The U.S. economy grew at 6.4% in the first quarter of 2021 as the combined impact of a mass vaccination rollout and federal stimulus checks triggered a surge in consumer spending.
But mature economies like that of the U.S. cannot sustain such a high rate of growth forever. So, just how long can this economic boom last?
Three forces are currently driving the nation’s economic growth, according to Edward Stuart, emeritus professor of economics at Northeastern Illinois University. The first is monetary policy from the U.S. Federal Reserve that is keeping benchmark interest rates at historic lows, making it cheap to borrow money. The second is the impact of President Joe Biden’s stimulus measures that not only helped individuals but also sent money to state and local governments. And the third economic driver – which Stuart says is clearly the most significant – is the COVID-19 vaccine rollout.
So long as vaccines are able to control the spread of COVID-19 variants, Stuart sees little that could derail economic growth this year. But he said the fate of Biden’s infrastructure plan will help determine long-term gross domestic product growth.
