The Indicator from Planet Money - 2021: The Year Of The Recovery?

2020 was a horrific year for the economy. We're hoping 2021 will be better, but will it? We discuss 3 indicators that suggest this year is shaping up to be better than last year.

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Hey mon station Cardiff. This is the indicator from Planet Money on the show. It is time for a health check two months into 2021. How is the US economy doing? I mean at the end of last year, everything was really uncertain economy was in terrible shape and economic growth was slowing down but vaccinations for covid-19 Ali started and at the end of December the government passed another Aid in stimulus bill. So with February almost over we wanted to ask how things started looking up.

Yes is the answer. Yes, I mean, it's just it feels like for the first time in months. There's actually this slate of positive hopeful macroeconomic news to share. It's kind of exciting to be honest with you. So exciting that you couldn't even wait till after the break but I understand I understand it's nice to get a little good news. I mean, it's been awhile, right? I was thinking we could change our name to the sanguine Decatur. What do you think? Let's do it and added the rig we will take a look at 3 bench, press that we've noticed. I was doing how the economy has improved since the start of the year.

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Okay, 3 hopeful economic trends that we've seen since the start of the Year. Here we go. Turn number one. Suddenly people are spending money again. A lot of money retail sales. This is basically sales of everything you can buy from the store or from an online seller jumped about 5% in January that increase was 5 times bigger than Economist had expected January was also the first month since last fall that people had increase their spending on all these things. It was across the board people spent more money in every single retail category from furniture to books gas clothes and maybe most surprisingly in January people also started spending a lot more money at bars and restaurants 7% more than they had spent in December 1st increase in months. And the reason might be that Kobe cases started falling in January or that more people were getting vaccinated or because some parts of the country allowed more re-openings of bars in

Restaurants whatever the case people became more comfortable eating and drinking out watching to see if this unexpected spending boom that we started the year with will continue. It will be a huge deal. If it does since roughly two-thirds of the US economy is based on consumer spending. Number one, people are spending more money again, thank windicator. Number one and number two the lives of some of the most economically vulnerable people in the country have started to improve every couple weeks the government runs a big survey that launched specifically to keep up with Trends in the pandemic and the survey asks adults in the US whether or not they have had enough food to eat in the previous 7 Days in other words, if they've gone hungry the latest results were released yesterday and compared to what the survey was showing us back in December more than 5 million fewer adults in the country reported going hungry and the likeliest explanation. Is it the Moon?

Play from the government's latest stimulus bill, which was passed in December head reached families who use that money to buy food that build. You'll recall included an extra $300 a week for people who lost their jobs plus $600 checks for people who make less than a certain amount of income each year by the way up. There are still a lot of people about 24 million adults who say they have recently experienced hunger that is more than before the pandemic but at least this indicator is moving in the right direction and so have other indicators from that same survey of households. Here's one that we think is especially important tasks. Do you believe that either you or someone in your household will lose income because of the pandemic within the next four weeks and loss of income could come from losing your job or from taking a pay cut for example back in December 31% of people said, yes, they worried about losing income and now it's down to 23% and that is a massive decline to put this in context. That is almost

20 million fewer people expecting their household to lose income within the next month. So it makes sense that people feel more confident spending money. They are not as worried that they're going to have less money to spend in the future and the third and final Trend. We've been watching windicator number 3 since the start of the Year financial markets have increasingly been betting on faster economic growth in the future and that may sound like it doesn't matter who cares what stocks or whatever or doing. But remember this reflects people and businesses and investors putting real money on the line based on their belief that the economy will improve the stock market the housing market the market for the bonds that company sell and the market for u.s. Government treasuries. They have all been signaling that faster growth is coming for the US economy and all of these are great. But we have kind of a new favorite in Decatur St. Queen Decatur that we have been watching that is the price of copper copper is a commodity a metal that's necessary for a

Lot of different things all across the economy. It's used in electrical equipment construction materials big industrial gear. That kind of stuff is really needed when the economy heats up the price of copper shoots up because it is in demand that is a sign that people and businesses are suddenly expecting a lot more economic activity. There's going to be more construction more electricity being used more factories running not just in the US but around the world copper is sometimes in formerly referred to as Doctor copper copper has its own PhD in economics has its price helps predict changes in the economy. Is it too late to call you Doctor copper card if I'm going to start referring to you as dr. Vanek Smith and if that's the case, yes, I will take it under and PhD, but that's where sing with Decatur just this month alone. The price of copper has climbed more than 18% and that is a massive increase and even though

There is no indicator that perfectly predicts the future. This one is pointing to really brighter days ahead. So there you have it three hopeful signs of the economy is picking up speed people are spending their money again, the economic benefits of recently started reaching the most vulnerable households and financial markets are betting that there is more to come and we should say Cardiff that as much as we've enjoyed finally having these positive Trends report. We should also emphasized that the economy is still objectively in a bad place. There are roughly 10 million fewer jobs. And there were before the pandemic a lot of economic activity has been reliant on government Aid and stimulus bills and third does appear to be another bill on the way but even so there are entire industries that have been decimated by the pandemic bars restaurants hotels Entertainment Sports theater industries that depend on more progress in fighting the pandemic itself getting people vaccinated reducing the number of daily.

Open cases not just on people having more money to spend and being more willing to spend it very true. But because it's been such a tough past year for the economy for at least as one episode. We wanted to share something good since we finally had something good to share something Queen Decatur is the rise of the indicator we can be fun. Yes, that's fine. But that doctor copper. He'll tell you get the life of every party invite him.

Speckled eggs for this episode to Joaquin fritzler of namira analytics for his number crunching about copper prices. This episode of the indicator was produced by Alexi Horowitz Ghazi. In fact check by Sam side edited by Jolie Myers and the indicator is a production of NPR.

I just had this image in my head of like like a magician or something. Like I am the sanguine Decatur. I don't know.
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