The economic projections coming out of the Federal Open Market Committee’s April meeting were slightly stronger than the group’s March forecast. In minutes from the committee’s April 27-28 meeting, members said that real GDP growth was projected to post a “substantial increase” this year, along with a “rapid decline” in the unemployment rate. Reductions in social distancing and favorable financial conditions are expected to fuel growth. Members cautioned, however, that the path of the economy depends on the course of the virus. Despite improvements in vaccinations, the health crisis “continued to weigh on the economy and risks to the economic outlook remained.”
Information from April’s meeting suggested that real gross domestic product had increased in the first quarter of 2021 at a pace that was faster than in the fourth quarter of last year but had not returned to pre-pandemic levels. Labor market conditions also improved. As of March, payroll employment had retraced almost two-thirds of the losses seen at the onset of the pandemic. The unemployment rate declined to 6% in March, as the number of workers on temporary layoff continued to fall and the number permanently laid also dropped. Although unemployment rates for African Americans and Hispanics declined, both rates remained well above the national average, the minutes showed.