The US stock market reacted positively to indications that the nation’s economy is finally back on track. With promising job figures, a revitalized services industry and an optimistic market, there are hopes that the economy could be back to normal after the ravages of the Covid-19 pandemic.
It’s been a spectacular month in US stocks with the market being boosted by an impressive 2%. Much of this has come from the return of several key sectors such as hospitality that were particularly hard hit by lockdown measures across the nation.
With the lifting of many travel restrictions such as international flights into the US, it has meant that airlines such as Delta are seeing the welcome return of sold-out flights. In addition to this, the live event operator LiveNation saw its share price skyrocket by 20% in just one week, while cruise ship brand Royal Caribbean also reported a healthy rise in its stock value.
Bellwether markets such as US car sales also reported a boost after what has been a difficult summer and the services sector is looking as though it could be ready to return to business as usual. It’s also been a positive week for the US workforce that looks to finally be getting back to its best after a fairly dismal year. Last month saw the creation of half a million new jobs and unemployment rates dipped below 5% to defy most analysts’ expectations.
All of this has been made possible thanks to the ongoing Covid vaccination measures across the country. With hospitalization rates reduced by a staggering 90% as a result of antiviral drugs, there is hope that the US has turned the corner on the pandemic.
Further problems to overcome
While the prevailing mood is one of optimism, the US economy still has a few hurdles to overcome before it truly gets back on track. First of all, many firms are still struggling with the supply chain crisis. Major tech brands such as Apple have seen their production rates hit hard by problems in obtaining certain kinds of computer chips. All of which has the capacity to hit retail figures at a time when most businesses will be doing all they can to maximize sales from the festive season.
Such issues have been compounded by soaring oil prices along with further problems exacerbated by effects from the pandemic. Plus with US inflation rates rising from 4% in September to 4.6% in October alone, it means that there may be further headaches ahead for the US economy.
President Biden recently introduced a $1.2 trillion infrastructure plan that aims to remedy any short-term issues and spur on the economic revival. Plus there remain big decisions ahead for the Federal Reserve as it aims to pull back the financial assistance that it has been supplying hard-hit businesses. But with the potential for any number of new variants of Covid-19, it’s going to be an uncertain few months.