The US economy is growing at its fastest pace since 1984

The International Monetary Fund projects the US economy to grow 6.4% this year, up 1.3 percentage points from the group's forecast in January. It expects the global economy to expand 6% in 2021. CNN's Clare Sebastian reports

Posted: Apr 6, 2021 3:17 PM
Updated: Apr 8, 2021 9:31 AM


President Joe Biden's $1.9 trillion stimulus package will boost the US economy and drive faster global growth this year, the International Monetary Fund said Tuesday, though it warned that many countries continue to suffer from the pandemic and are at risk of being left behind.

The US economy will surpass its pre-pandemic size as growth reaches 6.4% this year, the IMF said, up 1.3 percentage points from the group's forecast in January. The rebound will help the global economy expand 6% in 2021, an upgrade of 0.5 percentage points from the IMF's previous outlook. The estimates are broadly in line with Wall Street's expectations.

'At $1.9 trillion, the Biden administration's new fiscal package is expected to deliver a strong boost to growth in the United States in 2021 and provide sizable positive spillovers to trading partners,' the IMF said in a report. Other governments and central banks around the world have also pumped trillions into the global economy.

The IMF said the 'unprecedented policy response' to the pandemic means the 'recession is likely to leave smaller scars than the 2008 global financial crisis.' The group estimates global output dropped 3.3% in 2020, while the US economy shrunk 3.5%.

There are already signs the US recovery is gaining speed. American employers added 916,000 jobs in March, the biggest gain since August. The US manufacturing sector is also roaring ahead, with the ISM Manufacturing Index recently posting its best reading since 1983.

The IMF expects that the coronavirus vaccine rollout and massive government stimulus will combine this year to produce the fastest annual growth rate in the United States since 1984 under President Ronald Reagan. But many other countries will have to wait until 2022 or 2023 to recover all the output lost during the pandemic. Global output growth will slow to 4.4% next year, according to the IMF.

'Multispeed recoveries are under way in all regions and across income groups, linked to stark differences in the pace of vaccine rollout, the extent of economic policy support, and structural factors such as reliance on tourism,' said Gita Gopinath, director of research at the IMF. 'The divergent recovery paths are likely to create significantly wider gaps in living standards between developing countries and others.'

The upgraded US forecast means the world's biggest economy is on track to grow more quickly than many other developed nations this year. The IMF expects growth of 4.4% in the 19 countries that use the euro as Europe battles another wave of coronavirus that has forced Germany, France and Italy to tighten restrictions. Output is expected to expand 3.3% in Japan.

But some nations in Asia will still outpace the United States. The IMF expects China, which was the only major economy to avoid recession last year, to grow 8.4% in 2021 — much stronger than the country's official forecast of more than 6%. Output in India will expand 12.5% in the fiscal year to March 2022.

The IMF credited continued government stimulus and vaccine rollouts for stronger growth projections. It said that consumer prices could be volatile, but it does not expect high levels of inflation to take root because of weak wage growth and unemployment.

Still, the IMF cautioned that a 'high degree of uncertainty surrounds' its projections, reflecting the wide range of potential coronavirus developments. 'Greater progress with vaccinations can uplift the forecast, while new virus variants that evade vaccines can lead to a sharp downgrade,' the group said in its report.

While advanced economies were hit harder than developing nations by fallout from the 2008 global financial crisis, the IMF expects the opposite to be true in the pandemic. The group also said that young people, women and lower-skilled workers have been more likely to lose their jobs due to coronavirus.

'Once the health crisis is over, policy efforts can focus more on building resilient, inclusive, and greener economies, both to bolster the recovery and to raise potential output,' said Gopinath.

While stimulus has helped protect the economy and financial system, it has also encouraged investors to take excessive risks and driven up asset prices, the IMF warned in a separate report. If interest rates rise sharply in response to inflation, that could lead to tighter financing conditions.

The fallout would hit developing markets and poorer countries hardest.

'There is a risk that financial conditions in emerging market economies may tighten markedly, especially if policymakers in advanced economies take steps toward policy normalization,' said the IMF.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 704632

Reported Deaths: 13211
CountyCasesDeaths
Marion961411718
Lake51322943
Allen39040670
Hamilton34368405
St. Joseph33865539
Elkhart27197431
Vanderburgh22050394
Tippecanoe21725212
Johnson17475374
Porter17240298
Hendricks16754310
Clark12663190
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Monroe11417166
LaPorte10841204
Delaware10325184
Howard9629211
Kosciusko9098113
Hancock7954139
Bartholomew7867155
Warrick7680155
Floyd7543176
Wayne6887198
Grant6773171
Boone6524100
Morgan6379138
Dubois6074117
Marshall5770108
Dearborn568576
Cass5678102
Henry5569100
Noble539383
Jackson492869
Shelby478295
Lawrence4336118
Gibson427789
Harrison427570
Clinton417753
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Ohio55711
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Ohio Coronavirus Cases

Data is updated nightly.

Cases: 1050112

Reported Deaths: 18991
CountyCasesDeaths
Franklin1219281356
Cuyahoga1067232069
Hamilton780741168
Montgomery49976996
Summit45252909
Lucas39984765
Butler37678570
Stark31385895
Lorain24111473
Warren23864293
Mahoning20869583
Lake19963362
Clermont19423229
Delaware18002130
Licking16109207
Fairfield15676197
Trumbull15553460
Medina14839259
Greene14643236
Clark13602293
Wood12733185
Portage12353196
Allen11312229
Richland11025198
Miami10525214
Muskingum8702127
Wayne8556209
Columbiana8535226
Pickaway8429121
Tuscarawas8370240
Marion8365135
Erie7554154
Hancock6694123
Ross6693146
Geauga6532146
Ashtabula6470165
Scioto6286101
Belmont5610158
Union557447
Lawrence5465102
Jefferson5303147
Huron5298114
Darke5268121
Sandusky5171120
Seneca5108120
Washington5073107
Athens500656
Auglaize475184
Mercer471184
Shelby455890
Knox4380108
Madison421559
Putnam420799
Ashland412688
Fulton409167
Defiance400896
Crawford3866101
Brown386055
Logan372876
Preble369898
Clinton360560
Ottawa356578
Highland346359
Williams324974
Champaign319257
Jackson307951
Guernsey306149
Perry289649
Fayette277348
Morrow274639
Hardin264164
Henry263566
Coshocton258857
Holmes253099
Van Wert238862
Gallia233346
Pike232931
Adams227852
Wyandot226953
Hocking208959
Carroll189147
Paulding168638
Meigs141538
Noble132837
Monroe128841
Morgan106623
Harrison105236
Vinton81414
Unassigned02
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