Whether you’re a financial pro or an average Joe, chances are you’re thinking about the economic outlook for 2021. While no one can completely predict the future with accuracy - apart from taking a lucky guess - there are various factors one can look to as indicators of what lies ahead.
The following are five economic indicators which experts and amateurs are likely to consider as we approach the new year:
A stalled stimulus
Millions of American households were able to benefit from an initial financial stimulus package passed in early 2020. However, the Senate and House of Representatives have failed to get a much-needed second stimulus bill passed, putting the matter on hold until further notice. For families experiencing financial difficulties, the stalled talks are a slap in the face. Instead, Americans in need are applying for Missouri based installment loans, seeking mortgage refinancing in Michigan, and filing for bankruptcy in Alabama. The same goes for those in the other 47 states. It’s a stressful situation contributing to a pessimistic outlook about the future of the economy.
The Dow takes a dip
It’s often said that the economy is not the stock market and vice versa. While that’s an accurate observation, many people continue to base their opinions about the economy on how Wall Street is doing. Since the markets have done poorly in recent days, more folks are feeling anxious about the economic outlook for 2021. With that said, people need to put things in perspective. The stock market saw a much worse dip earlier in the year, followed by a steady rebound. The recent hiccup is unlikely to be a real indicator of how the economy will look in 2021, just a perceived one.
Trade talks go nowhere
The United States has been engaged in a trade war with China for years. All the while, taxpayers are footing the bill for subsidies paid to farmers and others financially impacted by the disagreement. With no end in sight, experts and everyday folks are losing faith in the idea of there being a positive outcome. Most people think it’s been a colossal waste of time and money, adding to their existing financial anxiety and concerns about the economy.
The housing market defies expectations
Now for some good news. While the United States economy has a tradition of dragging the housing market down with it every time there’s a recession, that hasn’t been the case this time around. Whether you’re an aspiring homeowner or already are one, the housing market’s strength is a source of relief. And if you’re an economist or financial advisor, it signals the likelihood of better days ahead for the economy going into 2021.
Everyone is worried about 2021
Despite the uplifting news about the real estate market, people remain generally worried about what 2021 holds for themselves, society, and the planet. Will a vaccine for COVID-19 be developed? Are current social distancing measures going to be enforced for the majority of the year? Will those currently unemployed due to the layoffs of 2020 return to work? Does the man who gets sworn into office in January have a solid plan for helping get the country back on track?
All these questions and others have people sweating bullets. Who can blame them? With that said, let’s remember to take deep breaths and remind ourselves of the indicators pointing to better days ahead.
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