Optimistic Business Expectations Aid US Economic Recovery

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Optimistic business expectations along with rapid vaccination aids US economic recovery in Q1 2021, says GlobalData

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Q1 2021 hedge fund letters, conferences and more

Following today’s release of US GDP Q1 2021 growth rate of 6.4% at an annual rate (advance estimate) in the backdrop of recovery of economic activities;

Expectations For Faster Economic Recovery In H2

Gargi Rao, Economic Research Analyst at GlobalData, a leading data and analytics company, offers her view:

“With a total COVID-19 support package of around 37.25% of US GDP, including Biden’s $1.9 trillion America rescue plan, GlobalData expects faster economic recovery for the US in H2 2021. The consistent progress noted in key macroeconomic factors such as business and consumer confidence and the purchasing manager’s index has caused GlobalData to revise its 2021 economic growth forecast for the US from 3.96% in January to 6% in April 2021.

“The US’s Q1 GDP growth was aided by rapid vaccinations across states, an increase in social consumption, a rise in non-residential fixed investment and a surge in global demand for goods and services. A total 6% growth could be achieved if the country continues its focus on job-oriented policies, consumer spending increases, there is continued pick up in home sales and business expectations increase.

Optimistic business expectations

An Increase In Household Savings

“So far, unemployment benefits, stimulus support and pensions have resulted in an increase in household savings. Plus, the continued resumption of economic activities resulted in better labour market outcomes in March 2021. Further, the business confidence index shows an upward trend from January 2021 onwards, and a balanced economic recovery is expected in H2 2021 due to growth in the services sector, a spur in household consumption growth and increase in imports.

“Amid rapid vaccination and fiscal support from state and local governments, core macroeconomic indicators have strengthened. However, the path to steady recovery depends upon the development of virus variants and progress on vaccinations. Although unemployment rate declined it is still on the higher side, which indicates jobs are restoring but at a slower pace. Moreover, a recent spike in inflation rate may still be transitory but poises immediate downside risk to economic recovery. Despite growth, uncertainty prevails.”

About GlobalData

4,000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, financial, technology and professional services sectors.

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