2020 has not been so kind to the world. The U.S. economy has seen one of the worst times in history following a record fall due to the coronavirus pandemic.
But there does seem to be hope with the New Year approaching. Well, the reason for this is quite obvious and that is the authorization of coronavirus vaccines. As people start to get vaccinated, the threat of the virus can reduce and the Americans can go back to their normal routines. This can help the U.S. economy recover at a very rapid pace.
The good news is that the deal of providing aid of $1 trillion to unemployed Americans along with struggling businesses has been sealed by Congress.
Aneta Markowska, who is the chief economist at Jefferies LLC, expressed her shock by saying that this is surprising news that Congress has delivered beyond expectations.
However, this path back to recovery won’t be a smooth one as several challenges are waiting ahead. Workers are being discharged at a high rate, consumers are not spending much and the key businesses like retailers and restaurants are having a hard time to survive with the restrictions imposed by the government.
A couple of indicators can be used to provide a clearer picture of how the economy has been affected by record Covid-19 cases. An important one is known as “core orders” which is a measure of business investment that is a part of the report on durable goods orders.
Surprisingly, investment in the goods-manufacturing aspect of the economy has been quite high for the past six months. This shows that people are hopeful about the situation and are looking forward to 2021.
As the manufacturers are not directly in contact with the customers unlike the service sector, one would think that they are safe from the impacts of the pandemic but this is not the case. As more people are getting infected day by day, more workers have to be at home to take care of their families. This has led to a large number of jobs being unfilled.
So as the situation gets better, this manufacturing sector would be the one that would be recovering the fastest. The recovery would also depend on the global economy as it would be bringing the U.S. exports back.
A survey could help the investors figure out what’s going in the minds of the consumers. A new bill is likely to be approved by Congress regarding an aid package as the layoffs continue to increase at a high rate.