US Economy Sees Growth
GDP Growth of 6.4% in Q1
The US economy came roaring back during the year’s first quarter, with gross domestic product growing 6.4%. GDP, which measures all the goods and services produced in the US, is getting closer to where it was before the onset of the COVID-19 pandemic.
Widespread vaccinations, businesses reopening, and pandemic stimulus checks are boosting GDP. Consumers, which represent 68.2% of the US economy, drove the boom, with spending up 10.7%. Spending on goods increased 23.6% while services spending grew 4.6% as businesses started to reopen.
Consumers Driving Recovery
Consumers spent more on goods during the first three months of the year with sales of appliances and big ticket items surging 41.4%. Consumers also set aside money during the quarter, with the savings rate climbing 21%. The increase in savings hopefully means the economy will stay strong in the months ahead. As more sectors of the economy begin to reopen, Americans will have cash in the bank to spend.
However, issues with global trade have continued to weigh on US GDP growth. Inventories and exports have declined while imports have increased. These trends are limiting the US’ GDP growth.
Unemployment Claims Dip Again
In another sign of economic recovery in the US, the Labor Department said initial unemployment claims last week fell to the lowest level since the onset of the COVID-19 pandemic.
Last week 553,000 people filed first-time claims for unemployment—a 13,000 decline from the week prior. The new unemployment claims are a far cry from the millions which were filed weekly last year, but are still a long way away from levels seen during the months prior to the pandemic when weekly claims were about 200,000.
Rising GDP and falling jobless claims are the latest evidence the US economy is recovering. With pandemic restrictions easing and consumers in a spending mood, economic growth is likely to continue in the coming months.
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