When Will the U.S. Economy Recover?
The U.S. economic recovery paused at the end of 2020, but it will soon be ready for liftoff.
The U.S. economic recovery paused at the end of 2020, as a third wave of the coronavirus pandemic caused a retreat from the return to normal activity. This is no indication that the recovery is finishing up for good, however. Once the United States achieves herd immunity and we reach the end of the pandemic, we expect the U.S. economy to take off like a rocket.
Consumers are eager to spend, but their options are limited currently by the need to social distance. Normalization of consumer behavior following mass vaccination will mean a snap-back of consumer services, driving an overall GDP recovery (including a full recovery in the job market). Households and firms alike are in good shape on average thanks to record stimulus in 2020 and another massive stimulus injection likely coming in 2021.
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