Is it Time for a Financial Recovery?

• Author: Jeffrey Simmons
• Posted: 2024-06-23

Unless you were living under a rock, you know just how bad the economy got in the immediate aftermath of the COVID-19 pandemic. Unemployment claims hit never-before-seen levels, forcing the United States federal government to pump trillions into the economy in direct payments and unemployment assistance to keep people afloat. The economic havoc that COVID brought to us will not fully disappear for a long, long time. However, some economic indicators are starting to point to a rebound, and many are beginning to wonder: Is it time for an economic recovery?

The Signs are There

Across many areas, objective economic metrics are starting to point to the idea that the economy is starting to really take off - at least in the United States. Indeed, there are many broad indicators that show that this may be the case.
First, take the job market. In the immediate aftermath of COVID, unemployment claims broke all modern records, and while we have not yet recovered all of the jobs lost, there is evidence that many of the jobs have returned. First-time unemployment claims hit a post-pandemic low last week, with a mere 547,000 workers filing for first-time unemployment. This is obviously good news and demonstrates the strength of the jobs market. More job gains are expected as vaccinations continue to roll out, with health and economic experts saying that the success of the vaccination program is the most important aspect of job recovery within the United States.
At the same time, other indicators also show good news. Thanks to low interest rates and the stimulus from the American Rescue Plan, the housing market is on fire, with home sales occurring at exceptionally rapid rates. It is a seller's market, and homes are in huge demand, to the point that inventory cannot keep up.
The stock market, too, is doing very well, with all major indexes either at or near all-time highs. This means good news for retirement funds and government pension funds, as well as for everyday Americans who have turned to retail stock trading.

Why this is Happening

There could be many reasons that explain the overall health of the economy, but the biggest one seems to be a stronger vaccine program and a more controlled COVID. While many parts of America still struggles with fighting off the disease, the vaccination program has dramatically improved after a faulty roll-out. Indeed, the original goal of the Biden Administration - 100 million vaccines after 100 days - has been revised upwards, and it is now clear that there will be more than 200 million vaccines after 100 days. This success has slowed the spread of the disease and helped reemploy Americans, and as COVID does ultimatly recede, many jobs will return.
Fiscal measures are also thought to be behind the jobs return. Retail and consumer goods are doing extremely well, and at least some of the boom in this sector is believed to be a result of caused by the stimulus payments in the American Rescue Plan, as well as an extension of funding for small businesses and direct aid to state and local government. Indeed, these measures have been directly cited by numerous economic reports as the reason for a resurgence of the American economy.

Threats Remain

Of course, the news is not completely rosy. COVID-19 remains a deadly threat in many parts of the world, with places like India posting record rates of infections as recently as yesterday. At the same time, the virus continues to mutate, becoming more contagious and challenging the effectiveness of the various vaccines that are available. Thus far, vaccines still remain largely effective, and while the disease is still running rampant in many parts of the world, it has been largely controlled in others. However, were a mutation to become able to escape the vaccine, we could be looking at major problems again.
At the same time, there are geopolitical threats worldwide. Potential military conflict is always a danger, and these dangers seem very real between China and Taiwan, as well as Russia and Ukraine. Were that to happen - and a military conflict to start - the world could again face serious economic struggles.
However, for now, the signs are good. The economy appears to be in the midst of a desperately needed rebound - and this is good news for all of us.