The number of planes that flew and landed and the crowds that gathered at the major airports all point out one thing: the new normal is here. The question is, are these also signs that the economy is recovering? Where is the United States really in rebounding, and will the Delta variant soften the growth?
At the height of the COVID-19 pandemic in the United States, Rich Miller, writing for Bloomberg Quint, revealed that America just entered into new normal 2.0—or two-point awful. The recovery would be a lot worse than after the Great Recession in 2008–2009.
According to him, growth would be likely “tepid” after the initial rebound. The unemployment rate would be higher as thousands of businesses were forced to shut down, some for good. The inflation rate would be lower, but government debt would soar, particularly since interest rates would be low to encourage consumers to spend.
However, on the ground, consumers and companies would be more cautious. Americans, for example, would likely spend less and save more. After all, nothing is uncertain anymore. Anyone can lose their job at any time.
Businesses, meanwhile, would have to deal with lower efficiency due to a disrupted global supply chain. Some might have no choice but to spend more since they would try to bring back production to domestic shores to manage logistics and fulfillment more effectively.
The Real Deal
Miller’s article was more than a year ago. Are his claims true? One of the possible sources to evaluate the recovery of the United States post-pandemic is CNN. Its tracker looked into various aspects from jobs to investments, travel, spending, and leisure.
According to its back-to-normal index, the economy is currently operating at 92 percent, which means it is only 8 percentage points closer to its pre-pandemic levels. That sounds like good news considering the battery the country experienced at the peak of the health crisis. About 44 states posted improved index numbers last week (around the last week of July to the first week of August).
Marketing agencies, contractors, and subcontractors may have to prepare their marketing request for proposal as the construction industry is likely to rebound quickly this year for many reasons:
- Projects that halted last year because of the stay-at-home and lockdown orders will now continue.
- The government and the private sectors are planning to pour money into construction to help stimulate the economy. The industry will experience growth in almost all its markets, from residential to commercial, government infrastructure, and industrial.
- The construction industry will benefit from the increased demand in the residential market due to lower interest rates and possible spending on healthcare, including improvements on and construction of new facilities.
Are People Back at Work?
Mass lay-offs and termination were rampant in 2020. In one survey, about 25 percent of the respondents said they or someone in their home had lost a job because of the coronavirus outbreak. Now, are they back at work?
CNN’s unemployment claims chart, sourced from the US Department of Labor, showed that it peaked in May 2020, with over 23 million claims. It fell significantly on July 24. By then, the number of claims was already less than 3 million.
The unemployment rates of most states are now less than 5 percent. Places like Texas currently post a rate between 5.1 and 7 percent. These were far better than a year ago where the United States experienced over 10 percent unemployment rate (seasonally adjusted).
The low unemployment rate is partly due to the number of job openings available and filled. The US Labor Department revealed that nonfarm payrolls in July grew by almost a million jobs—about 15 percent more than in April 2020.
Meanwhile, ZipRecruiter cited that job vacancies increased to almost 15 million in March after declining to around 6 million in May 2020.
The Threats That Lie Ahead
Nevertheless, these gains may be offset by lower labor participation. Some might have put their job hunting aside after not getting any leads or calls at the beginning of the year. Others prefer to look for higher-wage positions, while a number who have lost their jobs opted to run a business or pursue other interests.
There’s also the Delta variant, believed to be more transmissible than the original coronavirus. The seven-day average for new cases in the United States has already reached 50,000 a day, forcing investors to evaluate their market positions. States are now reimposing health mandates like wearing masks indoors and social distancing. Places like New York now require vaccination passports.
Overall, the numbers seem to point positive recovery for the country. But it remains not a good time to be complacent as long as threats are still there.