When the Biden Administration passed the American Rescue Plan in March, the idea was to give Americans a break, in the latter days of the pandemic. But the idea was also to stimulate and improve the economy, by giving Americans money to spend would improve economic output.
Did it work? The Washington Post looked at that question this week.
“The coming spending tsunami is expected to lift the U.S. economy to its fastest growth rate since at least the early 1980s, but it’s unclear how long it will last,” the newspaper said of the spending brought about by both the stimulus and a spring and summer with fewer restrictions in place as the pandemic recedes.
The newspaper saw several indicators of an improving economy.
“Hiring is picking up rapidly after backsliding in December. Hunger is decreasing. The number of families behind on rent fell by more than 2 million in March,” The Post said. “The widely tracked S&P 500 stock market index has notched at least 21 records since Biden took office, the most seen by any president in his first 100 days since John F. Kennedy. And business optimism is rebounding in both the manufacturing and service sectors, albeit from low levels.”
In addition, retail sales boomed in March, rising 9.8 percent, which was well ahead of analyst expectations. The sales also jumped 26.9 percent from the same month the year before, when they were unusually low due to the original onset of the pandemic. The economy also added 916,000 jobs in March, the most in seven months.
The newspaper also said that last October, economists expected the economy to grow by 3.9 percent in 2021. By this month, that expected number jumped to 6.3 percent, although the October figure arrived prior to the approval of vaccines.
“It’s really the stimulus that’s made the difference in the economic recovery,” said Nela Richardson, chief economist at payroll processor ADP, told the Post. “We’re going to celebrate a lot of good economic data.”
Multiple experts told the Post that getting to herd immunity will play a major role in whether the economic recovery is sustainable.
“GDP has come back. This is an incredible achievement considering many forecasters did not anticipate this happening until late 2022. Unfortunately, the labor market is still lagging,” Joseph LaVorgna, chief U.S. economist at Natixis, told the newspaper.
Biden is expected to address the next phase of the economic recovery, as well as coming legislative priorities that include both infrastructure and his American Family Plan, at his address to a joint session of Congress on Wednesday. The address is timed to coincide with Biden’s 100th day in office.
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.