The US economy had a close shave with a depression last year due to the coronavirus pandemic but a year later, it is looking at posting robust growth.
While a bullish sentiment is present among executives, analysts and consumers, analysts have said the economy is expected to reach pre-COVID-19 levels within a year. While the newly announced fiscal package will boost economic activity, employment levels are expected to return to the early 2020 levels within a year.
"We are not living the downside case we were so concerned about the first half of the year ... We have a prospect of getting back to a much better place in the second half of this year," Fed Chair Jerome Powell told lawmakers on Wednesday.
Vacation Bookings, Job Openings
Suggesting a major upturn, Oxford Economics has said the US economy, the world's largest, is likely to record 7 percent growth this year.
According to data from AirDNA, vacation bookings for the end of March are just 2 percent below their pre-pandemic level, Reuters reported. In another significant metric, job openings are 4 percent above the pre-pandemic baseline. Meanwhile data on retail foot traffic, air travel and seated diners at restaurants have all moved up, the report said.
The US has vaccinated about 46 million people so far. By inoculating some 15 percent of the population the US has retained its edge in terms of the speedy rollout of coronavirus vaccine. While the emergence of new variants can still derail the economy, so far the direction and progress of the vaccination drive is confidence-inspiring.
While the US GDP is expected to reach the pre-pandemic level this summer it is observed that the recovery rate is twice faster than the rebound recorded after the 2007-2009 recession. Data showed that it took six years after the recession to reach the prior employment peak. However, this time, employment rates are likely return to normal within this year. Treasury Secretary Janet Yellen had said last month that the US is likely to reach full employment next year.
Last week, Bank of America said that the US economy will witness "stellar" growth in 2021. According to analysts at the bank, the US 2021 US GDP is likely to grow 6.5 percent as they say they are "more convinced" about the consumer sentiment. The bank also said there will be heightened economic in the next year as well.
"The goods side of the economy is still riding high while the services side is waiting with bated breath to participate. We expect the economy to accelerate further in the spring and really come to life in the summer," BofA had said.
A Reuters poll of 56 economists showed that more than 90 percent of them believe the economy would reach pre-COVID-19 levels within a year. As many as 23 respondents said this level of recovery will take place within six months.