As the COVID-19 pandemic comes to an end, consumers are already spending more in restaurants, hotels, and solons. As more consumers get vaccinated and businesses begin to reopen to full capacity economists are expecting a large surge in economic growth.
According to a survey conducted by The Wall Street Journal, economists are expecting to see an increase in GDP by 6.4% for the rest of 2021. This would be a 4% increase from pre-COVID data that was collected in 2019. Also, employment is expected to increase by 5% but it would still leave employment 1.6% lower than that of the fourth quarter in 2019. Employment is expected to increase even further as the year moves on, however, employers are cautious to hire people because of concerns of a possible resurgence of the pandemic. While vaccines are being distributed cases of COVID-19 are continuing to increase as well as possible variations of the virus may rise in prominence. Companies are also fearful that demand may not return to normal for several businesses such as those involved with travel.
Workers are also skeptical about returning to the workforce as the fear of contracting the virus remains a significant worry in the mind of Americans. In addition, with the recent $19 trillion COVID-19 relief package being distributed many have chosen to stay at home for the upcoming weeks. Employers are also concerned that since many have been out of work for so long some of the skills required for a specific job may have deteriorated.
While demand is expected to increase significantly for the rest of the year it may be difficult for businesses to keep up as Americans are still reluctant to return to the workforce.
Source: Bloomberg
