Thursday, July 29, 2021

G.D.P. Growth

Following-up, "Gross Domestic Product, Second Quarter 2021, Grows 6.5 Percent."

Here's the take, at NYT, "Growth Is Strong, but the Obstacles to Full Recovery Are Big."

Plus, "Economy Recovers Pandemic Losses, but Faces New Test":

The U.S. economy climbed out of its pandemic-induced hole in the spring as vaccinations and federal aid fueled a surge in consumer spending at restaurants, resorts and retail stores.

The revival brought gross domestic product back to its prepandemic level in the second quarter, adjusted for inflation — a remarkable achievement, exactly a year after the economy’s worst quarterly contraction on record. After the last recession ended in 2009, the G.D.P. took two years to rebound fully.

But the rise of the Delta variant of the coronavirus could threaten those gains just as the federal aid programs that helped bolster the recovery are coming to an end.

Gross domestic product, the broadest measure of economic output, grew 1.6 percent in the second quarter of the year, the Commerce Department said Thursday, up from 1.5 percent in the first three months of the year. On an annualized basis, second-quarter growth was 6.5 percent.

Robust investment in the quarter signaled that businesses were betting on continued growth. But the recovery is far from complete. Output is significantly below where it would be had growth continued on its prepandemic path, and other economic measures remain deeply depressed, particularly for certain groups. The United States has nearly seven million fewer jobs than before the pandemic. The unemployment rate for Black workers in June was 9.2 percent.

“The good news is, this is all occurring much more rapidly than after the financial crisis,” said Diane Swonk, chief economist for the accounting firm Grant Thornton. “The bad news is, the pain was much worse.”

For Sarah Ladley, the economy’s spring reawakening was a glimmer of hope after a brutal year for her business.

Ms. Ladley, 33, started selling banana-based frozen treats out of her Denver food truck nearly a decade ago, just after she graduated from college. The pandemic nearly wiped her out: She made it through last year with the help of a loan through the Paycheck Protection Program, but the business lost money. With pandemic restrictions still in place early this year, she began looking for another job to pay the bills.

Instead, the phone began ringing with people looking to hold events.

“All of a sudden in May, it was like the floodgates opened,” she said.

Now Ms. Ladley has a different set of problems. Business has rebounded, though not all the way, and she is having trouble fulfilling demand. She had to change the cups she uses after a vendor ran out, stores will sometimes be out of the fruit she needs and she has struggled to hire workers amid competition from businesses that can offer higher pay and year-round employment. She says she has had to turn away business to avoid burning out her limited staff.

“Things definitely aren’t normal, but even if they were normal, I wouldn’t be able to handle it,” she said.

Well, better to have robust growth than horrible shrinkage, I guess. *Shrug.*

Still more.