Image: Miami Port. Source: R_Eisenreich / AIX
By Martin Crutsinger
Washington (AP) — The US economy has grown at a solid growth rate of 6.4% in the first three months of this year, setting the stage for what economists believe will be the strongest year for the economy in about 70 years.
According to the Commerce Department, gross domestic product growth, the country’s total production of goods and services, has accelerated from 4.3% in the fourth quarter, unchanged from the previous two forecasts.
Economists believe that economic growth will continue to accelerate this quarter, ending this month, as vaccination is widespread and Americans wanting to go out are welcomed by newly reopened businesses. The surge in consumer activity has been partially fueled by nearly $ 3 trillion in financial support approved by the government since December.
Additional economic data released Thursday also regained its foothold shortly after the pandemic, despite stubborn claims of unemployment exceeding 400,000. Is shown.
Lydia Busor, chief US economist at Oxford Economics, said: “As health continues to improve, consumers sitting in the pile of savings will be driven by the urge to spur the services and experiences they felt robbed during the pandemic.”
Boussour predicts that the current April-June quarter GDP growth will skyrocket to 12% annually, with full-year growth of 7.5%. It will be the best annual performance since 1951.
Even economists with 2021 growth forecasts in the 6% to 7% range believe this year’s growth will be the highest since the 7.2% rise in 1984, when the United States emerged from a long and painful recession.
Economists believe this quarter’s growth is sufficient to boost GDP production above the previous peak reached at the end of 2019, before a pandemic occurs and cuts off the longest economic growth in US history.
Data released Thursday is the government’s third and final survey of GDP in the first quarter, showing that May orders for high-value products from U.S. factories have increased 12 times in the last 13 months. It arrived with another report from the Ministry of Commerce showing. ..
Durable goods orders increased by 2.3% in May and decreased by 0.8% in April, which means they will last for at least three years. Despite supply chain delinquency and labor shortages, that intense activity is taking place.
Aircraft orders rose 27.4% last month after rising 31.5% in April, according to the Commerce Department. Durable consumer goods orders increased 0.3% last month, excluding transport orders, which can bounce significantly each month.
As unemployed complaints continue to decline, factories hoping to return to normal or better are stepping up operations to meet demand.
The number of Americans applying for unemployment benefits declined last week as the job market continued to recover, albeit slower than many economists expected at this point in the recovery.
According to the Ministry of Labor, unemployed claims fell by just 7,000 from the previous week to 411,000. Although far from the rush work expected for some time, weekly billing has steadily declined from about 900,000 in January this year.
Even if job growth doesn’t live up to most expectations, Americans spend a lot of money and it when summer begins.
According to the Commerce Department, consumer spending, which accounts for more than two-thirds of economic activity, has grown at a tremendous annual rate of 11.4% in the first three months of this year. Part of that spending could be covered by a $ 1,400 individual payment round that was included in the $ 1.9 trillion support package passed by Congress in March.
The increase in spending in the first quarter reflects increased spending on merchandise purchases driven by car sales and on services driven by the food service industry and travel accommodation.
Business investment showed strong growth of 11.7%, surpassing the previous forecast of 10.8%. Meanwhile, government spending increased at a rate of 5.7%, slightly below last month’s forecast of 5.8%.
The trade deficit in the first quarter increased by subtracting 1.5 points from growth as the recovery of the US economy attracted increased imports and US exporters suffered from sluggish overseas demand.
Source: Associated Press