US Economy on Road to Recovery in 2021
The first few weeks of 2021 see a gradual improvement in the US economy, which suffered severely after numerous mandatory and voluntary measures were implemented in response to the COVID-19 pandemic.According to the projections of the Congressional Budget Office (CBO) published in February 2021, the real gross domestic product (GDP) is likely to return to its pre-pandemic level during the middle of 2021. What’s more, it might even surpass its potential at the beginning of 2025.
CBO’s estimates are promising when it comes to the labor force as well. By 2024, the number of employed people should be the same as before COVID-19 hit, while the unemployment rate is predicted to drop throughout the following years.The recent vaccine approvals are the main reason for such a hopeful forecast. However, the new variants of the virus have some economic experts and government officials concerned. “It is widely expected that we will continue to make progress controlling the virus, reducing the need for social distancing, but variants of the virus, slow take-up of vaccinations, or both could slow progress,” said governor Lael Brainard during the C. Peter McColough Series on International Economics.
Although life is slowly returning to normal, many businesses are still experiencing labor shortages, and not only because of the health risks caused by the pandemic. Issues related to child care are now more prominent than ever as distance learning continues indefinitely. At the end of January, the Chief Medical Adviser on COVID-19, Dr. Anthony Fauci, stated that the Biden administration hopes to begin vaccinating children by mid-year.Currently, Pfizer seems closest to issuing a vaccine for young adults, seeing as the participants in the second and third phases of its clinical study are as young as 12. A spokeswoman for the corporation announced that, depending on results in regard to adolescents, they might move on to examining the effects of the vaccine on 5 to 11-year-olds as well.As the USA slowly regains its footing, so does the rest of the world. The World Economic Outlook Update from the International Monetary Fund indicates that the global economy is expected to grow 5.5% in 2021. This is certainly great news as the report shows that the USA’s main trading partners – Canada, China, Mexico, and Japan – are gradually recovering as well and will continue to do so in 2022.
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