The COVID-19 pandemic, combined with the government-mandated shutdown and the job-suppressing effect of the $600-a-week unemployment benefit, has caused a severe collapse in the U.S. economy. However, the economy is returning to an upward trend as states reopen, unemployment benefits end, more Americans return to work, and life returns to normal. There are signs that it could quickly return to its pre-pandemic boom. Here are the main indicators of U.S. economic growth.
1. Unemployment continues to decline
The U.S. unemployment rate hit an all-time high of 14.7% in the early stages of the COVID-19 pandemic, which coincided with a nationwide economic shutdown. Since then, however, the unemployment rate has declined for several months, most recently to 8.4%.
This is perhaps the clearest sign that the U.S. economy is on a full recovery track. More workers are returning to work as states continue to support the economic recovery.
2. Employment growth continues to accelerate
Unsurprisingly, job creation has increased while unemployment has fallen. 1.4 million new jobs were created in August and 1 million people returned to the labor force. Compared with July, the number of people on furloughs fell by about 7 million, while the number of temporarily unemployed fell by a third.
Average weekly wages increased by 5.2% compared to the same period last year. In addition, the number of "disappointed" workers fell by 130,000, or about 25%. The number of dissatisfied workers is now about the same as in 2017. There were 6.6 million job openings in July.
Increased job creation and an expanding workforce, coupled with a fall in the unemployment rate, suggest a booming labor market.
3. Start a new business
Around 350,000 new business registrations were filed in June 2020. However, in July and August alone, more than 1 million new companies were established. Business applications increased by more than 62%. Currently, the number of new company applications is higher than in previous years.
The development of new companies shows that entrepreneurs are optimistic about the outlook for the U.S. economy and are ready for a wave of a V-shaped recovery.
4. Producer and consumer confidence is growing.
Recently, the U.S. consumer confidence index rose for the third time in just four weeks. Meanwhile, business confidence in the US has returned to pre-pandemic levels, according to the Organisation for Economic Co-operation and Development (OECD).
5. The housing market is recovering
The housing market is also improving, another sign of a healthy economy. In mid-August, the National Association of Home Builders (NAHB) saw the housing market index hit an all-time high, repeating the previous peak in December 1998.
A national housing recovery is an important sign of healthy economic development and a rapid return to prosperity.
6. The Stock Market Returns to Normal
The Dow Jones Industrial Average and S&P 500 have actually returned to their pre-pandemic levels, while the Nasdaq both hit new highs in September. While the stock market recovered to pre-pandemic levels within six months, it took five years for the market to recover during and after the Great Recession of 2009. A fast-rising stock market is a strong indicator of investor confidence in the financial recovery.