There are ample reasons to be optimistic about where the economy is headed, if you look past the near-term wobbliness and pay close attention to the data that have been trickling in lately. It’s reasonable to think that by the 2021 holiday season, the long-predicted Biden boom will really be roaring, and the economic pain of the coronavirus crisis will finally be behind us. Here are seven reasons why.
Reason 1: Much of the Country Is Getting COVID Under Control
You can’t talk about the economy without talking about the pandemic, and there’s mixed news on that front.
But even with the virus’s recent uptick, the country is still averaging close to its lowest number of daily cases since March 2020. Cases are down or flat in 21 states and the District of Columbia, while deaths and hospitalizations are both still trending down nationally. Three states—Massachusetts, Maryland, and Vermont—are now seeing fewer than one new infection per 100,000 residents each day, putting them on track to contain the virus and halt community spread, and several others are getting close to that threshold. And because vaccination rates are much higher among the elderly, who are generally most at risk from COVID, future outbreaks should be far less deadly than in the past (which is good, because it frankly seems unlikely any states are ever going back into a lockdown). America’s prognosis isn’t improving across the board. But in much of the country, especially heavily vaccinated blue states, the pandemic is finally coming under control even as normal life resumes.
Reason 2: The Worst of Inflation Might Already Be Behind Us
While the debate about it might burn on for a while, inflation may already be starting to cool off, as Paul Krugman recently argued at the New York Times. Much of its recent spike was driven by surging prices in just a handful of industries such as used cars that appear to have peaked. The cost of crucial commodities such as lumber has come back to earth. And on a month-to-month basis, inflation rose more slowly in May than April.
Reason 3: Consumer Spending Is Up—and Should Stay Up
The United States is still down about 7.6 million jobs, but you’d never guess it from the amount of shopping people are doing these days.