On March 11 President Biden signed the American Rescue Plan, which will provide about $1.9 trillion in near-term support for the U.S. economy. In addition to direct aid to households, the package includes aid to businesses, an increase in healthcare spending, and support for state and local governments.
PNC had previously included the likely impact of the American Rescue Plan it its February forecast. In total, the stimulus bills passed in 2020 and 2021 have totaled about $5 trillion, or one-quarter of annual U.S. GDP. Supported by aggressive stimulus from the federal government, PNC expects real U.S. GDP to surpass its pre-pandemic level in the third quarter of 2021.
Nonfarm employment increased by 379,000 in February, according to the Bureau of Labor Statistics, based on a survey of employers. This was the strongest month of job growth since October, and was well above the monthly average of 41,000 from November to January.
The U.S. economy has added almost 13 million jobs since April 2020, but employment is still down by 9.5 million from its peak in February 2020.
Many measures of economic activity weakened in February from January, in part because of winter storms, in part because household income fell over the month after stimulus payments were distributed at the beginning of the year.
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