With vaccinations becoming available and accessible to the US public last spring, people hoped that America would return back to normal and reopen the economy.
However, with the surge of the delta variant limiting people’s travel and spending this summer, the economy is still facing instability. On October 28th, the U.S. Bureau of Economic Analysis will release the US GDP for the third fiscal quarter of the year. The predictions are that this third-quarter GDP will see stark drops. Leading economists project that this quarter’s GDP will have grown by a rate of 2.8 percent which is more than a 50 percent decrease from the previous 6.7 percent growth rate in GDP.
An additional factor contributing to the declining economy is the shortage of labor. There are currently more than 10 million unfilled jobs in the United States. This has led to an increase in the prices of goods and resources. Many factories simply can not produce the efficient amount because they lack the necessary labor. There are a hundred cargo supply vessels sitting on the California coast waiting to be unloaded but the necessary manpower to unload them is lacking
Despite the high demand for employees and the many job openings, unemployment rates are still low. In September, unemployment levels were still high, 4.8%, compared to pre-pandemic levels.
Some theories have arisen regarding the causes of shortage of labor while unemployment is still an issue. Businesses and companies have begun mandating vaccines and have been allowed to fire employees who are unvaccinated. Additionally, schooling is still not fully back to normal across the US. Remote learning and school’s quarantine procedures have kept many Americans out of jobs.
Another area of the economy that is raising concern is the current inflation rates. According to the US Bureau of labor, 89% of Americans have reported paying higher prices this year. However, consumers aren’t paying relatively higher prices for travel-related expenses, restaurants and events which would indicate a return to the normal industries. Consumers are faced with higher prices for their everyday items such as meat, rent, gas and used cars. While currently, inflation rates are not at such alarming rates, economists speculate that inflation will continue to rise domestically and affect the inflation rates across the globe — especially if the government continues to pump money and aid into the economy through infrastructure bills and other legislation.
Even as America continues to recover from pandemic level recession states, the US still faces complex and significant issues that the economy.