WHAT A DIFFERENCE 6 MONTHS MAKE
As the U . S . looks for a robust economic recovery throughout 2021 , the country faces challenges in worker shortage , inflation , and foreign nations ’ vaccination efforts .
At the beginning of the year , my annual outlook included some wisdom from baseball ’ s famous philosopher , Yogi Berra , that still makes economic sense , including “ It ain ’ t over until it ’ s over ” — especially after looking at 1H2021 fiscal and monetary policy . Congress is proposing even more stimulus legislation later this summer via an infrastructure bill , despite a record 8.1 million job openings and a drop in the unemployment rate from 14.8 percent in April 2020 to 5.8 percent June 2021 , according to the U . S . Bureau of Labor Statistics . Additionally , the U . S . Federal Reserve is still engaged in a near-zero interest rate policy and $ 120 billion per month in bond purchases . Coming into 2021 , I advised commercial real estate professionals to keep an eye on two macro-events and three forward-looking metrics .
The two macro-events were the resolution of the November 2020 elections — particularly the runoff elections in Georgia for two Senate seats to decide control of the upper chamber — and vaccination rates . Regarding the first event , we know the November 2020 elections are still a source of debate and divide that only time and future elections will hopefully resolve . In the interim , the stock market isn ’ t rattled , as evidenced by more than two-dozen new highs in the first half of 2021 . With regard to vaccinations , a lot has been accomplished , enabling 49 of 50 states to reopen with resumption of normal economic activities , while Hawaii waits until 70 percent of its population is vaccinated .
The three metrics I recommended in January to gauge whether economic normalcy could resume in 1H2021 were vaccination rates according to Becker ’ s Hospital Review , the Transportation Security Administration ’ s passenger count , and Kastle ’ s Back to Work Barometer .
Vaccination Success . In January 2021 , most states struggled to receive sufficient vaccine doses to inoculate residents , and the logistics to administer the doses in the respective states wasn ’ t what could be deemed a success . Fast-forward to June 2021 and compare the dosage rates to the first week of January . The percentage of distributed doses improved measurably from a range of just 18 to 31 percent to 77 to 88 percent . Overcoming the vaccination logistical hurdles enabled the U . S . to achieve a fully vaccinated ratio of 50 percent , with 65 to 75 percent achievable before the onset of the 2022 flu season . In my annual outlook , I prognosticated that a vaccination ratio of 50 percent or more would lead to all states reopening and the resumption of a normal economy . That metric has been cleared .
Resumption of Travel . COVID-19 shed a light on how essential the travel industry is to our economy and overall GDP . According to the World Travel & Tourism Council , the travel industry accounted for approximately 11 percent of U . S . GDP in 2019 . In 2020 , though , the travel industry declined by 42 percent , to less than $ 700
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COMMERCIAL INVESTMENT REAL ESTATE MAGAZINE SUMMER 2021