FX.co ★ Biden signed the stimulus bill

Yesterday, US President Joe Biden finally signed a much-debated bill on new large-scale incentives to the US economy for $1.9 trillion. Biden also announced that all states must provide the coronavirus vaccine to all adult Americans by May 1.

The President assured the public that he is ready to take all measures to speed up the process of vaccination of the American population. At the speech of the head of state, one of the main goals set by the new US administration was the normalization of public life for the national holiday of July 4 – Independence Day. Biden warned that if conditions change and security measures are not followed, there is a high probability that American society will return to stricter restrictions.

The bill signed by the president on new incentives provides for the allocation of $400 billion in aid to the economy. Under the bill, the majority of Americans will receive $1,400 per person in state aid in direct payments, while states and local governments will receive $ 350 billion in aid. For American families, tax benefits will be expanded, and funding for the deployment of the vaccination program will increase many times.

Many experts believe that the US economy with the implementation of this bill will grow faster and reach the pre-crisis level within six months. The doubts concern only the employment of the American population, the recovery of which will most likely take at least a year.

A broad restart of the US economy, according to analysts, can be expected in the second quarter of this year, given the successful implementation of the vaccination plan and the enthusiasm of Biden, who intends to provide an opportunity for all adults to receive the COVID-19 vaccine by the end of May.

The implementation of the largest set of stimulus measures in American history promises to lift the US economy by 4.8% in the current quarter, as well as by 7.2% in the future. Moreover, the indicators expected after the adoption of the bill are much higher than those predicted last month.

Recall, according to the latest employment reports, in February, the US labor market made significant progress since the spread of the pandemic and noticeably revived: significantly more jobs were created than expected, and the unemployment rate fell significantly. With signs of weakness still lingering in the US economy, it will likely take another couple of years for US employment to fully recover to pre-crisis levels.

The core Personal Consumer Spending Price Index (PCE) is expected to average 2.0% this year and beyond. The US Federal Reserve System prefers to bring the level of inflation in the country to the same level.