Is the U.S. economy returning to pre-pandemic levels? It’s now been over a year since the pandemic hit the U.S. and affected almost every aspect of our lives. As businesses begin to reopen, shots in arms are at an accelerated pace along with increased hiring and a fresh batch of stimulus checks, we are on the road to recovery.
Robust Job Growth
According to the Commerce Department, sales increased 9.8% in March and applications for unemployment benefits plunged last week to a fresh pandemic low. The distribution of $1,400 stimulus checks to individuals and robust job growth last month help explain the rebound in sales. A quicker pace of COVID-19 vaccinations and the easing of pandemic-related restrictions on activity will probably stimulate sales, especially in retail categories that have been hardest hit by social distancing.
Another report showed unemployment fell by almost 200,000 last week. U.S. stocks rose and Treasury yields declined. Spending at restaurants rose 13.4% in March, as sales at apparel retailers jumped 18.3%. Businesses that have been strong throughout the pandemic, including furniture outlets and building material merchants, experienced solid sales in March. E-commerce sales also rebounded.
Will these positive trends continue?
While the economy has shown signs of coming back, Federal officials say the U.S. has a long road to recovery with many Americans still out of work and the virus still around. While federal stimulus payments provided a temporary spending boost last month, their impact in the longer term is still unknown. Reports in the coming months will show whether job growth and overall consumer confidence will be enough to allow for such huge monthly sales gains.
Carolina Macedo, the author, is the Project Coordinator of Marketing Keys.