US optimism gathers steam

<p>Kia ora,</p><p>Welcome to Thursday's Economy Watch where we follow the economic events and trends that affect New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news there has been <a href="https://www.federalreserve.gov/releases/g19/current/default.htm" target="_blank"><strong>a very large rise in consumer credit growth</strong></a> in the US in February as optimism gathered steam.</p><p>It rose a rather remarkable +7.9% year-on-year, or up +US$27 bln from January, the largest rise ever. There was a good rise in credit card (revolving) balances, but the really big increase was for personal loans, especially car loans.</p><p><a href="https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20210317.pdf" target="_blank"><strong>The US Federal Reserve has released minutes</strong></a> from its last meeting. And the Fed officials say it will be "some time" before conditions would be met for scaling back their US$120 billion a month asset-purchase campaign.</p><p>They said it would likely be some time until substantial further progress toward the Fed's maximum-employment and price-stability goals would be realised.</p><p>They had previously forecast they would keep the benchmark lending rate near zero until at least 2023. That was despite sharply upgrading their forecasts for growth this year amid rising confidence and a fresh round of fiscal stimulus.</p><p>Meanwhile, the much faster pick up in US economic activity after the effects of the Covid pandemic have seen the <a href="https://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf" target="_blank"><strong>US trade deficit jumped</strong></a> 4.8% to a record $71.1 billion in February. The deficit was higher than market forecasts of a $70.5 billion deficit. The goods trade gap was also the highest on record.</p><p>Main driver of the deficit was trade with China, the deficit there increasing $3.1 billion to $30.3 billion in February. Exports decreased $4.5 billio