Richard Clarida, vice president of the Federal Reserve (Federal Reserve), said economic growth in the United States could reach 7% this year as barriers to employment are resolved and recovery is accelerating.
In her speech at a Federal Reserve conference in Atlanta, Clarida said, “The economy, if any, seems to be accelerating this year … we may have more than 6% growth, maybe 7%.”
He said current barriers to labor and supply would be overcome, and the evidence indicated that “it may take longer for the $ 20 trillion economy to reopen than it did to close.”
The figure, cited by the Vice President of the Federal Reserve, goes hand in hand with the announcement by John Williams, chairman of the Central Bank of New York, that he “expects the highest growth in U.S. gross domestic product (GDP) in decades. ‘
For its part, the Bureau of Economic Analysis (BEA) reported US GDP growth in the first quarter a few weeks ago, growing at an annual rate of 6.4% after a 3.5% contraction in 2020.
This is just the beginning
At the same event, Richard Clarida pointed out that the U.S. employment report was weaker than expected, showing that the economy had not yet reached the threshold to justify the central bank’s massive bond purchase cuts.
“According to the April Employment Report, we have not made significant progress (…) as the year progresses, policymakers will evaluate the data and we will certainly issue a warning before anticipating that purchases decline,” Clarida commented.
In terms of employment, it was recently reported that employers created only 266,000 new jobs last month, with 1 million jobs expected to be created. Similarly, the unemployment rate was 6.1%, up 0.1 percent from March.
The BEA released inflation data last week, recording monthly growth of 0.8% in April, reaching an annualized rate of 4.2%, its highest level since September 2008.
Experts have warned that a radical expansion of monetary policy will trigger inflation, citing a recent record as evidence.