July 24, 2024


Imagination at work

U.S. Economy Shakes off Virus, Surges 6.4%

The to start with quarter sent powerful economic progress in the U.S., setting the phase for what could be a “boom year” as the restoration from the coronavirus pandemic drives client expending.

The Commerce Division claimed Thursday that gross domestic product grew six.4% for the to start with three months of the yr on an annualized basis. Economists experienced been expecting a six.five% acquire.

The economic climate has now expanded for three straight quarters following the critical contraction of the next quarter of 2020 when the pandemic gripped the state. Armed with federal government aid checks, consumers drove the to start with-quarter surge in output.

The to start with-quarter GDP report “signals the economic climate is off and managing and it will be a boom-like yr,” said Mark Zandi chief economist at Moody’s Analytics. “Obviously, the American client is powering the train and firms are investing strongly.”

Client expending, which accounts for 70% of GDP, rose 2.six% in the to start with three months the quarter, with a five.4% raise in buys of goods accounting for most of the progress. Paying on services rose by one.one% but economists count on it to decide on up as far more people are vaccinated and services that were being off-boundaries appear back to everyday living.

Gregory Daco, chief U.S. economist at Oxford Economics, said his company estimates GDP will improve thirteen% in the next quarter and seven.five% for the yr, the ideal performance due to the fact 1951.

“This may well be the tip of the iceberg,” he told The New York Moments. “I consider we will see considerably stronger momentum into summer season as health ailments keep on to increase, policy assist stays in put and work strengthens.”

The to start with-quarter progress left the economic climate within just one% of the pre-pandemic peak it achieved in late 2019. The raise would have been even larger sized experienced it not been for a drop in inventories, said Michael Gapen, chief U.S. economist at Barclays, noting that supply chain constraints and the semiconductor scarcity have decreased creation.

“We’re at the opening levels of what could be a very powerful six to nine months for the U.S. economic climate as it emerges from the pandemic,” he said. “The ideal is nevertheless but to appear.”

Commerce Division, client expending, coronavirus, economic progress, GDP