Home 2021 The US is Experiencing an Amazing Economic Recovery

The US is Experiencing an Amazing Economic Recovery

by Paul Ebeling

#economic, #recovery

A close review of the data says that the US economy is in a good place in here“– Paul Ebeling

Consumer spending is robust and activity in the service and manufacturing sectors is increasing at a faster than expected rate.

The labor market stabilized in January, but Thursday’s report on initial jobless claims showed there is continuing pressure for workers.

And with Congress having already passed trillions of USDs worth of fiscal aid/relief/stimulus and more is making its way through Congress, and if it happens will flow into the economy during the next several months. Thus fueling more growth.

The overall trajectory of this economic recovery will look really better when compared to the sluggish 10 yrs of growth seen after the Y 2008 financial crisis under Messrs Bush (43) and Hussein Obama (44).

This V-Shaped recovery is very different from Y 2009 and here is why, as follows:

  • The Y 2009 stimulus was late, small and faded too fast. Today’s stimulus has been timely, huge and very persistent.
  • In this VirusCasedemic world, much of the aid/relief/stimulus’ effect is deferred until the economy reopens.
  • The virus chaos should leave smaller economic scars than the biggest banking and real estate crisis in modern history.
  • Household balance sheets were deeply damaged in the last cycle, they are in great shape overall today.

In the yrs ahead, lots will be made of the difference between present GDP growth and pre-crisis trend growth, and the speed with which this does or does not close.

But a close look at the jobs market, specifically how quickly the gap between peak crisis-era unemployment might close in the wake of the virus-related instant recession nearly a yr ago.

The bottom line

With the already in place aid/relief/stimulus and any additional, will beget more consumer spending power, and a corporate sector that is not dealing with the aftershocks we saw at the start of 2010, a pre-virus chaos labor market could return within 1 or 2 yrs.

Putting all Key elements, we look for a faster return to full employment

According to CBO estimates the economy did not reach full employment in the last cycle until 2017, 31 Quarters into the recovery.

This time the experts expect full employment by Q-3 of Y 2022 or 9 Quarters into the recovery.

Economist Bruce WD Barren points out a Key component to the recovery is The People’s management of their debt noting the following data: “One of the biggest influences on Americans’ success is debt. Too much will put you on the path to bankruptcy, while not enough will limit your ability to buy and borrow a home, vehicle, or any other major purchase. Striking the right combination of good and bad debt and balancing it against your income and assets is a skill that takes years to perfect.

Just as debt determines individual success, state and national debt patterns also influence how decisions are made by economists, investors, politicians, and business leaders all over the world.

Below a selection of Key debt statistics everyone should know heading into 2021.”

These numbers present a clear over view of the United States’ debt picture, offering a wider perspective on how Americans are managing their finances.

  • American consumer debt totaled $14.27-T in Q-2 of Y 2020.
  • Overall consumer debt dropped from a record $14.3-T in Q-1 to $14.27-T in Q2 of Y 2020, the 1st decline since Y 2014.
  • At $9.78-T, mortgages make up nearly 70% of American household debt. The next highest debt category is student loans at $1.54-T, followed by auto loans at $1.34-T
  • Approximately just 3.5% of all American household debt is in delinquent status.
  • Overall debt is highest in the 40-49 age group at $3.57-T and lowest in the 18-29 age group at $.94-T
  • In July 2020, 46% of respondents to a Federal Reserve Survey said they would be able to pay a $400 emergency expense with the money currently in their bank account, while another 38% said they would be able to put it on a credit card and pay it in full at the next statement.
  • Additionally, 37% reported they were “living comfortably,” 40% said they were “doing okay,” 17% said they were “just getting by,” and 6% said they were “finding it difficult to get by.”

Have a healthy weekend, Keep the Faith!

You may also like


Your Trusted Source for Capital Markets & Related News

© 2024 LiveTradingNews.com – For The Traders, By The Traders – All Right Reserved.

The information contained on this website shall not be construed as (i) an offer to purchase or sell, or the solicitation of an offer to purchase or sell, any securities or services, (ii) investment, legal, business or tax advice or an offer to provide such advice, or (iii) a basis for making any investment decision. An offering may only be made upon a qualified investor’s receipt not via this website of formal materials from the Knightsbridge an offering memorandum and subscription documentation (“offering materials”). In the case of any inconsistency between the information on this website and any such offering materials, the offering materials shall control. Securities shall not be offered or sold in any jurisdiction in which such offer or sale would be unlawful unless the requirements of the applicable laws of such jurisdiction have been satisfied. Any decision to invest in securities must be based solely upon the information set forth in the applicable offering materials, which should be read carefully by qualified investors prior to investing. An investment with Knightsbridge is not suitable or desirable for all investors; investors may lose all or a portion of the capital invested. Investors may be required to bear the financial risks of an investment for an indefinite period of time. Qualified investors are urged to consult with their own legal, financial and tax advisors before making any investment. Knightsbridge is a private investment firm that offers investment services to Qualified Investors, Members and Institutions ONLY. Qualified Investors are defined as individuals who have met those Qualifications in the relevant jurisdictions. Members are defined as individuals who have been accepted into the Knightsbridge membership program. Institutions are defined as entities such as banks, pension funds, and hedge funds. If you are not a Qualified Investor, Member or Institution, you are not eligible to invest with Knightsbridge. All investments involve risk, and there is no guarantee of profit. You may lose some or all of your investment. Past performance is not indicative of future results. Knightsbridge is not a registered investment advisor, and this disclaimer should not be construed as investment advice. Please consult with a qualified financial advisor before making any investment decisions. By accessing this website, you agree to the terms of this disclaimer. Thank you for your interest in Knightsbridge.