After being one of the economies hardest hit by the Covid-19 pandemic in the world, how has the United States recovery been?
The following is Nushares ETF Trust’s answer to that question.
Backed by massive fiscal and monetary stimulus and economic reopening, the United States economy recovered faster than expected from the deep recession caused by the Covid-19 crisis and containment measures.
The federal government’s aid measures have totaled approximately $ 5.3 trillion in six packages that have allocated direct payments to individuals and families, expanded unemployment insurance, made loans to large and small businesses, financed hospitals and health agencies, and supported to state and local governments, education and public health / vaccination.
In addition, in August 2021, the United States Senate approved a $ 1 trillion employment and infrastructure plan, which was moved to the House for consideration and to be voted on this Friday.
Recovery of the United States
Meanwhile, the Federal Reserve (Fed) has kept short-term interest rates near zero and enacted credit facilities to help keep the financial system stable, reducing borrowing costs for businesses and individuals.
Already the Gross Domestic Product (GDP) expanded at an annualized rate of 6.3% in the first quarter and 6.5% in the second quarter, according to the estimate of «advance» published by the Office of Economic Analysis, after contracting 3.5% ( annualized) in 2020 compared to the annual level in 2019.
Furthermore, in March 2020, equity and commodity markets were sold and safe-haven assets rebounded as countries began quarantines, restricted travel, and closed factories and businesses, while an untimely war on oil prices between the Organization of the Petroleum Exporting Countries (OPEC) and OPEC member Russia, it amplified price volatility.
In late 2020, the announcement of high efficacy rates in several trials of the Covid-19 vaccine, followed by regulatory approvals and public vaccination campaigns in Western countries, improved the outlook for 2021 and the recovery of the United States.
Rising vaccination rates and some surprisingly strong economic readings in the first months of 2021 led to increased inflation concerns. However, a recent comment from the Fed pointed to rate hikes from the Federal Reserve Fund for 2023, easing fears of market inaction.
