“This positive turn in the economy is even more remarkable because it happened without the additional stimulus the mins show Fed officials expected in July.” — Paul Ebeling
Last month Fed policy makers agreed that the economy was recovering from the China virus chaos recession much faster than they had anticipated.
The Fed’s staff told Top officials that they the projected “rate of real GDP growth and the pace of declines in the unemployment rate were faster over the second half of this year than in the July forecast, primarily reflecting recent better-than-expected data,” according to mins from the FOMC’s September monetary policy committee meeting that were released Wednesday afternoon.
FOMC policy makers agreed with the staff assessment.
“Participants observed that the incoming data indicated that economic activity was recovering faster than expected,” the mins report.
In particular, with the reopening of many businesses and fewer people withdrawing from social interactions, consumer spending was rebounding sharply and appeared to have recovered about 75% of its earlier decline.
That 75% recovery is well-beyond what many analysts inside and outside the Fed expected. At the July meeting, the Fed staff downgraded the expected growth for the rest of year.“The projected rate of recovery in real GDP, and the pace of declines in the unemployment rate, over the 2nd half of this year were expected to be somewhat less robust than in the previous forecast,” the mins from the July meeting said.
The contrast can be seen in assessments of business investment and the labor market.
At the July meeting, Fed officials thought employment gains, which was quite strong in May and June, had likely slowed.
Now they see that although they had slowed they slowed much less than thought, saying, “Participants observed that labor market conditions continued to improve in recent months and that the economy through August had regained roughly half of the 22-M jobs that were lost in March and April. The gains in employment over July and August were generally seen as larger than anticipated,” the September mins note.
Again, this positive turn in the economy is even more remarkable because it happened without the additional stimulus the minutes show Fed officials expected back in July.
And, cases rose as expected, but this did not have as much of a drag on the economy as officials thought it would.
The policy makers are still wary of the impact that virus chaos could have on the economy if cases keep rising, but they are no longer as worried about another nationwide shutdown.
“While the risk of another broad economic shutdown was seen as having receded, participants remained concerned about the possibility of additional virus outbreaks that could undermine the recovery,” the mins say.
“Unbelievable that the Federal Reserve and the President are aligned on the same course with both seeing a faster recovery than expected. Perhaps, the negative members of Congress will stop their negativity with their doubtful comments, get on the same bandwagon and resume their objective responsibility of working for the American people, not just for their own self-aggrandisement.
The railroad tracks have been laid, the fuel has finally arrived when an around the corner vaccine soon to become a reality, and the train is starting up the hill for the next positive Fed Report.
“Our Congressmen and the negative, sensationalized Media should either get on the train and become productive individuals or get off for we, as Americans, are going to achieve our recovery, with or without your help.
“This is what our forefathers taught us and we are going to carry on that tradition,” says Bruce WD Barren, one of the most respected business resurgence experts in the World.
Have a healthy day, Keep the Faith!