Delta Variant Sparks Concerns About What's Next For U.S. Economic Recovery

Delta Variant Sparks Concerns About What’s Next For U.S. Economic Recovery

NPR’s Noel King talks to Monica Boushey, senior economic adviser to President Biden, about how the pandemic is impeding America’s economic recovery, and how vaccinations will help.

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U.S. Economic Recovery Hinges on Oil & Gas Industry: Study

America’s natural gas and oil industry will need to serve as a vital driver of the nation’s post-pandemic economic recovery, according to a new study.

The industry counts as critical to every sector of the U.S. economy and supports millions of jobs across all 50 states, says a study by PricewaterhouseCoopers that compiles the latest available government data.

The 134-page study, which explores the economic impact of the oil and natural gas industry, found that the business supported 11.3 million jobs and contributed nearly $1.7 trillion to the U.S. economy in 2019.

The study authors reported that the impacts are the result of three channels:

​•​ Direct impacts from the employment and production within the oil and natural gas industry.

​•​ Indirect impacts through the industry’s purchases of intermediate and capital goods from a variety of other U.S. industries.

​•​ Induced impacts from the personal purchases of employees and business owners both within the oil and natural gas industry and its supply chain, as well as from the personal spending by shareholders out of the dividends received from oil and natural gas companies.

In addition to supporting well-paying jobs, the natural gas and oil industry, directly and indirectly, contributed an estimated $1.7 trillion to the U.S. economy in 2019, representing 7.9 percent of the U.S. gross domestic product.

Researchers found through wages, taxes, capital investments, and support to other industries, the economic impact extends beyond traditional natural gas and oil-producing states.

“Every state in the nation has a stake in continued access to U.S. natural gas and oil reserves, which are critical for the nation’s economic recovery,” the study authors wrote.

In short, as the nation continues to recover from the pandemic and the economic downturn that resulted, the natural gas and oil industry will serve as an engine for long-term growth.

“The industry continues to create good-paying jobs and deliver reliable American energy to enterprises, including health care, retail, manufacturing, education and more, in communities across the nation,” researchers concluded.

According to the findings, in 2019, the natural gas and oil sector directly and indirectly:

​• ​Supported more than 11.3 million total jobs or 5.6 percent of total U.S. employment.

​•​ Generated an additional 3.5 jobs elsewhere in the U.S. economy for each direct job in the U.S. natural gas and oil industry.

​•​ Produced $892.7 billion in labor income, or 6.8 percent of the U.S. national labor income.

​•​ Supported nearly $1.7 trillion to U.S. gross domestic product, accounting for 7.9 percent of the national total.

The U.S. Energy Information Administration noted that global oil and liquid fuels consumption is expected to surpass 2019 levels in 2022, as economic activity and travel patterns normalize.

“This represents an opportunity for the U.S. to meet the world’s rising demand for affordable, reliable fuels with homegrown natural gas and oil,” American Petroleum Institute President and CEO Mike Sommers wrote in an email.

“That said, America’s economic outlook depends on federal and state policy proposals that incentivize resource development, modernize energy infrastructure and streamline burdensome regulations,” Sommers wrote. “The nation’s hard-fought energy security and GDP growth are at stake, even as the natural gas and oil industry continues to drive the nation’s post-pandemic recovery.

“As America’s economy comes back, the natural gas and oil industry will serve as the foundation for long-term growth and prosperity,” he said. “Every state across the country — both blue states and red states — rely on American energy to fuel each sector of the economy and support millions of U.S. jobs. This study reinforces that America’s economic outlook is brighter when we are leading the world in energy production, and it serves as a reminder of what’s at stake if policymakers restrict access to affordable, reliable energy and make us more dependent on foreign sources.”

Click here to view the full report.

Economic Recovery Plans Essential in EU and Croatia to Delivering Inclusive and Green Growth that Shields Households at Risk of Poverty

BRUSSELS, July 26, 2021 – EU member states must ensure careful and efficient implementation of economic recovery plans that support inclusion and growth to bounce back from the worst impacts of the COVID-19 pandemic, says a new World Bank report.

The World Bank’s latest EU Regular Economic Report – entitled Inclusive Growth at a Crossroads – finds that the unprecedented and exceptional policy response of governments and EU institutions has cushioned the worst impacts of the crisis on employment and income. However, the pandemic has exposed and exacerbated deep-seated inequalities, halting progress in multiple areas including gender equality and income convergence across the EU member states. A further three to five million people in the EU today are estimated to be ‘at risk of poverty,’ based on national thresholds benchmarked before the crisis. By March 2021, more than two-thirds of Croatian households reported insufficient savings. The lack of financial cushions to weather the economic crisis has been more severe for women, low-income families, and residents in rural areas.

The report highlights that effective recovery programs can reinforce progress on the green and digital transitions underway across the region. With the crisis continuing to unfold, government support schemes and the rollout of vaccines in a timely manner will remain essential to bolstering the resilience of firms, workers, and households. Given the longevity of the crisis and the impact on the most vulnerable, many governments have opted to extend the duration of support throughout 2021.

“A green, digital and inclusive transition is possible if economic policy is increasingly geared towards reforms and investment in education, health and sustainable infrastructure,” said Gallina A. Vincelette, Director for the European Union Countries at the World Bank.

With an output contraction of 6.1 percent in 2020, the COVID-19 pandemic has triggered the sharpest peacetime recession in the EU. Governments will need to ensure targeted and active labor market policies are in place to support an inclusive recovery. The report highlights that special attention should be given to already vulnerable workers such as youth, the self-employed, and those in informal employment. These groups are more likely to face employment adjustments during the crisis and may face longer spells of unemployment or periods outside the labor force. In Croatia, EU funding will play a key role in supporting the recovery and building stronger foundations for higher growth in the medium run. The plan foresees bold reforms and investments to help Croatia recover from the crisis and deal with some of its longstanding structural issues that should increase country’s growth potential and accelerate the income convergence with the rest of the EU.

Women have been disproportionately impacted by work disruptions during the pandemic, particularly in the sectors facing the worst effects of the crisis. This was also highlighted in the 2020 Regular Economic Report produced by the World Bank, which found that at least one in five women will face difficulty returning to work compared to one in ten men. It has been harder for women to resume work due to the sectors and occupations that they are working in and because of the additional care burdens that have fallen disproportionately on their shoulders – a manifestation of increasing inequities in home environments. Looking ahead, Croatians, especially women and low-income earners are quite pessimistic about their financial situation in 2021 with the latest data showing that nearly 70 percent of the population believed their overall financial wellbeing in 2021 would not be any better than what they had last year. Therefore, a specific focus on those vulnerable groups seems warranted.

“As recovery takes hold, it will be important for carefully targeted and coordinated policy support to continue to mitigate the impact of the crisis, with measures increasingly targeted towards vulnerable households and viable firms. Policy makers will also need to strike a balance between helping those that need it most, while enhancing the productivity of the economy and keeping debt at manageable levels,” added Vincelette.

World Bank’s Regional Action in Europe and Central Asia

To date, the World Bank has committed more than $1.7 billion to help emerging economies in Europe and Central Asia mitigate the impacts of COVID-19. Since April 2020, around $866 million has been approved through new emergency response (MPA/Vaccines) projects. In addition, up to $904 million is being reallocated, used, or made available from existing projects and lending, including additional financing, to help countries with their COVID-19 response.

The World Bank’s Global Economic Prospects suggests that growth will be strong but uneven in 2021. The global economy is set to expand 5.6 percent—its strongest post-recession pace in 80 years. The recovery largely reflects sharp rebounds in some major economies.