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March Monthly Dashboard: Signs of post-pandemic economic acceleration

March 26, 2021
  • Nationwide March future scorecard

Monthly Review (Page 3)

Economic data mostly showed further signs of acceleration as the U.S. makes progress toward a post-pandemic environment. Reduced government restrictions helped to spur a jump in hiring by restaurants and other in-person dependent industries during February, while jobless claims declined a bit more in March. Despite a weather-induced drop in retail sales and housing activity for February, lower COVID counts have led to improved consumer mobility while income gains are picking up (boosted further by stimulus payments) — both positives for future spending. The manufacturing sector is also expanding solidly as demand picks up, although supply chain shortages for some materials could be a near-term constraint and could also push prices up temporarily this year. Long-term interest rates climbed further to year-highs in response to expectations for strong economic growth, record federal budget deficits, and continued concerns about inflationary pressures. Many of the major stock market averages climbed to record highs in mid-March before falling back a bit.

Outlook (Page 4)

Consumer and business activity looks increasingly likely to surge over the remainder of 2021 and into at least early next year as falling COVID cases and faster vaccine distribution lead to further easing of government restrictions. The massive $1.9 trillion American Rescue Plan, which provides a third round of stimulus checks to many households and extends pandemic unemployment benefits into September, will add more fuel to a spending boom this spring and summer. Growth is expected to be strongest for those sectors hardest hit by the pandemic (i.e., restaurants, travel, etc.) as consumers flock to in-person activities restricted over the past year. This should drive a jump in hiring by service sector businesses, a significant shot in the arm for the millions of workers that continue to be displaced by pandemic effects, while pushing up monthly job gains through the end of the year. Higher interest rates are not expected to dent demand for autos and homes as faster job and income gains help to offset any affordability concerns. Sales of big-ticket items are projected to climb higher this year and remain elevated in 2022, as well.

Go deeper with the full March dashboard linked below.