EconomyThe US economy recovers with reopening, vaccines and government...

The US economy recovers with reopening, vaccines and government support

The United States economy showed signs of recovery in the first quarter of the year, after the reopening of economic activities, the advance of the COVID-19 vaccination and economic support for unemployment, by the Joe Biden government.

The GDP of the neighboring country to the north registered a growth of 1.6% in the first quarter of the year, unchanged from the calculation made a month ago, and a sign of the economic recovery underway after the crisis caused by the pandemic, reported this Thursday the Bureau of Economic Analysis (BEA).

After the annual contraction of the GDP of 3.5% registered in 2020, the report mentioned as causes of the rebound in the first quarter of 2021 “the reopening of businesses, and the continued response of the government related to the pandemic”, in reference to transfers direct cash and the reinforcement of unemployment benefits.

With progress in the inoculation campaign, and more than 50% of the US population fully vaccinated, a notable rebound in economic activity is expected in the second half of the year.

Unemployment benefits fall less than expected

Meanwhile, weekly registrations to receive economic support for unemployment fell less than expected and remain above the 400,000 barrier, a sign of a slower recovery in the labor market, according to data released Thursday by the Labor Department.

Between June 14 and 19, 411,000 people filed for unemployment benefits, a drop of 7,000 compared to the previous week, whose data was revised up.

Analysts had expected requests to drop to 380,000. The total number of beneficiaries of unemployment benefits also increases, to 14.8 million people as of June 5, according to data released Thursday.

Last week, the chairman of the Federal Reserve, the US central bank, Jerome Powell, had acknowledged that the recovery of the job market was taking “longer than expected.”

Lack of improvement in labor matters

The president of the Federal Reserve Bank of Philadelphia, Patrick Harker, said that the US economy as a whole is in good shape and recovering quickly from last year’s decline, but a big improvement is needed in the labor market.

Growth in the US economy “has returned strongly” and some metrics, such as consumption, housing and manufacturing, are now “extremely healthy,” Harker said.

“But even though GDP has almost fully recovered its losses from last year, employment continues to decline significantly,” Harker said at a virtual event.

While some workers have seen their income rise, there are still nearly 7.6 million fewer people in the job market than before the pandemic, he added.

US President Joe Biden, who has proposed a multi-million dollar plan to invest in infrastructure and social protection programs, has assured that US growth in 2021 could exceed 6% per year, something that has not happened in the past. country since the 1980s.

With information from EFE, Reuters and AFP.

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