The US economy will grow faster than previously thought and reach pre-COVID-19 levels within six months, according to a majority of economists polled by Reuters who however said unemployment would take well over a year to recover.
Key notes
”Optimism was largely driven by the House of Representatives passing President Joe Biden’s $1.9 trillion relief aid in response to the pandemic, which has killed around 530,000 people in the US and left millions out of work.”
”After shrinking 3.5% last year, the world’s largest economy was forecast to grow 5.7% this year – the highest since polling began for this period over two years ago, according to the March 8-11 survey of over 100 economists.”
”In response to an additional question, 85% of economists, or 51 of 60, said the economy would reach pre-COVID-19 levels within a year, including more than 60% expecting it within six months.”
Market implications
Equities are tipped to continue higher as US yields play catch up to inflation expectations and stimulus cheques are handed out to a new breed of investor where billions could find their way through to Wall Street.
US stocks hit fresh records overnight.
The Dow ended up 0.58%, or by 188.57 points to 32,485.59, while the NASDAQ ended 2.36% higher and the S&P 500 finished up by 1.04%.
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