The GDP gets a Side Hustle
For those of you under the age of 30 GDP stands for Gross Domestic Product and for those of you over the age of 30 a Side Hustle just means an extra parttime job besides your fulltime job.
You remember hearing the term GDC in school but in case you forgot it’s the total sales of a country from the small-town café to the mega-retailers and is used to gauge the strength of a country’s economy. The U.S. GDP is massive. It amounts to almost $22 trillion dollars. But the pandemic changed a few things and it is now getting new sources of growth, aka its new side hustle.
Just like a big ocean wave changes the landscape, the pandemic changed our economic landscape. The GDP is still finding its footing after being smacked in the face by the big wave of the pandemic. The GDP saw some areas that are normally strong get weaker but found some areas that were weak become strong growth.
The weaker than normal areas of the U.S. economy post-pandemic that stick out to me are the lower spending from state & local governments, spending on commercial buildings, and consumer spending on services such as medical physicians, home health care, vehicle maintenance and repair according to the Bureau of Economic Analysis (BEA).
The new side hustle or higher than the normal increase came from the federal government spending (no surprise there), spending on private homes, and consumer spending on food and beverages. Americans are still remodeling their houses and they are eating out and drinking much more than before the pandemic according to the BEA.
The pandemic has changed some things and only time will tell if the spending patterns will return to what they were before the pandemic. I’m pretty confident people will again start spending money on services and will eventually pull back on eating out so much. I don’t know if the spending on commercial buildings will go back to where it was anytime soon because of so many people working from home. I wouldn’t want to own a big city downtown office building right now.
Market-wise here are some upcoming things I am watching:
- Rising inflation and businesses having to raise salaries and prices.
- Fed Chairman Jerome Powell’s semi-annual congressional testimony (Happening as I write.)
- Most importantly, the debt ceiling deadline of July 31, 2021, is shaping up like what happened in 2011. In 2011, conservatives demanded policy changes in exchange for raising the debt limit which led stock prices to fall and the Standard & Poor to downgrade the U.S. debt rating. Congress doesn’t seem to be playing well together so this showdown could be interesting.
On that note, I thought about getting a side hustle, but I don’t know what a taste tester gets paid!
Have a blessed week!
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