 trillion in 2021 alone. However, economists have already warned that there’s a real possibility of inflation becoming unmanagable.
The Democrat president, on the other hand, is banking on an economic comeback benefiting his party politically.
What do you think about the economic projections for 2021? Do you have confidence that the American economy is going to make a real comeback this year? Let us know your thoughts about 2021’s economic projections in the comments section below.