St. Louis Federal Reserve’s James Bullard has stated that the US is to move from “recovery” to “expansion” by end of June and surpass pre-pandemic level of output.
“The ‘keep households whole’ fiscal strategy has been successful well beyond initial hopes,” Bullard told the Greater Memphis Chamber, with national income “as high as it ever was and…poised to grow at an above-trend rate.”
”The real gross domestic product hit a high of $19.2 trillion at the end of 2019. For the first three months of 2021 it was $19 trillion on an annualized basis, putting the United States close to completing its recovery from the pandemic downturn, Bullard said, and “moving into the expansion phase of the business cycle.”
Bullard said he felt those figures were misleading, and that the labour market was “tighter” than it appears, citing the fact that as of March the ratio of unemployed people to job openings was 1.2 – low by historical standards.
Market implications
Meanwhile, the US dollar is bid on the back of this week’s inflation data in both the Consumer Price Index and the Producer Price index.
Benchmark US stock indexes have also been under pressure this week but today have battled back.
Upbeat labour market data prompted investors to buy shares that stand to gain most from economic revival.
The Dow Jones Industrial Average climbed by 1.6% to 34,125.31, the S&P 500 was up by 1.5% to 4,123.44 and the Nasdaq Composite was 0.9% higher to 13,152.19.