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The US economy is expected to return to its pre-coronavirus trajectory by the end of 2021 but a higher unemployment rate and lagging sectoral growth will have a lasting impact on the recovery, Moody’s Investors Service said in its latest credit outlook.

Key quotes

“The legacy of higher government and corporate debt is likely to last for several years.”

“Pandemic disruptions are creating losses on capital stock (for example, hotels and aircraft) but these are a small share of the economy and the disruptions are also spurring new investment in digital technologies.”

“As COVID-19 vaccinations increase and pandemic-related disruptions fade, several factors augur GDP recovery to the pre-Covid-19 path by year-end. The economic downturn has not stressed financial sector. It does not result from a burst credit or real estate bubble. And pandemic-related supply disruptions will pass.”

“Population growth will continue to slow and productivity growth is likely to remain low. Whether digitisation and advances in robotics and artificial intelligence can.”