The US economy grew by 6.4 percent in the first quarter of this year. The distance to Germany and Europe is getting wider.
Three million vaccines a day, reopening of stores and restaurants, and new freedoms for citizens: The United States’ successes in fighting the Corona pandemic are increasingly reflected in good economic data. Also in Washington, Thursday, the government announced higher gross economic output in the January-March period compared to the fourth quarter of 2020, with an extrapolation rate of 6.4 per cent for the full year. This was again much more than the 4.3 percent increase the country made between October and December. In the early summer of last year, at the height of the first Corona wave, GDP collapsed by more than 30 percent.
With strong growth, the United States is widening the gap to include Europe, for example, where the economy is only slowly recovering. Above all, what could give Americans courage is that the recovery not only brings stability, but is also based on a broader foundation. Above all, consumption and the labor market, the previous economic problem for children, are now in a much better condition than they were only a few months ago. Retail sales, for example, rose by a whopping ten percent in March, and consumer confidence in April reached a level for the first time that economists at the Conference Board for Economic Research had measured before the outbreak of the pandemic.
In some areas of the economy, the recovery is already having odd-looking consequences: For example, the many restaurants and restaurant chains that fired employees on a large scale last year are complaining that they could not find enough chefs, waiters and guides. Some employers are already offering job seekers higher salaries, employment bonuses, or paid maternity leave in order to become more attractive. Fast food chain Chipotle Mexican Grill plans to pay college fees if a student works with them for at least 15 hours per week.
Catering employees migrate to other industries
However, all this does not mean that the United States has already mastered all of its problems and ultimately left the Corona recession behind. The labor shortage in the catering industry is at least partly due to the fact that many other, often better-paying sectors are currently looking for new employees. Some unemployed people may also shy away from the clear communication with customers that inevitably comes with many restaurant jobs. Still others see no reason to take on a low-wage job as long as the state pays the dramatically increased unemployment benefits stipulated in the latest economic stimulus programs.
Additionally, there are other risk factors that could slow down the recent positive overall economic development. These include the hugely high prices of many raw materials and foodstuffs that cause problems for the industry, but also the possibility of new Corona booms emerging in other parts of the world in addition to local political conflicts. Not only does President Joe Biden want to push infrastructure and a social program totaling more than $ 4 trillion (about 3.3 trillion euros) through Congress in the coming months, but he also intends to introduce hefty tax increases to the top earners and the wealthy – a combination the Republicans vehemently reject. Another problem could be corporate and individual bankruptcies, whose numbers only rise dramatically in the aftermath of an economic crisis. (Also read: The First Hundred Days of Amazing Joe Biden)
In light of the many things that cannot be achieved, experts’ forecasts for further US economic development are also inconsistent: While the International Monetary Fund, for example, believes that the United States will achieve significantly higher than average growth rates in the coming years, others warn. Against excessive optimism. Joseph LaForghna, chief US economist at French investment bank Natixis, emphasized that he does not consider economic development to be particularly sustainable yet. “The recovery will slow down dramatically in the coming year, more than many people think,” he said. He personally expects only a small increase “well under three percent” for 2022.
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