More than a year after the COVID-19 pandemic hit the economy hard, economists are seeing a rebound.
"The economy is rebounding much more strongly than we could have foreseen even as recently as beginning of this year," said Greg McBride, Chief Financial Analyst for Bankrate.com. "There is a lot of positive momentum."
McBride, speaking to WPTV's Michael Williams on To the Point said the economy will probably grow at the fastest rate since the early 1980s.
The federal unemployment was at just under 6% for the month of June. McBride suggests the labor market will grow as more restrictions are eased. Right now he does warn of some worries because employers can't find enough employees.
"There is going to be some friction. There is going to be some head wind to economic growth," McBride said. "For example, if there is one person behind the counter at the sandwich shop instead of two and the line is now twice as long some people turn around and walk out the door. There are going to be some obstacles to that but generally speaking things are moving in the right direction and over time we will continue to see that gap close. It just can't happen soon enough."
As people shop more and more, higher prices are becoming more common. McBride says while prices are increasing its too early to tell if the higher inflation will be temporary or permanent.
"Is this temporary or is this embedded," McBride said. "It's not an argument that will be settled before the end of the year maybe early next year but when you look below the headlines there is a lot of evidence that supports this belief that things be temporary."
McBride cited lumber prices that are already dropping as an example of temporary higher inflation. He did. however, warn the higher prices could stick around due to one factor.
"We cannot ignore the chorus of business owners and CEOs that are saying 'look my labor costs are going up at a pace that is going to force me to have to pass along higher prices,'" McBride said. "If we find ourselves in a situation where that higher inflation becomes embedded and is sustained then that is going to be our primary indicator."
McBride also spoke about the active housing market. He told Williams that people looking to buy should not go beyond their means and make sacrifices, such as not doing an inspection, just to buy a home. As for sellers, he said before they agree to sell they should make sure they have a place to live given the difficult buying market happening right now.