This quarterly report focuses on the latest economic developments in the U.S. economy, tracking trends in labour, consumer, energy and housing markets, and examining industries and regions. Monetary and fiscal policy assumptions are also included.
Vaccines and government stimulus spur growth: U.S. Outlook to 2025
Vaccines and government stimulus spur growth: U.S. Outlook to 2025
Global Economic Analysis
$1,260.00
- The U.S. economy will expand by 5.7 per cent this year and 4.8 per cent in 2022.
- The rebound in economic activity is being driven by the faster-than-anticipated rollout of vaccines, a massive fiscal stimulus, and an ultra-accommodative monetary policy.
- The sharp rebound in growth will close the output gap in the second half of this year—far faster than we were anticipating last year at this time.
- Growth will be led by the consumer as households spend some of the close to $2 trillion in increased savings they amassed last year due to restrictions on retail outlet openings and travel.
- The savings rate won’t fall back to pre-pandemic levels over the medium term, as households will keep some funds aside for the inevitable increase in taxes needed to pay down huge deficits.
- Employment won’t return to where it was in the early part of 2020. Many jobs that were lost in the service sector have been lost for good.
- The fiscal deficit rose above $3 trillion in 2020 and will continue at these levels, led in part by President Biden’s $1.9-trillion stimulus package.
- While these deficits are huge, they should be manageable, as we don’t expect short-term interest rates to start to rise again until early 2023.
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