No aspect of life in America has been spared from the COVID-19 pandemic. Millions got sick, hundreds of thousands died, and even everyday tasks like shopping for groceries and going to work changed dramatically.
According to the US Pandemic Misery Index from the USC Dornsife Center for Economic and Social Research, 80 percent of Americans will experience coronavirus-related hardship as the pandemic progresses.
We’re not quite out of the woods yet. But Almost two-thirds of Americans have had at least one COVID shot. On average, there are still more than a million doses of vaccine given each day. Accepted new guidelines from the CDC Fully vaccinated individuals are largely able to resume pre-pandemic life (without having to wear a mask), businesses, government agencies, and all types of public shelters are enthusiastically starting to reopen.
There will be no recovery for the hundreds of thousands of Americans who lost their lives to the COVID-19 pandemic. But for those who have only suffered economic hardship, there seems to be hope on the horizon. The economic recovery is advancing.
Unlike some earlier periods of economic instability, the government responded to this downturn with tremendous political supportthat seems to serve its purpose well. Consumers amassed trillions of trillions in additional savings during the pandemic and are now interested in spending. Companies are looking for employees; new businesses are set up faster than ever before. Employee confidence in the labor market is the highest since at least 2000. As a percentage of after-tax income, the household debt service burden is approaching its lowest level since 1980, when this figure was first recorded. Real estate prices are rising and The stock market is hovering near record highs. Evidence is mounting that the economic recovery is not only on track, but is also progressing faster than expected.
A quick and powerful economic recovery is certainly better than the alternative. However, economic growth that is too rapid is not entirely without risk. Some economists fear market bottlenecks caused by the overheating of the economy. A shortage of goods and raw materials has already occurred in some sectors as consumers and businesses compete for available stocks. There is also a labor shortage in certain areas of the economy. These conditions caused an increase in inflationalthough many experts expect the surge in inflation to be only a temporary deviation.
The Fed expressed confidence that price increases will remain a temporary phenomenon. However, some investors are skeptical. The Fed and other nations’ central banks as the global recovery picks up pace, could tighten monetary policy earlier than expected.
The Executive Summary of the Commentary on Current Economic Conditions in the Federal Reserve District (commonly known as the “Beige Book”) is a report that is published eight times a year in which each Federal Reserve Bank gathers anecdotal information about the current economic situation in their district. The information gathered by each of the Fed’s 12 regional banks is then compiled and summarized.
The latest Beige Book was published on June 2nd. the fed said, “Several districts cited the positive economic impact of increased vaccination rates and relaxed social distancing measures, while also noting the adverse effects of supply chain disruptions.” However, the Federal Reserve generally used a relaxed tone in the recent Beige Book and ended their national summary of macroeconomic activity with the words: “Overall, expectations have changed little and contacts are optimistic that economic growth will remain solid.”
A handful of Fed officials discussed the possibility of scaling back the central bank’s bond-buying program in the near future. This has worried some analysts. But the markets seem to have adopted the official Fed narrative that inflation will only be temporary.
The economic recovery appears to be ahead of schedule for the time being. Of course, this condition still carries some risk. Investors will keep a close eye on further inflation data. Should the recent surge in inflation prove to be more than a temporary spike, the Fed will likely take a step in monetary policy.
Jonathan Wolf is a civil litigation attorney and author of Your debt free JD (Affiliate link). He has taught legal writing, written for a variety of publications, and made it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are likely pure gold, but are entirely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the loan anyway. He can be reached at [email protected].