APRIL 12, 2021 – US ECONOMY EXPECTED TO TAKE OFF
Economists believe the US economy is on the verge of prosperity, and it may become stronger than it was before the pandemic hit. Economists expect Q2 growth of 10 percent and a full year’s growth in 2021 to exceed 6.5 percent.
The government distributions, in the form of pandemic relief, are working their way through the economy as restrictions are lessening across the country. Spending is up 20 percent over the same period two years ago. March’s better than expected increase of 916,000 new jobs is further evidence of an acceleration. The unemployment rate is still over 6 percent, but some economist think it could drop to 3 percent, lower than the pre-pandemic 3.5 percent.
With 20 percent of the population fully vaccinated, more businesses are opening up and people are anxious to return to travel, restaurants, gyms and entertainment venues. The Bank of America estimates Americans have $3.5 trillion in savings that are ready to be spent.
If inflation heats up, the Fed could tighten their policy, but Fed Chair Powell has expressly stated the central bank will keep rates low for the foreseeable future.