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Washington : The US economy is recovering faster than expected after the downturn caused by the outbreak of the Covid-19 epidemic last year, although some sectors are still affected.
Here’s a look at the status of the world’s largest economy.
The International Monetary Fund expects that the US gross domestic product will increase by 5.1% this year, after a contraction of 3.5% in 2020 due to the complete paralysis of the economy in the spring of last year due to the impact of the closure and quarantine measures to combat the Corona virus.
The nearly three thousand billion dollars in recovery measures approved by the government last year, including the $ 900 billion aid plan approved in late December, had a major contribution to the advancement of the US economy.
And Congress may approve a $ 1900 billion bailout that President Joe Biden announced in mid-January that will provide more support to businesses, families, and local and federal agencies.
This is what leads some economists like Gregory Daco of the Oxford Economics Institute to expect growth of up to 7%.
As for the President of the US Federal Reserve, Jerome Powell, he expects a growth of 6%.
As businesses reopen according to the restrictions imposed to contain the epidemic, the country has regained about half of the 20 million jobs it lost in the first weeks of the outbreak.
Many of the remaining 10 million jobs are concentrated in the service sector such as restaurants and hotels, which is most affected by the health crisis.
Black workers and descendants of Latin America were hit the hardest.
As for millions of other employees, they suffered from reducing the number of their working hours, while others left the labor market, including a large number of women, due to the closure of schools.
And these jobs are not expected to return until Americans gain group immunity.
The official unemployment rate rose in January to 6.3 percent, far from the 3.5 percent rate recorded in the same month last year. As for black workers, the rate was 9.2%.
But if we add to the unemployed people who have stopped looking for a job or who work part-time and seek a full-time job, then the percentage reaches 11.1%.
And economic expert Diane Swonk of Grant Thornton said that “assistance and recovery are essential … to contain job losses and start the engine to achieve a stronger economic recovery when social distancing measures are lifted.”
According to Moody’s Analytics Office estimates, Biden’s plan to revive the economy will generate 7.5 million jobs this year alone.
The real estate sector was strong before the pandemic, only faltering for a while before recovering and seeing greater vitality than before.
The sale of new and old homes recorded an increase of nearly 20% compared to its level before the crisis, supported by lowest interest rates on mortgage loans and the spread of remote work that pushed people to leave crowded areas.
However, supply declined as activists in the construction sector could not keep pace with demand, which led to higher prices and excluded low-income families.
And if consumers were forced to limit their activities, then they doubled their purchases of cars, electronic products, and furniture to what is there. Online retailers were the biggest beneficiaries, with sales increasing nearly 30% in 2020.
The impact of the economic downturn is evident in the fields of travel, hotels and entertainment, sectors that will not recover until people return to theaters, cinemas and music shows or take a vacation.
But economists warn that the crisis could have lasting economic effects.
Thousands of stores and restaurants were permanently closed, and there is a risk of a wave of bankruptcies if there is not a rapid recovery for a number of companies facing heavy debt burdens.
As for local governments, which generally cannot borrow to finance their operations, they are faced with a dilemma between canceling the jobs of professors, police officers and firefighting agents to compensate for the huge expenditures to contain the health crisis, or maintain these jobs.
Landlords and tenants are currently benefiting from a suspension of evictions and seizures on foreclosed properties, but this moratorium will not continue indefinitely.
“We must continue to provide economic support to our citizens and build a bridge that leads us to the end of the epidemic,” Treasury Secretary Janet Yellen declared this week.