Fed’s Bullard: U.S. on verge of moving from recovery to expansion

FILE PHOTO: St. Louis Federal Reserve Bank President James Bullard speaks at a public lecture in Singapore

WASHINGTON (Reuters) – U.S. economic output will hit a new high by the end of June, a return to the pre-pandemic peak far ahead of the dire predictions of last year, St. Louis Federal Reserve president James Bullard said on Thursday.

“The ‘keep households whole’ fiscal strategy has been successful well beyond initial hopes,” Bullard told the Greater Memphis Chamber, with national income “as high as it ever was and…poised to grow at an above-trend rate.”

Real gross domestic product hit a high of $19.2 trillion at the end of 2019. For the first three months of 2021 it was $19 trillion on an annualized basis, putting the United States close to completing its recovery from the pandemic downturn, Bullard said, and “moving into the expansion phase of the business cycle.”

Jobs by contrast have lagged, with 8.2 million fewer people working than before the pandemic, and an index of hours worked at about 96% of where it was before the health crisis.

Bullard said he felt those figures were misleading, and that the labor market was “tighter” than it appears, citing the fact that as of March the ratio of unemployed people to job openings was 1.2 – low by historical standards.

(Reporting by Howard Schneider; Editing by Andrea Ricci)

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