The U.S. economy is on the brink of a dramatic year of growth as the COVID-19 pandemic fades into the background. But some sectors of the economy are doing better than others, according to Sara Eisen, co-host of CNBC’s “Closing Bell.”
Eisen gave her views on the 2021 economic out during an Insured Retirement Institute webinar moderated by Chris Grady, executive vice president and head of distribution with Athene.
The labor market is still a pitfall toward growth in 2021, Eisen said, with 550,000 Americans filing for first-time unemployment claims last week. This is still more than double the number who filed pre-pandemic. Eight million Americans are still out of work.
“Those numbers are stubbornly high and reflect a lot of pain out there,” she said. “We are having a K-shaped, or uneven, recovery. It is different for every sector, every income level, every race and gender.”
Some sectors are booming while others are lagging, Eisen said.
Housing and manufacturing are off to a roaring start, especially as more members of the millennial generation reach the prime age for buying their first homes. Travel is the next economic sector poised to return to normal. However, business travel and conferences as well as concerts and sporting events still lag. Employees who have been working from home for the past year also have been slow to return to the office, which has an economic effect on everything from commercial real estate to restaurants that cater to the lunch crowd.
The global economy is another economic risk factor, Eisen said. Although the U.S. is making a comeback, Europe is behind. European nations have been slow to get their people vaccinated and European governments have not pumped trillions into the economy as the U.S. has. China also is coming back, but India is an economic and humanitarian disaster.
Inflation could put the U.S. economic comeback at risk as well, she warned.
Eisen said the Federal Reserve plans to keep interest rates at rock bottom levels through 2023. But there is a lively debate about whether the Fed should be thinking about tapering. The U.S. economy is expected to grow by 13% in the second quarter of 2021.
“But the speed of the recovery in the U.S. is happening so fast that it raises some serious questions about whether we face more dangerous inflation where Fed would have to step in and raise interest rates and kill the recovery,” she said.
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.
© Entire contents copyright 2021 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.