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 7, 2021 11:11 AM
Updated: Apr 7, 2021 11:11 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.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 314710

Reported Deaths: 7254
CountyCasesDeaths
DeSoto21646260
Hinds20369416
Harrison17949309
Rankin13643278
Jackson13450246
Madison10113217
Lee9986174
Jones8384163
Forrest7689152
Lauderdale7198240
Lowndes6403148
Lamar623686
Lafayette6203119
Washington5341134
Bolivar4802132
Oktibbeha462998
Panola4596107
Pearl River4519146
Marshall4450103
Warren4393121
Pontotoc420872
Monroe4115133
Union411176
Neshoba4031176
Lincoln3969110
Hancock379586
Leflore3498125
Sunflower336290
Tate334784
Pike3327105
Scott316274
Alcorn313368
Yazoo311770
Itawamba300577
Copiah297465
Coahoma295579
Simpson295388
Tippah288768
Adams286982
Prentiss280060
Marion269380
Leake268473
Wayne262841
Grenada261587
Covington259881
George248148
Newton246862
Winston227581
Tishomingo227067
Jasper221148
Attala214473
Chickasaw208057
Holmes189174
Clay185554
Stone182833
Tallahatchie178941
Clarke178080
Calhoun170932
Yalobusha164638
Smith162534
Walthall134245
Greene130633
Lawrence128724
Montgomery127142
Noxubee126734
Perry126338
Amite123142
Carroll121829
Webster114532
Jefferson Davis107133
Tunica105726
Claiborne102430
Benton100025
Humphreys96733
Kemper95828
Franklin83923
Quitman81116
Choctaw76418
Wilkinson67531
Jefferson65728
Sharkey50217
Issaquena1686
Unassigned00

Alabama Coronavirus Cases

Cases: 540083

Reported Deaths: 11038
CountyCasesDeaths
Jefferson798481529
Mobile41283809
Madison35157506
Tuscaloosa25925455
Shelby25302249
Montgomery24723593
Baldwin21411310
Lee15993172
Calhoun14574319
Morgan14425280
Etowah13925353
Marshall12280225
Houston10648282
Elmore10158206
Limestone10070151
St. Clair9948245
Cullman9768194
Lauderdale9460243
DeKalb8865188
Talladega8341176
Walker7261278
Autauga7005108
Jackson6840112
Blount6773139
Colbert6322135
Coffee5581118
Dale4877113
Russell445738
Chilton4373113
Franklin426382
Covington4138118
Tallapoosa4044153
Escambia394877
Chambers3596123
Dallas3569153
Clarke351561
Marion3140101
Pike312077
Lawrence303098
Winston275873
Bibb264764
Geneva254178
Marengo249865
Pickens234862
Barbour232056
Hale224078
Butler219169
Fayette212862
Henry189943
Cherokee184845
Randolph182542
Monroe178141
Washington167839
Macon161350
Clay157257
Crenshaw153557
Cleburne149641
Lamar143336
Lowndes140653
Wilcox127430
Bullock123242
Conecuh110829
Coosa109228
Perry107826
Sumter105032
Greene92634
Choctaw61024
Out of AL00
Unassigned00
Tupelo
Cloudy
70° wxIcon
Hi: 79° Lo: 63°
Feels Like: 70°
Columbus
Cloudy
69° wxIcon
Hi: 81° Lo: 62°
Feels Like: 69°
Oxford
Cloudy
66° wxIcon
Hi: 77° Lo: 63°
Feels Like: 66°
Starkville
Cloudy
64° wxIcon
Hi: 78° Lo: 61°
Feels Like: 64°
Low pressure off to the west of our area and high pressure to the east over the next few days. In between, in our area the battle will linger some scattered showers and isolated thunderstorms for a few more days.
WTVA Radar
WTVA Temperatures
WTVA Severe Weather