The economy grew in the last quarter at a strong annual rate of 6. 4%, the government said Thursday, and the current quarter is expected to be even better. The amount of other people’s unemployment assistance, a reflected rough picture of layoffs, reached its lowest point since the outbreak of the pandemic last week. And the National Association of Realtors said Thursday that more Americans had signed home acquisition contracts in March, reflecting a strong genuine housing market as summer approaches.
Economists say widespread vaccination and minimizing viral cases, reopening more businesses, a massive injection of federal spending, and healthy help for increased tasks maintain stable expansion. the fastest annual expansion since 1984.
In March, U. S. employers signed 916,000 jobs, the biggest increase in recruitment since August. At the same time, retail spending has increased, production is increasing, and customer confidence has reached its point since the start of the pandemic.
“We are seeing all the engines of the economy accelerate,” said Gregory Daco, Oxford Economics’ leading economist. “We have an aptitude environment, fiscal stimulus remains plentiful and we are starting to see an uptick in employment. “
The speed of the economy’s uptick is striking given the extent of the damage inflicted on it by the pandemic since March last year. With business virtually closed, the economy contracted at a record annual rate of 31% in the April-June quarter of last year. rebounding sharply in the following months.
America’s renewed strength, the largest economy, is helping to pull the evolved world out of recession; in Europe, for example, recovery has been delayed due to minimal government aid and slowing vaccine deployment. Economists at Berenberg Bank estimate that the 19 countries using the euro contracted in the first quarter.
Despite all the advances in the U. S. economy, there is still a long way to go, more than 8 million jobs remain lost as a result of the pandemic and the recovery remains very uneven: the maximum number of college graduates and administrative staff paintings of the house during the previous year. Many have even accumulated their savings and increased their wealth thanks to emerging spatial values and a record inventory market, which has risen more than 80% compared to March last year.
On the other hand, cuts have drastically affected low-wage workers, racial minorities, and others without college education. In addition, many women, especially running mothers, have had to leave the labour market to care for their children.
In its report on Thursday, the government said the country’s gross domestic product, its overall production of goods and accelerated in the January-March quarter from an annual gain of 4. 3% in the last quarter of 2020; growth in the last quarter; the government will double the figure in the coming weeks.
Some economists estimate that expansion in the current era from April to June can succeed at an annual rate of 10% or more, due to a sharp increase in the number of other people traveling, buying, eating out and in a different way. resume their spending habits.
One of the main reasons for the improvement in expectations is the record point of federal spending that the economy is about to reach: a $1. 9 trillion package that President Joe Biden received through Congress in March provided, among other bailouts, $1,400 in adult stimulus bills at most. At most, Biden proposes two massive additional spending plans: a $2. 3 trillion infrastructure package and a $1. 8 trillion investment in children, families, and education that the president promoted Wednesday night in his first confrontation with a joint Congressional consultation.
The Fed’s incredibly low interest rate policy, designed to inspire loans and expenses, has also provided significant support. Indeed, the economy is expected to grow, so some economists have expressed fear that this could cause inflation. to the fact that increased demand has led to bottlenecks in the source and scarcity of safe components, adding semiconductors, which are essential for the automotive, generation and medical device industries, among others.
However, at a press conference Wednesday, President Jerome Powell reiterated his confidence that any increase in inflation would be temporary and said the Fed needs to see a truly extensive and sustained recovery before taking flight with his financial support. the central bank is not even about to start a decline in its ultra-low rate policies.
As more and more industry restrictions rise and more and more people venture to shop and eat in restaurants, the corporations that serve them benefit. McDonald’s, for example, recorded a sharp increase in revenue in the last quarter, even exceeding it. In 2019, long before the pandemic flattened the economy. Similarly, top-generation primary corporations have recorded impressive profits. At Apple, ordering for iPhone and other company products doubled profits between January and March.
In New York, Mayor Bill de Blasio said he expects the city to “completely re-open” until July 1. “We’re in a position to open shops, open offices, theaters, all over town,” he said.
Attention is striking about the strength of the U. S. economy’s uptick given the extent of the damage inflicted on it by the pandemic since March last year. With business virtually closed, the economy contracted at a record annual rate of 31% in the April-June quarter last year before rebounding sharply in the following months.
Thursday’s GDP report showed that customer spending, which accounts for more than two-thirds of the economy, jumped to an annual rate of 10. 7% in the January-March quarter, a significant acceleration after spending slowed to an annual gain of 2. 3% in the As customers spend more freely, employers are likely to continue to rent to meet visitor demand. Daco said it expects job expansion in a few months this year to exceed nearly one million that was added in March.
As U. S. consumers have increased their spending in recent months, they have fed on many more physical goods than facilities, such as haircuts, airfares, and meals in places to eat: spending on goods increased at an annual rate of about 24% in the last quarter; facility spending is greater than a rate of less than 5%. This disparity is likely to be replaced as more and more places to eat and entertainment reopen and others congregate more and more.
Consumers were the only ones driving last month’s growth; business investment grew at a steady rate of nearly 10%, reflecting an explosion in capital expenditure; and public spending increased at an annual rate of 6. 3% after two consecutive falls that reflected the state’s weakness. and local securities as the recession reduced tax revenues.
Companies slowed their stock replenishment pace, cutting quarterly expansion by 2. 6 percentage points and a deficit in the developing industry reduced expansion by 0. 8 percentage points. But Mark Zandi, leading economist at Moody’s Analytics, who even this weakness masks the evidence of strength: with the US recovery, the US has not been able to do so. But it’s not the first time Before much of the rest of the world, Americans spend more than consumers abroad.
“The GDP figure is physically powerful and indicates that the economy is moving,” Zandi said. “Consumers are buying aggressively. “
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David McHugh, editor-in-chief of AP Business in Frankfurt, Germany, contributed to the report.
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