United States

Economic outlook

The implementation of several large fiscal stimulus packages, accommodative monetary policy and rising vaccinations are helping the US economy recover from the COVID-19 pandemic. Consumers are returning to former patterns of activity, and confidence is elevated as jobs return. Persistent issues in global supply chains and runaway inflation remain chief concerns. The US Bureau of Economic Analysis predicts growth to moderate to 2% in 2022 after a 6.5% spike in 2021.

The Biden administration has laid out its full set of plans to strengthen the economy under the “Build Back Better” proposal, which passed the House of Representatives in November 2021. The American Jobs Plan focuses on increasing infrastructure investment, while the American Families Plan expands support for education and families. The Act made additional government spending possible and is expected to support economic growth beyond the pandemic, if it passes the Senate. The potential for increases in taxes to finance such spending remains possible, though fiscal policymakers are unlikely to hike taxes significantly so as not to impair growth. An ageing population and lower productivity remain constraints on long-term growth.

GDP per capita is amongst the highest in the world. Job losses in the wake of the pandemic hit incomes in 2020, before they rose in 2021 alongside the economic recovery. The IMF forecasts GDP per capita to approach US$87,000 by 2026. But long-standing inequalities in income and wealth remain.