United States: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the United States

International Monetary Fund

No 2022/220, IMF Staff Country Reports from International Monetary Fund

Abstract: This 2022 Article IV Consultation discusses that the United States (U.S.) has recovered quickly from the pandemic shock. The US economy has staged a strong recovery from the coronavirus disease 2019 (COVID-19) shock. The positive effects of unprecedented policy stimulus, combined with the advantages of a highly flexible economy, have been clear. Just over two years after the COVID-19 shock, the unemployment rate and other measures of labor force underutilization have returned to end-2019 levels and output is close to its pre-pandemic trend. The Federal Open Market Committee’s decision at its June meeting—to raise rates by 75 basis points and provide forward guidance around a path for the federal funds rate that peaks at close to 4 percent—strikes the right balance. This policy path should serve to create the up-front tightening of financial conditions that will be necessary to quickly bring inflation back to target. More determined action is needed to achieve the administration’s climate goals and to facilitate a smooth, speedy transition to a low carbon economy.

Keywords: headline PCE inflation; data revision; IMF staff estimate; core PCE inflation; consumption expenditure; liability positions vis-à-vis nonresident; Inflation; Wages; Financial statements; Labor force participation; Labor markets; Global (search for similar items in EconPapers)
Pages: 77
Date: 2022-07-12
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