Local industry analysts expect the United States economy to remain healthy, even as new concerns emerge about the coronavirus pandemic.

The US economy has been under close watch, with that country being Jamaica’s main trading partner. This means any significant impact to be felt by the US would likely be passed on to the island.

US lockdowns and restrictions have already contributed to fallouts in several of Jamaica’s industries over the past year.

Recently the US’ top infectious disease expert, Dr. Anthony Fauci, warned that things would get worse as the Delta variant surged. He, however, noted that there would be no further lockdowns as a significant percentage of the population has been vaccinated to help stave off further waves.

The US vaccination numbers have been factored into recent projections by the International Monetary Fund (IMF). In its most recent report published in July, the IMF revised its projections for advanced economies, including the US, upwards to reflect greater support in these larger economies for development. 

Research and Strategy Analyst at Sagicor Investments, Jodian Aris,

“For the US, they are looking at legislation surrounding fiscal support which will come in the second half of 2021 as well as health metrics. Even with the risk of variant strains, it’s a reduced risk in the context of the larger global economies with their level of vaccination,” said Research and Strategy Analyst at Sagicor Investments, Jodian Aris.

She was speaking on Taking Stock with Kalilah Reynolds recently.

Overall the IMF has left its projections for global growth unchanged at 6% for 2021 and almost 5% for 2022.

In the meantime, Assistant Manager of Private Equity at PROVEN Management, Julian Morrison agreed that despite some downside risks for the near term, the US economy will be resilient to future shocks.

He said investors are now more accustomed to the COVID-19 effect and have learnt to live with it, which will result in a more stable market when compared to how it reacted to the onset of the crisis last year. 

Assistant Manager, Private Equity at PROVEN Management, Julian Morrison

“They’re not going to be as shocked as they were the first time so that should actually help to keep markets at a certain level and catalyze further growth down the line,” he said, adding that the additional fiscal stimulus being provided to citizens should also help to keep things stable.

The US economy was reported to have grown some 6.5% last quarter, fueled by vaccinations and government aid.

In addition, Morrison pointed out that liquidity remains strong in the US market with that capital stimulating the supply of credit which people are using to invest back into the economy.

“Credit became cheaper and a lot of people have used that additional money supply to go into the market so that has really pushed financial markets to become far more buoyant in terms of growth; that has made many more investors more aggressive,” he reasoned.

Morrison said several new retail investors have also jumped into the market because they have more time on their hands and have taken interest in the growth of the market.

“So it’s a domino effect, you have a lot of new funds coming into the market and that momentum is what is pushing prices,” he said.

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