By Isaac Cohen*
At the start of the summer there was justified optimism about the economic recovery in the United States. Increased vaccinations, together with less contagion, hospitalizations and deceased, indicated the virus was receding. Additionally, two solid months of new job creation, 962,000 in June and over a million in July, were evidence that the economy was regaining strength, while employers complained about hiring difficulties. Amid such a positive outlook, the main question was when the central bank would begin to wind down the support it has provided to the economy through asset purchases and zero interest rates.
True, by mid-year the Delta variant of the virus was spreading in the United States and contagion was increasing among the unvaccinated. Meanwhile the August slowdown in new job creation, to only 235,000, revealed that most of the losses were in person services. For example, there was no job creation in the leisure and hospitality sector, indicating less willingness to go out by consumers, while the cut of 28,500 jobs in retail indicated less demand. Still, the unemployment rate was down to 5.2 percent in August, from 5.4 percent in July, while 5.2 million persons remained unemployed. Therefore, “we will get back to economic health when we get past the virus,” said Cecilia Rouse, chairwoman of the White House Council of Economic Advisors (The New York Times 09/10/21).
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.