MARCH 1, 2021 – SOME GOOD ECONOMIC NEWS REPORTED
It was announced that US household income rose by 10 percent in January This was the second largest rise on record, beaten only by the gain seen last April after the first virus-related relief package was passed. The rise is almost entirely due to pandemic relief stimulus program, and another package is expected to follow later this year. With all the extra cash in hand, Americans spent, lifting consumer spending by 2.4 percent, the first gain in 3 months. But the full impact of the government distribution was not felt, as $3.9 trillion went into savings, up from $1.4 trillion a year ago.
Jobless claims fell by 111,000 to a seasonally adjusted 730,000 last week. Weekly claims have fallen significantly since a January high of 900,000.
Economists expect GDP to rise 4.9% this year. But the economy is not seen to be on a clear path. A virus resurgence could cause businesses to close again and may scare consumers from spending. Economists also expect faster job growth this year, thinking employers will add 4.8 million jobs in 2021.
On Wednesday, Fed Chair Jerome Powell signaled the Fed isn’t ready to alter its monetary policy. Speaking to the Senate Banking Committee, he confirmed his intent to keep easy monetary policies unchanged for the foreseeable future and was generally dismissive of inflation.