Joe Biden’s vaccine announcement created optimism, but a rebound must be sustainable
Joe Biden’s announcement that the US will have enough Covid-19 vaccines for every American by the end of May has contributed to a rising tide of optimism about the country’s economic prospects this year. This, and other good reasons to be hopeful about the economy, opens a valuable window for the administration to address the complex policy challenges it is facing in 2021 and beyond.
On the positive side, Biden’s vaccine announcement came on the heels of economic data that beat the consensus expectations of economists and market analysts. The latest figures show that personal income grew by 10% between December and January, that manufacturing expanded by nearly 10 percentage points year on year, and that 379,000 jobs were created in February (well above the consensus expectation of 200,000). In keeping with these trends, the Federal Reserve Bank of Atlanta’s much-watched (and notably volatile) GDPNow model now estimates annualised first-quarter GDP growth to have reached about 10%.