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''' '' ECONOMY - U.S.
- ECLECTIC '' '''
A ROARING U.S. ECONOMY : The recovery in America remains uneven and rattled by a rare set of economic crosswinds. Inflation fears, Covid and ghostly downtowns are among the wild cards.
The American economy is growing at its fastest clip in a quarter-century - yet it remains far from normal, with some workers and small-business owners facing increasingly tough times while others thrive.
That divergence poses a challenge to President Biden, who has promoted the nation's economic recovery as a selling point in his quest to win support for a multi trillion-dollar spending agenda that could cement his legacy.
A summer that many business owners and consumers had hoped would bring a return to prepandemic activity has delivered waves of disappointment in key areas. Restaurants are short on staff and long on wait times.
Prices have spiked for food, gasoline and many services. Shoppers are struggling to find used cars. Retailers are struggling to hire. Beach towns are jammed with tourists, but office towers in major cities remain ghost towns on weekdays, with the promised return of workers delayed by resurgent coronavirus.
The University of Michigan's consumer sentiment index posted one of its largest monthly losses in 40 years in August, driven by the rapidly spreading Delta variant and high inflation.
The survey's chief economist, Richard Curtin, said the drop also reflected ''an emotional response, from dashed hopes that the pandemic would soon end and lives could return to normal.''
Mr. Biden and his advisers are confident that many of those issues will improve in autumn. They expect hiring to continue at a strong pace or even accelerate, fattening paychecks and powering consumer spending.
They remain hopeful that a reinvigorated labor market will take the place of the fading stimulus from the president's $1.9 trillion economic aid bill signed in the spring, and that the latest wave of the virus will not dampen growth significantly.
Last week, they released new projections forecasting that growth will hit 7.1 percent this year after adjusting for inflation, its highest rate since 1983.
Our perspective is one of looking at an economy that is growing at historic rates,'' Brian Deese, the director of Mr. Biden's National Economic Council, said in an interview.
But there is mounting evidence that the coming months could be more halting and chaotic than administration officials predict, potentially imperiling millions of left-behind workers as their federal support runs dry.
Private forecasters have pared back growth expectations for the end of the year, citing drags on spending from spread of the Delta variant and from the expiration of enhanced unemployment benefits on Monday.
Emerging research suggests that the end of those benefits might not immediately drive Americans back to the work force to fill the record levels of open jobs nationwide.
''People will be surprised at how much of the economy decelerates over the next year as the stimulus boost fades,'' said Jim O'Sullivan, the chief U.S. macro strategist for TD Securities.
Administration officials do acknowledge some potential hurdles. Some big city downtown may never return to their prepandemic realities, and the economy will not be fully ''normal'' until the virus is fully under control.
They emphasize that increasing America's vaccination rate is the most important economic policy the administration can pursue to accelerate growth and lift consumer confidence, which has slumped this summer.
''I don't want to put a timeline on this,'' said Cecilia Rouse, the chair of the White House Council of Economic Advisers. ''As we conquer the virus,'' she said, ''we will regain normalcy.''
The economy's rebound this year has been stronger than almost anyone predicted last winter, a result of the initial wave of vaccinations and the lift from Mr. Biden's stimulus bill.
Gross domestic product returned to its prepandemic level last spring, and retail sales have soared beyond their pre-Covid path.
Yet the recovery remains uneven and rattled by a rare set of economic crosswinds. In some sectors, consumer demand remains depressed. In others spending is high but supply constraints - whether for materials or workers or both - are pushing up prices.
The Delta variant of the coronavirus is already casting a shadow over the new school year, with some schools, including a middle-school in Fredericksburg, Va, temporarily returning to virtual learning amid new outbreaks.
The Honor and Serving of the Latest Global Operational Research on Economies and the State-of-the-World, continues. The World Students Society thanks authors Jim Tankersley and Ben Casselman.
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