S.The United States is headed for an economic boom, stimulated by government programs and rapid progress in population vaccination. The latest labor market data confirm the trend. According to government figures, around 900,000 additional jobs were created in March. The unemployment rate fell from 6.2 to 6 percent.
New jobs were created in almost all industries. However, the strongest growth was in the number of employees in sectors that were particularly hard hit by the pandemic: the hospitality industry and tourism. In the previous month, the labor market had already shown more dynamism than professional observers had calculated. The plus was almost 400,000 jobs.
America’s factories are also ramping up their production because of increased sales: The Institute for Supply Management reports that the production index has risen from 61 in February to 65 in March. The index is formed from key figures for the ordering of industrial goods, the storage level, the production utilization and raw material prices. An index above 50 already means that the industry is expanding.
State aid amounts to one fifth of economic output
The expansion is being driven by American consumers who dare to go shopping again. The state aid programs, which since March of last year have not only helped the unemployed through lean periods, but also provided many full-time households with additional funds, while consumption options were limited, are helping.
The think tank “Peterson Institute for International Economics” estimates state aid at a total of 20 percent of the country’s economic output. In addition, there is a real estate price boom, which has led to asset gains for homeowners with their own homes in preferred locations, which could increase their propensity to consume. The development is all the more remarkable because the last of the three aid packages, worth $ 1.9 trillion, did not go into effect until March 11th. It is therefore unlikely to have had a major impact yet.
For the whole of 2021, Karen Dynan, an economist at the Peterson Institute, predicts economic growth of 6.3 percent, in the coming year America’s economy is forecast to grow by 3.5 percent. In comparison, the EU has only increased by 4.4 percent this year: lower fiscal stimuli and problems eliminating the virus are the main reasons. America has, according to the portal Our World in Data 46 doses per 100 people have already been vaccinated, the EU just 17 doses per 100 people.
A K-shaped recovery
The infrastructure program being tackled by the White House is not taken into account, but according to Dynan, it should not have a major impact in the short term because the expenditures amounting to around two trillion dollars extend over eight years. The approval of the Congress is also not guaranteed.
As an economy with a high import share, America’s growth also stimulates the economy of exporting nations. This applies to Vietnam, for example, whose growth forecasts have now improved.
However, the positive development in employment cannot hide the fact that almost ten million people are still employed less than a year ago, i.e. before the start of the pandemic crisis. In addition, the economic recovery is K-shaped. This means that some industries or groups continue to lose, while others are already recovering. In addition to the winners, many families are falling behind, according to Dynan.
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