The US economy is slowing down
Three million vaccinations a day, reopened shops and restaurants, new freedoms for citizens: the successes of the USA in the fight against the corona pandemic are increasingly reflected in good economic data. As the government in Washington announced on Thursday, overall economic output increased in the period from January to March compared to the final quarter of 2020 at an extrapolated rate of 6.4 percent for the year as a whole. That was again significantly more than the 4.3 percent increase that the country had posted between October and December. In the early summer of last year, at the height of the first corona wave, the gross domestic product (GDP) collapsed by more than 30 percent.
With the strong growth, the USA is widening the gap to Europe, for example, where the economy is only recovering slowly. Above all, what can give the Americans courage is that the upswing is not only stabilizing, but also based on an ever broader foundation. Above all, consumption and the labor market, the previous economic problem children, are now in much better shape than they were just a few months ago. Retail sales, for example, rose by a whopping ten percent in March, and consumer confidence in April even reached a level for the first time that the economists at the Conference Board economic research institute had last measured before the pandemic broke out.
In some areas of the economy, the recovery is already leading to strange-looking consequences: For example, many restaurants and restaurant chains that laid off employees on a large scale last year complain that they cannot find enough cooks, waiters and ushers. Some operators already offer job seekers higher salaries, recruitment bonuses or paid maternity leave in order to become more attractive. The Chipotle Mexican Grill fast food chain even plans to pay college fees if a student works for them for at least 15 hours a week.
However, all of this does not mean that the USA has already mastered all its problems and finally 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 pronounced customer contact that inevitably comes with many restaurant jobs. Still others see no reason to take on a poorly paid job as long as the state pays the significantly increased unemployment benefits enshrined in the latest economic stimulus programs.
Higher prices for many raw materials could cause problems for the industry
In addition, there are other risk factors that could slow down the recent positive overall economic development. These include the significantly higher prices for many raw materials and food that are causing problems for the industry, but also possible new corona mutants in other parts of the world and political disputes at home. President Joe Biden not only wants to push an infrastructure and a social program with a total volume of more than four trillion dollars (around 3.3 trillion euros) through Congress in the coming months, but also intends to introduce substantial tax increases for top earners and the wealthy - a mix which the opposition Republicans strictly reject. Another problem could be corporate and personal bankruptcies, the numbers of which typically only skyrocket in the wake of an economic crisis.
In view of the many imponderables, the experts' forecasts for further US economic development are also very inconsistent: While the International Monetary Fund, for example, believes the United States will achieve significantly above-average growth rates in the coming years, others warn against being too optimistic. Joseph LaVorgna, America's chief economist at the French investment bank Natixis, emphasized that he did not consider the economic development to be particularly sustainable so far. "The upswing will slow significantly more in the coming year than many believe," he said. He personally expects only a small plus of "well below three percent" for 2022.
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