President Joe Biden announced on Wednesday in his address to the Congress that “America is rising anew” on the verge of defeating the pandemic, according to the Associated Press. This proves to be true given the growth in the economy in the first quarter of 2021 and the positive economic outlook outlined by the federal reserve.
The Gross Domestic Product, the measure of goods and services made in the U.S., rose 6.4% seasonally adjusted annual rate in January through March, according to the Department of Commerce. Additionally, the unemployment rate has fallen to 6% since the fall of last year. This puts the world’s largest economy just a little bit below pre-pandemic levels.
Federal stimulus money and vaccinations have contributed to the growth in output. In the spring, most households in the U.S. have received a stimulus payment of $1,400 which they have used, in addition to the money they saved by not traveling and not eating out, to buy a range of big-ticket goods and services. Also, the rate of vaccinations increased with the succession of Joe Biden to the presidency, which contributed positively to the GDP.
Within the same ideology, the federal reserve kept its interest rate to near zero to lower borrowing costs such as interest rates on mortgages and loans.
Experts anticipate the U.S. economy to grow more in the second quarter and remain steady in the second half of the year.
Canada has had the same philosophy since the beginning of the pandemic. Keeping interest rates at low levels and getting money in peoples’ hands will in turn contribute to the economy, all while getting people vaccinated. However, the U.S. has surpassed Canada in the number of vaccinations. As of the date of this post, 30% of the population in the U.S. has been fully vaccinated while Canada lags at 2.8%.
If the world's largest economy is on the verge of overcoming the pandemic, what does this mean for other economies? Share your thoughts in the comment section.
Resources that might be helpful:
Study: Doubling Vaccination Rate Could Spark Employment and Boost GDP: https://www.usnews.com/news/economy/articles/2021-03-02/study-doubling-vaccination-rate-could-spark-employment-and-boost-gdp
Referenes:
1) The Associated Press. (2021, April 29). Biden declares 'America is RISING anew' in address to congress marking 100 days in office. Retrieved May 01, 2021, from https://www.cbc.ca/news/world/biden-address-to-congress-1.6006342
2) Holder, J. (2021, January 29). Tracking coronavirus VACCINATIONS around the world. Retrieved May 01, 2021, from https://www.nytimes.com/interactive/2021/world/covid-vaccinations-tracker.html
3) Mitchell, J. (2021, April 29). U.S. economy Grew robustly in first quarter. Retrieved May 01, 2021, from https://www.wsj.com/articles/us-gdp-economic-growth-first-quarter-2021-11619658605
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