Comebacks: America’s specialty
America – the epitome of resilience. Such hardiness is woven in our DNA and represents the toil and sacrifice of our forbearers and current generations. Revolutions, pandemics, wars, recessions and scores of tribulations – this country has seen virtually everything. However, every time we have swiftly recovered. After COVID-19 hit our shores and upended our way of life, economic pundits had dire projections for the U.S. economy – high unemployment rates, low consumer confidence and massive mortgage defaults. Our entrepreneurial nature and individualism quickly caught up with our new reality. That is, we had to re-think business, personal interactions and short and longterm planning. Fast forward a few months, the U.S. housing market has been experiencing a powerful rally, and home sales in September were up significantly from last year.
Furthermore, according to the U.S. Census Bureau, retail and food services sales for September 2020 were $549.3 billion, which is 5.4 percent higher than September 2019. Total sales from the July 2020 to September 2020 period increased 3.6 percent from the same time last year.
Moreover, during the years preceding 2020’s first fiscal quarter, the American economy experienced significant growth and expansion. GDP had achieved strong figures in 2018, and the economy continued to expand in 2019. Unemployment rates for January and February in 2020 were 3.6 percent and 3.5 percent respectively. These are exceptional figures given that 4 to 5 percent unemployment is generally regarded by economists as full employment. At the end of 2020’s first fiscal quarter, COVID-19 resulted in an artificial shutdown of commerce and industry across the country. At the same time, the Federal Reserve’s Open Market Committee (FOMC) lowered the federal funds rate to 0 to 0.25 percent. This change decreased the borrowing rate for many consumer products like credit cards, auto and personal loans. Additionally, the CARES Act served as a buffer during the harshest months of the pandemic when non-essential services were shutdown.
Today, the economic landscape ahead is looking hopeful. The unemployment rate for September came in at 7.9 percent down from 8.4 percent in August, 10.2 percent in July and 14.4 percent in April – the highest unemployment rate for 2020 during COVID-19. Even though 7.9 percent is still a bit high, the trend is on track to deliver more employment and better GDP numbers for 2020’s last quarter. The Federal Reserve has also signaled rates would remain stable for a while in order to help our country recover.
Marshalltown – the U.S. economic machine is wide awake and the American people have proven time and again that we can defeat anything that comes our way, and this situation is no different.
Carlos Jeer is the economic development director for the Marshalltown Chamber of Commerce.