The U.S. economy outshone expectations by showing a fast-paced recovery since the holiday season’s onset. The decline in serious COVID-19 cases and mass hospitalization, and stealthier economy-building measures can be seen reflecting their effect.
The data released by Economists yesterday showed healthy growth in the 3rd quarter, the pace was increased in October and November, after a sluggish September. Due to these releases, many leading advisors from prestigious financial institutions such as Morgan Stanley, Federal Reserve Bank of Atlanta have revised their predictions for their estimated GDP growth.
As long as the cases of the virus stay in a declining phase, the year is expected to end on a strong note. The indicators which help the economists be bullish are many, such as a decline in the jobless claims, and a strong 3rd quarter GDP.
Although a variety of ways can be put to work to calculate GDP growth, the most accepted method involves computing which is based on spending on goods and services. US Bureau of Economic Analysis (BEA) estimates that the economy grew by 2.1% in the latest quarter.
Through another method of computation as released by the bureau suggests that the growth based on Gross Domestic Income (GDI) which involves incomes of persons and corporates, outgrew last year’s numbers by 7.6%, and had a growth much faster than the GDP.
Jason Furman, a Harvard economist, calculated the new GDI figure to mean a 4.4% growth in the 3rd quarter, which was double the figure shared by the BEA.
Another factor indicating a strong economy is last week’s data on claims for aid by the Jobless. The figures fell to a 5 decade low, hinting positively. Employers are reluctant to lay off workers and employees, given the acute labor shortage which is looming in the market.
The higher inflation although has been a problem, companies and consumers are both shelling out more from their pocket, be it on equipment, or perfecting their supply chains, etc.