Joe Biden’s honeymoon with the Americans seems to have lost some of its energy. The vaccination campaign went strong in the beginning but now, mainly due to a large part of people who are undecided or even against the vaccine, it is slowing down dangerously. Many projects promised by the Democrat, from the police reform to the cancellation of the wall with Mexico, to the containment of immigration are getting bogged down in Congress under harsh republican opposition.
But there is one point that instead seems to remain as a constant aid to the president, and that is the country’s economy.
In fact, in the second quarter of the year, the powerful American economic machine gave another acceleration. Supported largely by the reopening, by the increase (albeit now a bit slow in vaccinations) and by the government’s economic stimulus plan, it reached a growth rate of 1.6% (6.5% in the ‘year).
A trend that has made it possible to recover practically the entire pre-pandemic level.
In the Great Recession of 2009, it took the United States over two years to make it out of the crisis. Now it seems that it took only a few months not only to get out of it but even to recover the lost.
However, they are not all roses for Joe Biden. In fact, growth is far from the 2.1% (8.5% year-on-year) that analysts had predicted. It is only a tenth more than that recorded in the first quarter, 1.5%, when the situation was different. The vaccination machine was slowing, the return to normal still too timid, and the Joe Biden administration’s $ 1.9 trillion relaunch program under discussion in Congress.
In any case, consumer spending grew by as much as 2.95%, but private investments contracted by 3.5%.
The labor market, on the other hand, is slowing down as many employers complain about the lack of workers. Which sparked the debate on the “too much validity” of the social benefits promoted by the Democrats. The unemployment rate was 5.9% last month. Before the pandemic it was just over 3.5%.
The spread of the Delta variant of Covid-19 is creating some concern for the next few months.
Federal Reserve Chairman Jerome Powell was optimistic but cautious about the effects of this new version of the virus on the economy. “We are not experts on this virus – he said – but with a reasonably high percentage of the vaccinated population and working vaccines, it seems fair to estimate that the effects will be minor.”
Finally, the Fed raised its growth forecast for this year to 7%, from the 6.5% projection it had done last March, a speed never seen since the 1980s. And this is also a hope for the rest of the world.