Economic Analysis and Policy Outlook of U.S. in September 2021
Conclusions
According to the latest data, the COVID-19 cases in the United States rebounded sharply with the spread of Delta variant, and the overall economic recovery slowed down. Personal consumption expenditure has become the main driving force for its GDP growth in the second quarter. The demand of manufacturing and service industries is strong and continues to expand, but due to the shortage of raw materials, labor market contraction, transportation difficulties and other problems, the delivery speed is slow and the backlog of orders is serious. The price level is still at a high level, and the high inflation continues but has slowed down. In August, the CPI and PCE rose by 5.2% and 4.2% respectively. However, the upward inflation is still temporary, and the indicators will return to the normal level as the supply chain bottlenecks and other factors affecting inflation subside. Affected by the pandemic, the recovery of the job market slowed down, and the number of new non-agricultural employment dropped sharply in August, far below market expectations; In July, the number of job vacancies and vacancy rate reached a record high. It is difficult to solve the problem of recruitment in a short time through the rising wage level. Based on the temporary upward inflation and the unexpected job market situation, it is forecasted that the Federal Reserve will keep the federal funds rate unchanged at the open market meeting in September.
