Covid continues to loom over the US economy, but economic activity is nonetheless inching closer to its pre-pandemic strength, helped in large part by people returning to their offices.
The biggest problem putting a damper on early celebrations: the ongoing supply chain crisis. The Back-to-Normal Index created by CNN Business and Moody’s Analytics, stood at 94% on Friday, down one percentage point from the week before. “Business sentiment was the biggest negative weight on the index this week, likely the result of ongoing supply chain issues as well as continued hiring struggles,” said Dante DeAntonio, senior economist at Moody’s Analytics. Even so, some states, such as Idaho, Rhode Island and South Dakota, have already exceeded their pre-pandemic levels, surpassing the 100% mark.
New York and Illinois trail the rest of the nation, at only 86% and 88% back to normal, respectively. New York was particularly hard hit during the height of the pandemic and its economy is still reeling. Louisiana, still recovering from the impact of Hurricane Ida, is 89% back to normal, the index shows. Yet there’s reason for cautious optimism about the those states and the broader US economy: “We’ve seen things rise quite steadily since mid-September, coinciding with the winding down of [Covid] cases,” said Moody’s Analytics Associate Economist Matt Colyar. The improvements have been broad-based — the index tracks a number of variables, which show state unemployment rates have fallen, box office sales are back up, and the number of people traveling through TSA checkpoints has more than doubled versus last year.