Long after COVID first caused the economy to collapse in early 2020, the pandemic still persists. Although at a lower incidence, the Delta variety is still responsible for positive cases, while the Omicron version is just now beginning to appear throughout the nation. President Biden has advocated for vaccines with greater vigour.
The overall state of the economy has improved from before the outbreak. Even if unemployment is close to pre-pandemic levels and there are plenty of jobs in some industries, shortages and inflation still exist, and some people haven’t caught up to where they were at the beginning of last year.
Even many people now decide against going back to work right now. But a lot of people are still having trouble finding good jobs. Although the government unemployment benefit expired more than two months ago, millions of individuals continue to struggle with a lack of food and unpaid debts.
There should be a fourth stimulation check. Several states, notably California, have acknowledged the need for more assistance and have made additional payments. However, in 2021, will the Internal Revenue Service (IRS) distribute another stimulus check?
That hasn’t been decided in writing. However, a lot of hints indicate where things are going.
The purpose of the relief payments was to lessen COVID’s financial burden while also assisting the economy. Beginning in March, the American Rescue Plan began making the third wave of assistance payments (ARP). About 169 million people received up to $1,400 each over the ensuing months.
That was almost the entire $422 billion put aside. The $600 payments from January, which arrived nine months after the $1,200 payments from the beginning of the pandemic, were quickly followed by the ARP checks.
Many people who didn’t genuinely need the money were aided, but they also appear to have worked.
According to the latest recent estimate from the Bureau of Economic Analysis, the U.S. economy expanded at an annualised rate of 2.0 per cent in the third quarter of 2021. (Problems with the supply chain may have prevented faster expansion.)
That represents a significant deceleration from the ferocious speed of the second quarter’s growth of 6.7 per cent. The balance of the year will see continued, albeit slower, growth, according to the Conference Board.
Gross domestic product (GDP), a measure of economic activity across the U.S., has reached levels from before the outbreak. That broad metric indicates that the economy has fully recovered.
Large swaths of the workforce have experienced little financial hardship as a result of the outbreak. Many tasks that may be easily completed at a desk at an office can also be done at a desk at home.
In addition, with three stimulus cheques and fewer places to spend throughout the majority of the pandemic, many Americans saved more than they otherwise might have.
Up until September 2021, the personal saving rate remained significantly higher than pre-pandemic levels, peaking at 33.7 per cent in April 2020.
It finally decreased to 7.5 per cent in September, which is lower than the 8.3 per cent from February 2020, the month before the epidemic began.
Brian Moynihan, CEO of Bank of America, stated on Face the Nation in June that his clients had not yet spent 65–70% of their most recent two stimulus cheques. Pent-up demand and those additional savings undoubtedly fueled the recovery’s overall economic growth.
Due to cheap interest rates and homebound individuals discovering the constraints of their living conditions, the housing market has also experienced a boom.
According to a recent survey from the National Association of Realtors, the national median sales price for existing homes reached $353,900 in October, an increase of 13.1% from the same month in 2020.
Homes priced more than the median contributed significantly to that increase. The housing supply fell in September and was down 12 per cent compared to the previous year. Additionally, 82 per cent of the properties that sold in October had only been listed for sale for a few weeks.
The stock market is doing well as well. The Dow Jones has had a few rocky weeks, but it is still significantly higher than it was at this time last year.
It has frequently come close to records. On Monday morning, the market started at 34,633, up from 30,069 at the same time last year.
There are still issues with the Delta variation and poor immunisation rates in several regions of the world. The overall number of COVID cases is still declining in some regions and increasing in others. Some locations still have mask regulations in effect, while others have reinstated them.
The market has benefited from the Food and Drug Administration’s (FDA) full approval of the Pfizer vaccine as well as the FDA’s approval of booster injections for all adults. Investors on a personal level who saved their stimulus funds are still invested. Larger investors are still betting on a robust economy in the coming months.
While many analysts are concerned about increasing inflation, some predict some of the fastest economic growth in decades.
According to predictions made in November, prices will increase by around 6.6 per cent in 2021. This contrasts with rates of 2.3 per cent in 2019 and 1.7 per cent in 2020. But according to the most recent figures, prices are increasing by 6.2 per cent annually, the greatest rate in thirty years.
October saw a 0.9 per cent increase in prices, exceeding early-summer highs. Excluding volatile commodities like food and energy, core consumer prices increased by 0.6%.
New vehicles, computers, and televisions are just a few of the items that continue to see price increases and require semiconductors. The cost of oil is also soaring.
Price increases and commodity shortages are partly a result of the economy suddenly opening up. The pandemic’s depressed prices have to return to normal.
However, businesses were unable to meet a year’s worth of accumulated customer demand. Amid significant shifts in consumer demand patterns, they also had to revitalise and retool their supply chains.
And all of this has occurred as manufacturing and delivery continue to be slowed down by shipping problems and other challenges.
The way and what people eat have changed as a result of COVID. It’s not always clear how these adjustments will go in the future.
However, businesses have been forced to forecast where the market for their goods will be after everything has settled. In a typical economy, predicting the future is challenging enough.
When an economy had to deal with a rebound after trying to recover from a pandemic, it became much more difficult.
Consumers will likely continue to experience price adjustments and shortages for a wide range of goods far into 2022. However, economists believe they should get better with time.
Consumer expenditure increased by 1.7 per cent in October compared to a 0.8 per cent increase in September, indicating that it is still strong.
Auto sales are also showing signs of recovery as production rises to meet demand. In general, the rise represents encouraging news for the upcoming holiday shopping season. Spending on products is nevertheless higher than it was before the outbreak.
The pandemic has made the widening imbalance in the larger economy even more apparent. While many households had financial success during COVID, many others have regressed to their early 2020 levels.
Whether wage employees could work remotely during the shutdown or had jobs that required them to be on-site during the shutdown accounts for a large portion of the disparity.
The loss of a job and the reduction in hours worked were two of the main causes of financial instability throughout the pandemic.
According to a Center on Budget and Policy Priorities analysis of U.S. Census survey data from late September and early October, 9% of American adults (or roughly 20 million people) reported a food shortage in their homes over the previous week.
Renters who have children in their family make up 23% of the approximately 12 million renters who have fallen behind on their rent.
The government eviction moratorium, which ended on October 3, did not eliminate unpaid rent; rather, it postponed the obligation.
And despite this, there were still evictions in various areas of the nation. The $46 billion Congress set out for rental assistance has, in contrast, only partially reached tenants and landlords.
Over a quarter of American adults (63 million people) reported having some difficulties paying bills the week before as of late September.
Additionally, employment is still below pre-pandemic levels. In November, the unemployment rate decreased to 4.2 per cent as some people entered the labour field again.
However, job growth fell short of projections. Only 210,000 new jobs were created by employers in November, well below the forecast of 535,000. About 530,000 new jobs were created in October.
Some worry that the emergence of the Omicron variety is limiting development. The majority of low-wage jobs were lost during the pandemic, and while many positions have returned, many still go unfilled.
In the week ending November 27, over 222,000 persons applied for unemployment insurance for the first time, a little more than the week before.
(A typical week before the epidemic saw about 250,000 new job applications.) Almost 2.3 million people were receiving unemployment benefits as of the week ending November 13.
(The program’s termination on September 6 resulted in the loss of benefits for the roughly 4.9 million individuals receiving PUA.) Due to lengthy waits, apparent ineligibility, and other obstacles, many unemployed Americans never got unemployment insurance or other government benefits.
Aside from the Delta and Omicron variety, there are still several obstacles to job growth. Some have contended that extremely generous benefits make choosing not to work more appealing than choosing to be employed. Some employees were also able to save enough money to postpone their return to work right away.
However, one’s capacity for work is also influenced by other factors. Many parents found it difficult to find childcare when their children attended remote schools, but the return of in-person instruction might allow some parents to find new jobs. The nation’s overall immunisation rate is 59.4%.
However, state percentages vary from 73.3% in Vermont to 41.5% in West Virginia. The immunisation rate is lower in many counties across the nation.
There are still some areas where COVID poses a threat, notably the current Delta variant. As it keeps appearing in states across the nation, a different strain known as the Omicron variety is also causing worry.
Many people feel uneasy performing their jobs in front of strangers. Hiring can be more challenging when there is a mismatch between labour force capabilities and job requirements, not to mention the rising standards of what employees would tolerate in a position.
Instead of taking what comes their way, many people are holding out for something greater. Then there is the overall turbulence that always develops when an entire economy steps on the gas.
Similar to before the pandemic, many people who want to work are unable to obtain positions that offer the pay and benefits they require to survive.
“There is not a shortage of Americans looking for work, there is a shortage of Americans willing to work for starvation wages with no benefits, no health care, and no protections during a pandemic,” asserts Marie Newman, a U.S. Representative from Illinois.
Approximately half of all states made an effort to press the issue and compel people back into the labour force.
These states, most of which are governed by Republicans, at least tried to stop giving their residents the $300 federal unemployment benefit supplement before the official Labor Day cutoff date. Gusto, a provider of payroll services, conducted research that revealed shutting off federal benefits didn’t increase employment.
Americans who are still waiting for their recovery were able to pay their bills and put food on the table thanks to the federal unemployment benefit and the prior batch of stimulus funds.
The child tax credit in advance gives families some extra assistance. However, this money is only so useful. Additionally, some legislators believe that the payouts are insufficient.
At the end of March, a group of Democratic senators—among them Vermont’s Bernie Sanders, Massachusetts’ Elizabeth Warren, and Oregon’s Ron Wyden—sent a letter to President Joe Biden asking for “periodic direct payments and automatic unemployment insurance extensions connected to economic conditions.”
“This crisis is far from finished, and families deserve certainty that they can put food on the table and have a roof over their heads,” the senators wrote in their letter. Families shouldn’t be at the mercy of legislative timetables that are always changing and impromptu fixes.
A similar stance was outlined in a previous letter from 53 Representatives, led by Ilhan Omar of Minnesota, to Vice President Kamala Harris and President Biden. Recurring direct payments can help people satisfy their fundamental requirements, offer racially equal solutions, and cut the length of the recession, according to the report.
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Rashida Tlaib of Michigan and Alexandria Ocasio-Cortez of New York, two other prominent House Progressives, signed on as additional signatories. The desired stimulus payments were not quantified in the letter.
But soon after, a tweet stated that it would be $2,000 every month for the duration of the pandemic.
Payments of $2,000 every month until the pandemic is over.
