By Jonnelle Marte
(Reuters) – The U.S. economy is still being shaped by the coronavirus and growth could slow in the first quarter, possibly turning negative before it rebounds in the second half of the year, Philadelphia Federal Reserve Bank President Patrick Harker said on Thursday.
“COVID-19 has been utterly determinative of the U.S. economy’s performance,” Harker said in remarks prepared for a virtual event organized by the Philadelphia Business Journal.
Economic activity is affected both by measures taken to limit the spread of the virus, and by changes consumers make to avoid getting sick, Harker said.
With coronavirus cases on the rise since September, Harker said he expects the economy to show “modest growth” in the fourth quarter of 2020, “before a significant slowing” in the first quarter of this year.
Still, vaccinations and the recently passed $900 billion fiscal package should help growth pick up later this year, Harker said. “I am optimistic that in the second half of 2021, the economy ― and frankly, life ― should begin to look much more normal,” he said.
(Reporting by Jonnelle Marte; Editing by Andrea Ricci)
