The U.S. economy grew 1.7% in the 4th quarter, ending a strong year

A Gallup survey conducted this month found that Americans view the economy more negatively than positively – with just 29% saying the economy is improving, while 67% believe it is getting worse.

Yet 72% say now is a good time to find a quality job.

“It all depends on what you prioritize,” said Allison Schrager, an economist and senior fellow at the Manhattan Institute, a conservative think tank. Policymakers in Washington have decided to err on the side of providing too much pandemic aid rather than too little – and Ms Schrager is among analysts who say the trade-offs of that decision are becoming apparent. If there had been less stimulus, she said, “inflation wouldn’t be as bad as it is.”

At a press conference on Wednesday, Jerome H. Powell, the Fed Chairman, acknowledged that “bottlenecks and supply constraints limit how quickly production can meet higher demand at term” and that “these problems have been more significant and longer lasting than anticipated.”

As analysts ponder the direction and degree of price increases this year, many see the spring months as a crucial pivot point, said Ellen Zentner, managing director and chief U.S. economist at Morgan Stanley. . This is partly because the Consumer Price Index reports for March and April this year will provide the first relatively stable year-over-year comparisons experts will have seen in three years. : 2020 data was juxtaposed to 2019 pre-pandemic normal; reports in 2021 after the economy reopened were measured against the anomalous and partially depressed environment of the vaccine-free economy in 2020.

“The hope is that this will change as we enter the second quarter,” Ms Zentner said. And this high single-digit inflation “does not drag on further into the year”.

In quarterly earnings calls, JPMorgan Chase and Bank of America, which together serve 140 million households, reported that family finances are technically better than before the pandemic. Bank of America said its customers spent a record $3.8 trillion in 2021, a 24% jump from 2019 levels. But analysts note that shrinking savings and continued price increases – as well as any new variant of coronavirus – could curb consumption.

Thursday’s report said the cash reserves that many Americans were able to accumulate during the pandemic continued to decline: Real personal disposable income fell 5.8% in the fourth quarter, and the personal savings rate — the percentage of overall disposable income that goes into savings each month – was 7.4%, down from 9.5% in the third quarter.

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