Economy

Fed says U.S. economic activity accelerated to a moderate pace

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Key Points
  • The U.S. economic recovery accelerated to a moderate pace from late February to early April as more consumers opened their wallets to spend more on travel and other goods.
  • Fed Chair Jerome Powell said this week that the U.S. economy is at an "inflection point" where growth and hiring could pick up speed over the coming months thanks to increased COVID-19 vaccinations and strong fiscal stimulus.
A worker wearing a protective mask and gloves assembles face shields at the Cartamundi-owned Hasbro manufacturing facility in East Longmeadow, Massachusetts on Wednesday, April 29, 2020.
Adam Glanzman | Bloomberg | Getty Images

The U.S. economic recovery accelerated to a moderate pace from late February to early April as more consumers, buoyed by increased COVID-19 vaccinations and strong fiscal support, opened their wallets to spend more on travel and other goods, the Federal Reserve reported on Wednesday.

"Reports on tourism were more upbeat, bolstered by a pickup in demand for leisure activities and travel which contacts attributed to spring break, an easing of pandemic-related restrictions, increased vaccinations, and recent stimulus payments among other factors," the U.S. central bank said in its latest "Beige Book," a collection of anecdotes about the economy from the Fed's 12 regional districts.

Fed Chair Jerome Powell said this week that the U.S. economy is at an "inflection point" where growth and hiring could pick up speed over the coming months thanks to increased COVID-19 vaccinations and strong fiscal stimulus.

The United States added 916,000 jobs in March, the largest gain in seven months, according to Labor Department data. And U.S. consumer prices rose at the fastest clip in more than 8-1/2 years in March as vaccinations and stimulus boosted economic activity, according to Labor Department data released on Tuesday.

However, Powell and other Fed officials say the brighter economic forecasts and brief period of higher inflation will not affect monetary policy, and the central bank will keep its support in place until the crisis is over. The U.S. economy is still short 8.4 million jobs from pre-pandemic levels.

Policymakers agreed last month to leave interest rates near zero and to keep purchasing $120 billion a month in bonds until there was "substantial further progress" toward the Fed's goals for maximum employment and inflation. Fed officials will gather again in two weeks for their next policy-setting meeting.