Whether you call it a reopening, a recovery or a restart, one truth remains: the U.S. economy is on track for its best GDP growth in years.
This may be hard to believe, especially when you consider where we were at this time last year. On March 11, 2020, the World Health Organization (WHO) declared the coronavirus outbreak a global pandemic. Countries around the world closed their borders and instituted lockdown restrictions, including the shuttering of schools and businesses. In turn, economies slipped into recession.
Here in the U.S., first-quarter 2020 GDP slipped 5% and then plunged more than 31% in the second quarter. GDP rebounded impressively in the final two quarters of 2020, with thirdquarter GDP soaring more than 33% and fourth-quarter GDP climbing 4.3%. Still, the U.S. economy contracted at a 3.5% rate in 2020, or the biggest decline in economic growth since World War II.
Unfortunately, the U.K. and most European countries have yet to rebound from the economic woes of 2020. Europe has faced yet another wave of rising COVID-19 cases, which led to more lockdown restrictions in hard-hit economies like Italy.
As a result, Europe is in the midst of a double-dip recession. GDP in the Eurozone declined at a 6.9% annual rate in 2020, with negative growth in the first two quarters and final quarter of the year. Fourth-quarter GDP dipped 0.7%, and it is now forecast to drop 0.8% in the first quarter of 2021. I should also add that the U.K. experienced about a 10% contraction in GDP growth in 2020, marking its worst recession in more than 300 years.
Clearly, there’s a long road ahead to recovery for many European countries.
The good news, though, is that the U.S. economy is on much firmer ground than its European peers. In fact, the Atlanta Fed expects first-quarter 2021 GDP growth of about 8.3%. Many economists are also forecasting around 6% to 8% GDP growth this year. China is also expected to achieve 8% or more GDP growth in 2021 after posting 2.3% GDP growth in 2020.
Of course, for the U.S. economy to be firing on all cylinders, we need an increase in consumer spending. As you may know, consumer spending accounts for nearly three-quarters of total U.S. GDP growth, so an increase in retail spending is the key to the U.S. economic recovery.
Thankfully, Americans are gearing up to open their wallets in the coming months.
The Commerce Department recently reported that retail sales surged 9.8% in March, thanks mainly to the $1,400 stimulus checks that hit many Americans’ bank accounts in March.
Economists were only expecting retail sales to rise 6.1% last month. Retail sales have now soared about 28% in the past year, a very positive sign for the U.S. economic recovery.
The fact of the matter is the $600 stimulus checks in January, as well as the most recent $1,400 stimulus checks, have ignited a wave of consumer spending. Many economists are now betting that April retail sales could also show significant growth. The lifting of COVID-19 restrictions across the country and warmer weather should also boost Americans’ mood and inspire many to get out and spend.
The bottom line: the U.S. economy is heating up—and savvy investors could profit immensely from the recovery in the upcoming months.
In this special report, the experienced team at Navellier & Associates will share their insights and research into the U.S. economic recovery and pinpoint the areas of the market directly aligned to prosper in the new environment. The talking heads on Wall Street would have you believe that there are three main trends where your money should be invested.
But they’re wrong.
I’m proud to announce that my team of analysts and I have just completed our latest round of market research.
After countless hours of analyzing economic, industry, and company data, we have come to several conclusions that we feel individual investors could benefit from today.
The talking heads on Wall Street won’t be happy with this research, but we’re here to reveal the truth.
Some of the top industries being endlessly touted in the media could present significant volatility and risk for unsuspecting investors.
Download our report to get:
- Our insights and research into the U.S. economic recovery.
- The name of the industry with a recent major IPO that has an unbalanced risk/reward ratio.
- The details on another industry that investors are pouring into without considering that taxes may significantly stifle growth opportunities.
- Everyone wants to “go green” but investors are overlooking the industry that is expected to surge by more than $37 billion over the next five years.
- PLUS, the 5 trends that we believe could see the biggest inflows in 2021