With the democrats On the verge of passing a nearly $ 2 trillion stimulus bill and Covid-19 vaccines moving forward, America’s economic outlook is much more optimistic than it appeared in early January.
The latest monthly Bloomberg A survey of economists shows that the annualized growth rate in the first quarter will be 4.8%, twice as fast as what respondents expected just two months ago. For the full year, gross domestic product is projected to rise 5.5%, which would be the fastest since 1984 and is above the January estimate of 4.1%.
After the key January runoff elections in Georgia, where Democrats secured two Senate seats to win scant control of the chamber from Republicans, economists generally in pencil on a pandemic aid package worth about $ 1 trillion. Democrats stood together to push through a bill nearly twice that size; no Republican senators voted in favor of the plan on Saturday. The measure then returns to the House for a final vote, expected to be Tuesday.
President Joe Biden, speaking Saturday after the Senate vote, sought a major boost for the economy.
“This will create millions of new jobs,” Biden told reporters at the White House. “It is estimated that there are more than 6 million new jobs alone; increase gross domestic product by a trillion dollars. ”
“As difficult as this time is, there are brighter days ahead, there really are,” Biden said. “It has never been a good bet to bet against the United States.”
An additional round of stimulus checks of $ 1,400 for millions of Americans, combined with supplemental unemployment benefits and the acceleration of vaccines, should help sustain growth throughout the year, said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC .
The government stimulus “will give an adrenaline rush for a short period of time,” Stanley said. He indicated that “it will fade away, and the most fundamental aspect of things, which is really just opening up and going back to something closer to the norm of pre-pandemic activity, should kick in.”
Read More: Economists Raise US Growth Forecasts On Spending Plan
The Bloomberg survey of 67 economists ran from February 26 to March 3.
While economic growth is poised for a strong 2021, it could also spell another partisan split over the Next item on Biden’s legislative agenda: a multi-million dollar infrastructure-centric plan.
What Bloomberg Economics Says …
Loosening activity restrictions and increasing vaccines will allow consumer spending to regain its status as a key economic engine this year. While another round of stimulus is slated to propel growth to its pre-pandemic trend mid-year, a stealth buildup of $ 1.7 trillion in additional savings means even more dry tinder for spending.
– Yelena Shulyatyeva and Andrew Husby, economists
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Democrats hope The package could garner bipartisan support, but Republicans, and possibly some moderate Democrats, are likely to be concerned about how the proposal would be funded, certain additional provisions, and the size of the overall plan, especially if the economy shows sustained progress in the coming months. .
American vaccines pass 85 million doses
Recent reports have shown a broad economic improvement in US retail sales. increased in January to the most in seven months, and a measure of U.S. manufacturing expanded in the fastest pace in three years in February.
The labor market, which has recovered more slowly, showed a larger-than-expected increase in employment in February, although jobs remain well below pre-pandemic levels.
Meanwhile, the the daily vaccination rate has quadrupled and new coronavirus infections have it collapsed since the beginning of January. Governors in Texas and Mississippi, despite Criticism from health experts: Announced plans to completely lift coronavirus-related restrictions, citing a decrease in hospitalizations and an increase in vaccinations.
Getting the pandemic under control is still key to economic recovery, “and then the checks and the money, this will all speed it up really fast once it’s done,” said Heather Boushey, a member of the White House Council of Economic Advisers he said in an interview.
– With the assistance of Jennifer Jacobs, Kyungjin Yoo, Alan Levin and Kate Queram
(Updates with Biden’s comments from the fifth paragraph.)