FEBRUARY 10, 2021 08:09 AM (EST)
Best’s Special Report: Signs for U.S. Economic Rebound Encouraging Despite Lingering Uncertainty
|Ann Modica |
Economist, Credit Rating Criteria
Research & Analytics
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Manager, Public Relations
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FOR IMMEDIATE RELEASE
OLDWICK - FEBRUARY 10, 2021 08:09 AM (EST)
AM Best expects modest economic growth for the first half of 2021, followed by an acceleration during the second half as the roll-out of the COVID-19 vaccine facilitates the full opening of the economy.
In its Best’s Special Report, “2021: Transitioning to a New Normal,” AM Best states that risks to the economic forecast are related mainly to the persisting uncertainty about issues associated with the virus, such as new mutations; and whether enough people will take the vaccine to reach herd immunity. Other risk factors related to the pandemic include lingering damages to the economy and public sentiments—how quickly consumer and business behaviors will revert back to their pre-pandemic state once the United States returns to more-normal conditions remains to be seen.
According to the report, consumer spending has been the main driver of economic growth over the last decade, but the pandemic quickly reversed this as a lack of spending opportunities due to lockdown measures, job losses and a general bunker mentality suppressed spending. Consumer spending, which accounts for approximately 70% of economic activity in the United States, plummeted in the first and second quarters of 2020. The post-COVID environment may see the release of pent-up demand, and many consumers will be well-positioned to start spending again due to low levels of debt, a high savings rate and low interest rates.
Other highlights in the report include:
To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=305851 .
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.