The economy is improving faster than expected, the U.S. budget office says, adding another twist

[BumRushDaShow]

Source: New York Times

The American economy will return to its pre-pandemic size by the middle of this year, even if Congress does not approve any more federal aid for the recovery, but it will be years before everyone thrown off the job by the pandemic is able to return to work, the Congressional Budget Office projected on Monday. The new projections from the office, which is nonpartisan and issues regular budgetary and economic forecasts, are an improvement from the office’s forecasts last summer.

Officials told reporters on Monday that the brightening outlook was a result of large sectors of the economy adapting better and more rapidly to the pandemic than originally expected. They also reflect increased growth from a $900 billion economic aid package that Congress passed in December. The budget office now expects the unemployment rate to fall to 5.3 percent at the end of the year, down from an 8.4 percent projection last July.

The economy is expected to grow 3.7 percent for the year, after recording a much smaller contraction in 2020 than the budget office initially expected. The report is likely to inject even more debate into the discussions over whether to pass President Biden’s $1.9 trillion economic rescue package. It could embolden Republicans who have pushed Mr. Biden to scale back the plan significantly, saying the economy does not need so much additional federal support.

Still, the report shows little risk of “overheating” the economy, which is projected to remain below potential levels until 2025 on its current path. And big economic risks remain. The number of employed Americans will not return to its pre-pandemic levels until 2024, officials predicted, reflecting the prolonged difficulties of shaking off the virus and returning to full levels of economic activity. Officials said the rebound in growth and employment could be significantly accelerated if public health authorities were able to more rapidly deploy coronavirus vaccines across the population.

Read more: https://www.nytimes.com/2021/02/01/business/economy/cbo-economy-estimate.html

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Full headline: The economy is improving faster than expected, the U.S. budget office says, adding another twist to stimulus talks.

[groundloop]

1. I have to think that Senate GOPers will use this to fight Pres. Biden pandemic relief package

[bucolic_frolic]

2. Rosy scenario

"Only" 500,000 dead.

Complete lockdown last March and far, far fewer deaths, and the economy would have recovered in 2 months. So this is no big success, and it's still all on Trump.

Have MAGAmaniacs considered God sent covid for Trump to bungle so voters would kick him out?

[LizBeth]

3. The economy was heading into a recession prior to covid March and Feb had hit recession

though we didn't hear about it at all. That disappeared with all the covid stuff?

[dchill]

4. Something tells me that the "American economy"...

...is not what I think it is.

[stillcool]

6. it's anything you want it to be...

if you're making the rules, and spouting meaningless word salads.

[dalton99a]

5. "It will be years before everyone thrown off the job by the pandemic is able to return to work"

[hamsterjill]

10. This!!!!

Jobs aren’t coming back any time soon.

[twodogsbarking]

7. Faster than expected

but then again they expected total collapse.

[yaesu]

8. whatever feel good pills they are on I want some

They aren't taking in the effect of the wall street bubble bursting & more virus shutdowns. Over exuberance on steroids.

[DallasNE]

9. Too Soon To Know

Still too much uncertainty to be making projections given the new, more contagious virus. I also have to wonder how much Trump changed the matrix to make the economy look better than it actually is - especially the headline number.

Part of GDP is health care and that has been super juiced for several months and will contract rapidly as vaccinations take hold. Plus, the numbers now living below poverty won't be contributing much for a long time. Will they all just be thrown under the bus? Almost every red light now has someone begging for money.