The Economist April 12th 2021 pp23-24|United States|The economic recovery “Charging ahead” “America’s boom has begun. Can it last?”
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Summary
The Economist created an “economic-activity index” for the United States using various sources including Google mobility data the basis of which consists of visits to “places of retail, recreation, transit and work.” As a 7 day average the index dropped from pre-pandemic levels by about 50% as of April 2020 then rose steeply but topped out initially to -20% by June 2020. After that the index was flat but decreased progressively to about -40% in December 2020, then rose to -30% in February 2021 after which with beginning of vaccination has risen sharply to -20% where it is now. Better news can be seen in JPMorgan Chase’s “Consumer-card spending tracker” which fell precipitously to -40% as of April 2020, the rose sharply to -12% by June 2020, then eased up slightly from -12% to about -8% in February 2021 and now is nearly back to 0. Other data sources confirm these trends-passengers in airports, OpenTable bookings and Hotel occupancy.” Based on all these data “The upshot is that America is likely to register jumbo GDP growth numbers” for Q2 2021 and GDP for 2021 could reach 6%.
This is good news in light of the fact that despite strong job growth in March, 900,000 jobs added, 8 million are still out of work, “one-third of small businesses remained closed. Poverty is higher than it was before covid-19…especially among black families.” Could progress stall? Two concerns are highlighted. First, there’s concern that “America’s productive capacity” could have been so damaged than needed jobs might not be readily available. Second, there’s concerns that covid infections, especially variant forms, will rise again. There is some evidence that cases are rising but most importantly “widespread vaccination has weakened the link between infection and hospitalization.” Having noted that “the Google-Economist” activity index has lost steam in recent days” in Michigan and Florida-states with “high levels of the British variant.”