{"id":108460,"date":"2021-03-02T23:14:48","date_gmt":"2021-03-02T23:14:48","guid":{"rendered":"https:\/\/fin2me.com\/?p=108460"},"modified":"2021-03-02T23:14:48","modified_gmt":"2021-03-02T23:14:48","slug":"one-year-into-pandemic-sky-begins-to-clear-over-u-s-economy","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/one-year-into-pandemic-sky-begins-to-clear-over-u-s-economy\/","title":{"rendered":"One year into pandemic, sky begins to clear over U.S. economy"},"content":{"rendered":"

(Thsi March 1 story corrects spelling firm to Vrbo instead of VRBO in first and last and Jeff Hurst\u2019s title to president instead of chief executive in first paragraph)<\/p>

People walk past a shuttered restaurant amid the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, U.S., February 9, 2021. REUTERS\/Carlo Allegri <\/figcaption>

SAN FRANCISCO\/WASHINGTON (Reuters) – Despite the U.S. economy\u2019s near miss with a depression last year and an ongoing coronavirus pandemic that has brought travel to a virtual halt, Jeff Hurst, the president of vacation rental firm Vrbo, sees a boom on the horizon.<\/p>\n

\u201cEvery house is going to be taken this summer,\u201d Hurst said, as the expected protection from vaccines arrives in step with warmer weather, unleashing a cooped-up population with record savings stashed away. \u201cThere\u2019s so much built-up demand for it.\u201d<\/p>\n

That sort of bullish sentiment has increasingly taken root among executives, analysts and consumers who see the past year of comparative hibernation – from the government-ordered business closings last spring to continued risk avoidance by the public – giving way to a cautious re-emergence and green shoots in the economy.<\/p>\n

Graphic: Retail in real time –<\/p>\n

Data from AirDNA, a short-term rental analytics firm, showed vacation bookings tmsnrt.rs\/3uxQ1Wi for the end of March, which traditionally coincides with college spring breaks, are just 2% below their pre-pandemic level. Employment openings on job site Indeed are 4% above a pre-pandemic baseline. Data on retail foot traffic, air travel and seated diners at restaurants have all edged up.<\/p>\n

And economists\u2019 forecasts have risen en masse, with firms like Oxford Economics seeing a \u201cjuiced-up\u201d economy hitting 7% growth this year, more typical of a developing country.<\/p>\n

Graphic: Forecasts point to a better outcome –<\/p>\n

In a symbolic milestone, Major League Baseball teams took to the field on Sunday, as scheduled, for the first games of the spring training season. Crowds were required to observe social distancing rules and limited to around 20% of capacity, but MLB has a full schedule penciled in following a truncated 2020 season that did not begin until July and saw teams playing in empty stadiums.<\/p>\n

Graphic: Oxford Economics Recovery Index –<\/p>\n

DEPRESSION DODGED<\/h2>\n

As of Feb. 25, about 46 million people in the United States had received at least their first dose of a COVID-19 vaccine – still less than 15% of the population and not enough to dampen the spread of a virus that has killed more than half a million people in the country, according to the U.S. Centers for Disease Control and Prevention.<\/p>\n

The emergence of coronavirus variants poses risks, and a return to normal life before immunity is widespread could give the virus a fresh foothold.<\/p>\n

Nor is optimism global. The European short-term rental market, for example, is suffering, with tens of thousands of Airbnb offerings pulled. Up to one-fifth of the supply has disappeared in cities like Lisbon and Berlin, as owners and managers adjust to a choppy vaccine rollout and doubts about the resumption of cross-border travel.<\/p>\n

In the United States, the vaccine rollout and a sharp decline in new cases has produced an economic outlook unthinkable a year ago when the Federal Reserve opened its emergency playbook in a terse promise of action and Congress approved the first of several rescue efforts.<\/p>\n

Graphic: The third wave breaks –<\/p>\n

The fear then was years of stunted output similar to the Great Depression of the 1930s, while some projections foresaw millions of deaths and an extended national quarantine. Instead, the first vaccines were distributed before the end of 2020, and a record fiscal and monetary intervention led to a rise in personal incomes, something unheard of in a recession.<\/p>\n

Graphic: A historic lifeline –<\/p>\n

\u201cWe are not living the downside case we were so concerned about the first half of the year,\u201d Fed Chair Jerome Powell told lawmakers on Wednesday. \u201cWe have a prospect of getting back to a much better place in the second half of this year.\u201d<\/p>\n

\u2018ROCK ON\u2019<\/p>\n

U.S. gross domestic product, the broadest measure of economic output, may top its pre-pandemic level this summer, approaching the \u201cV-shaped\u201d rebound that seemed unrealistic a few weeks ago.<\/p>\n

That would still mean more than a year of lost growth, but nevertheless represents a recovery twice as fast as the rebound from the 2007-2009 recession.<\/p>\n

Jobs have not followed as fast. The economy remains about 10 million positions short of where it was in February 2020, and that hole remains a pressing problem for policymakers alongside getting schools and public services fully reopened.<\/p>\n

It took six years after the last recession to reach the prior employment peak, a glacial process officials desperately want to shorten.<\/p>\n

While recent months have seen little progress, the outlook may be improving. Treasury Secretary Janet Yellen said in mid-February the country had a fighting chance to reach full employment next year.<\/p>\n

It may take more than vaccines, however. Officials are debating how fully and permanently to rewrite the rules of crisis response – and specifically how much and what elements of the Biden administration\u2019s proposed $1.9 trillion rescue plan to approve.<\/p>\n

Fiscal leaders last year cast aside many old totems, including fear of public debt and a preoccupation with \u201cmoral hazard\u201d – the bad incentives that generous public benefits or corporate bailouts can create. For Republicans, that meant approving initial unemployment insurance benefits that often exceeded a laid-off worker\u2019s salary; for Democrats, it meant aiding airlines and temporarily relaxing banking regulations.<\/p>\n

It worked, and so well that an odd consortium of doubters has emerged to question how much more is necessary: Republicans arguing help should be aimed only at those in need, and some Democrats worrying that so much more government spending in an economy primed to accelerate may spark inflation or problems in financial markets.<\/p>\n

If the outlook is improving, however, it\u2019s in anticipation that government support will continue at levels adequate to finish the job.<\/p>\n

\u201cRock on,\u201d Bank of America analysts wrote in a Feb. 22 note boosting their full-year GDP growth forecast to 6.5%, an outcome premised on approval of $1.7 trillion in additional government relief, \u201cunambiguously positive\u201d health news, and stronger consumer data. Given all that, \u201cwe expect the economy to accelerate further in the spring and really come to life in the summer.\u201d<\/p>\n

And the view back at Vrbo? In most prime vacation spots, Hurst said, \u201cYou won\u2019t be able to find a home.\u201d<\/p>\n

Graphic: Business sales outlook improves –<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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