After Biden stimulus, US economic growth could rival or even surpass China’s

After Biden stimulus, US economic growth could rival or even surpass China’s
Goldman Sachs is calling for 2021 US GDP growth of 6.9%, the fastest since 1984. Morgan Stanley is even more bullish, predicting 7.3% growth. That would surpass the Chinese government’s humble target of 6%. More importantly, these Wall Street estimates for the US’ pace are not far from the 8.4% consensus forecast for China among economists polled by Refinitiv.

All of this means that US GDP growth could rival or perhaps even surpass that of China. This would be a remarkable achievement because the United States is a much more mature economy — and was blown away by China’s explosive growth out of the Great Recession.

“We’re going to be in the ballpark — and I think the US will most likely be the leader,” said Joe Brusuelas, chief economist at RSM.

For average Americans, this optimism signals a stronger jobs market and better prospects for prosperity after a dreadful 2020. Morgan Stanley expects the US unemployment rate will drop below 5% by the end of this year and below 4% by the end of 2022.

China has beat the US every year since 1976

The last time the two countries’ growth rates were even somewhat close was during the dotcom boom. In 1999, the roaring US economy grew at 4.8% and China expanded at 7.7%, according to the World Bank.

The United States hasn’t surpassed China’s GDP growth pace since 1976, World Bank stats show.

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Brusuelas recently upgraded his US GDP growth forecast to 7.2% for 2021 because of the size of the American Rescue Plan and progress in defeating the pandemic. And the RSM economist said the risk is that he’s not being optimistic enough.

“We could all be underestimating the coming expansion,” Brusuelas said. “This could literally be the single largest expansion since the middle of the 20th century.”

That would be a stark contrast to the last recovery.

In 2010, as the rebound from the Great Recession took hold, China’s 10.6% GDP growth quadrupled that of the United States. And in 2019, before Covid erupted, China grew at nearly triple the pace…

Read the full article at rss.cnn.com

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After Biden stimulus, US economic growth could rival or even surpass China's

 

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