The worldwide pandemic that hit during March 2020, made a lasting and thorough impact on the economic health of all the countries in the world including giants like the United States of America. It is important to see the economic trends in the US as a result of the recession in 2020. Judge if the US economy is stable and is improving or declining.
-
-
Business Cycle
With recovery, the labor market has been receiving above-average growth in their employment sector. Since the US population was fully employed right before the pandemic, there was talk that the GDP will only grow slightly more than a single percent annually since job creation has slowed down. However, after the recession in 2020, and the declining US economic health, the GDP suffered a crippling fall. It is now again on the rise as many recently unemployed citizens scramble to look for jobs and sustenance in the wake of the novel coronavirus.
-
Central Banks:
Central banks entered the year in an accommodative stance with short term rates resting at 0. Nominal 10-year trends in negative territories of Japan and many other European countries. While the year began with tame inflation, with the pandemic it rose to an unprecedented high. There were about 7.2 million unfilled jobs at the beginning of the year. By April 2020, the unemployment rate rose to 14.7%, the highest recorded since the Great Depression of the 1920s.
-
Stock Market:
After a bullish 10-year run, many analysts began questioning that a stock market bubble might be forming due to low bond yields. Historically, the market’s capitalization had roughly matched the size of a broader economy. The equity rate rose to 28% in 2019, pushing the market valuation to 1.5 times the total annual GDP. With a strong consumer demand, durable profits, and rising overseas revenue, the country began a good cycle at the beginning of the year according to the macroeconomic forecast, along with the additional boost of innovation and globalization of corporate profit shares in the economy.
However, the prices were also rising with profitability and the earnings multiples were nowhere close to that of the 2000s. Moreover, with the declaration of the national emergency from March 2020, as a result of the global pandemic, this steady rising economic boom of the stock market suffered a halting crash hitting the recession of 2020.
-
Abroad Outlook:
The year 2020 began with trade talks between the USA and China which eased international tensions. In addition, globalization continued to create immense wealth and opportunities for the US economy health to flourish. With globalization continuing to define economic trends as developing countries strive to acquire the living standards of developed countries, the US had secured a safe position with labor demand outpacing supply due as a result of new opportunities created by international expansion as well as emerging internal markets vastly outweighing overseas competition. With the advent of the novel coronavirus, trade with other countries halted completely as all the countries all over the world shut down their borders in an attempt to stop the spread of the virus. Moreover, this took a great hit at the US’s relationship with China since the first recorded spread of the virus began from Wuhan in China.
-
-
Election Year:
Even though the USA election candidates outline their economic policies for their reigning years, the financial market has not been affected by it. It was believed that the candidates will embrace policies that will grow the overall workforce and generate high levels of productivity in the country, however, while political polarization created dramatic rhetoric, the seeming gridlock on the overall economic policy makes it difficult for any drastic changes in the near future.
-
Map Direction Requests:
Google maps and the Apple navigation system continue to show a reduced movement of driving and walking directions since the beginning of July 2020. There have been unchanging transit direction requests as well for most of the summer. However, walking requests are still above pre-pandemic levels as they have been for most of the pandemic.
-
Restaurant Bookings:
Even with slight variations, the restaurant bookings in the United States have still been 60% lesser than it had been in the year before. These low bookings indicate a continued fear and uncertainty of going out and eating food from places where you do not see the food being cooked. This had made officials question the role of bars in the spreading of the virus. It also shows that while most places have begun allowing some form of eating in restaurants, the citizens of the United States are still very uncertain and do not feel as inclined to eating outside as they were in previous years.
-
Hotel Occupancy:
The hotel occupancy rate of the nation is below 50%. With the travel market suffering a downfall as the government issues a stay-at-home mandate to curb the spread of the virus, the average daily cost of a hotel room keeps rising by almost $1 per week reaching as high as $100. Frequented tourist destinations like Virginia, Detroit, San Diego, Philadelphia, Oahu Island, and New Orleans to name a few remain almost barren, most of their hotel occupancy capacity being below 30%.
-
Air Travel:
With countries closing their borders and the continued spread of the coronavirus, many airlines have slimmed their offerings and believe there won’t be a recovery until a vaccine to fight the novel virus is made available. While there was a rise of passengers to about 40% during June, the overall numbers are low and bleak. The largely now driving population of the country reflects the continued financial turbulence that the airline industry has been facing since the outbreak of the virus in March 2020.
-
Real Estate Purchase:
With the recession in 2020 and the downfall of the US economy’s health, mortgage applications were down by 5.1% in the year. With the lack of stability in jobs, mortgage bankers believe that the level of interest in buying houses will remain somewhat unchanging in foreseeable future.
