WASHINGTON (Axios): Economists are becoming positively giddy about the potential for economic growth this year as President Biden and Congressional Democrats look set to push forward a $3 trillion infrastructure bill.
What we’re hearing: “Stimulus helps build the bridge for the recovery to reach the other side, but an investment in infrastructure is the fuel to jump start the economic engine,” Beth Ann Bovino, U.S. chief economist at S&P Global, says in an email.
S&P predicts Biden’s infrastructure plan will create 2.3 million jobs by 2024, inject $5.7 trillion into the economy — which would be 10 times what was lost during the recession — and raise per-capita income by $2,400.
State of play: Economists at Goldman Sachs again revised up their outlook for growth this year in a Sunday note to clients, predicting real consumption will grow by 9.5% in Q1 and 12.5% in Q2, citing retailer reopenings, the reversal of winter storm effects and a decline in new COVID-19 infections.
Further, they note that OpenTable restaurant reservations are nearing 70% of normal nationwide and are back above their pre-crisis level in Texas.
They also anticipate the pace of fiscal support to U.S. consumers will accelerate by $1 trillion on an annualized basis (or 5% of GDP) for March and the second quarter, relative to the previous six months.
The big picture: “We have to have a big public works program,” Lawrence Baxter, director of the Global Financial Markets Center at Duke, tells Axios.
Baxter compares Biden’s proposed new programs to New Deal initiatives like the Blue Ridge Parkway that were created to battle unemployment following the Great Depression.
“They’re not daring to call it that because that would be a lightning rod,” he adds.
Beneath the surface: A historically high number of Americans are struggling despite what appears to be a recovering economy.
According to the Census Bureau’s latest Household Pulse Survey more than 9 million renters are behind on their rent payments and at risk of being evicted, while around 11% of renters say they have no confidence they’ll be able to pay next month’s rent. (That number jumps to 25% for Americans with a high school diploma or less.)
A recent CoreLogic report finds homebuyers are consistently relocating because of cost, moving from cities like Los Angeles, New York and Miami to cities like Riverside, Calif., Myrtle Beach and Tampa.
The Census Bureau also found that 19.2% of U.S. adults are expecting a loss of employment income in the next four weeks, while 10.7% said they don’t have enough to eat.