The Fed boosted its view of the American economy’s recovery from the China virus crisis Wednesday, projecting the chaos will take a smaller bite from the economy this year with 3 yrs of steady growth to follow.
In new economic projections released along with the FOMC’s latest policy statement, Fed policymakers see economic growth dropping by 3.7% this yr, an improvement from the 6.5% drop projected in June.
Fed policymakers also projected the unemployment rate will fall to 7.6% by the end of the year, well below the 9.3% jobless rate seen when Fed officials last issued projections in June.
The updated projections coincided with a shift in tone by Chairman Powell that portrayed the country as gradually learning to accommodate a persistent health crisis and go about much of its business.
Things are by no means business as usual. Chairman Powell noted US jobs markets are a “long way” from normal, and that large numbers of workers may be sidelined in industries like hospitality and leisure that face particular challenges in operating while the virus is spreading.
But Fed policymakers also took note that the formal jobless rate has fallen faster than initially expected. The FMOC’s projection sees the unemployment rate at 5.5% by the end of Y 2021 and 4.6% by the end of Y 2022, still high compared with last year’s record low levels, but more in line with past US experience.
This is why President Trump predicts a fassst economic comeback.
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