The US economy right now is somewhat going up. When the pandemic hit the country this year and stay home orders were issued, the economy took a substantial downturn. Millions of people lost their jobs since many industries closed down.
The only industry that did make some money out of this pandemic was the tech sector, which became a lot more profitable than ever before.
The government also tried to stimulate the economy, which has led to some positive impacts being seen. However, decisive actions like supporting the oil and gas industry, rebuilding the infrastructure, and the American jobs outsourced to other countries must be repatriated, so that the economy can fully rise on its feet and come out of this recession.
Why did the US Economy take a Downturn?
The United States economy took a massive downturn because it is entirely dependent on consumer spending. As the spendings go up, the economy also goes up. However, this year due to the pandemic-driven lockdown, many businesses and factories were temporarily closed. This led to millions of people losing their livelihoods and consumer spending going down, which caused the GDP to take a nosedive by almost 31 percent.
The Status of the Economy Right Now
The US economy is on the rise according to the Bureau of Economic Analysis. The National Economic accounts show an increase in the gross domestic product by 33.1 percent due to the reopening of the businesses
The same statistics show that consumer spending also grew by 0.5 percent, while personal income decreased by 0.7 percent.
In the International Economic accounts, the current account deficit increased by a vast margin of almost $59 billion in the second quarter of the year. Q1 had a deficit of $111.5 billion, which rose in Q2 by $170.5 billion.
The US international investment portfolios have also taken a downturn as American abroad assets totaled $28.87 trillion while the liabilities are up at $41.92 trillion. The US is liable for $13.05 trillion in the second quarter instead of $12.17 trillion, which was recorded in the first quarter.
The trade deficit has also increased in October, which currently sits at -$63.1 billion.
The foreign investments from all over the world for establishing businesses have also gone down according to the report’s findings in July, where it was down by almost 37.7 percent from $312.5 billion in 2018 to $194.7 billion in 2019.