Global investment firm Franklin Templeton Investments senior portfolio manager Mike LaBella has said the coronavirus pandemic has left the United States consumers’ in a better shape than any other post-crisis era.
Speaking to TD Ameritrade Network, LaBella noted that the U.S. economy is prospering, with consumers acting as the main driver.
He stated that factors like increased income over the past year highlight the consumer’s position despite the economic hardships from the health crisis. LaBella maintains that such a recovery environment was not witnessed after the dot com bubble alongside the 2008 financial crisis.
According to the manager, the current U.S. consumer position is due to the government’s reaction to the pandemic.
“Despite the amount of hardship that it was that we all faced incomes actually rose last year because of the enormous amounts of policy accommodation, both fiscal and monetary, that leaves the U.S. consumer in better shape than in any post-crisis period we’ve had in recent recent memory,” said LaBella.
The Fed to show caution
He added that the Federal Reserve might show caution in regards to injecting more capital into the economy. LaBella notes that the Fed will also be cautious in enacting any policy relating to interest rates as it impacts the consumer directly.
LaBella points out that despite consumers remaining central to the recovery, the economy is slowing down mainly because people have not spent money as they wish. Additionally, he attributed the slow down to an increase in prices due to supply disruptions.
However, he cited that the bipartisan infrastructure bill is pivotal in driving the U.S. economy to the next level.
On the possibility of the economy declining due to the Covid-19 delta variant, LaBella suggested the threats are over because of the underlying metrics. He noted that the effects would be transitionary in the coming months.