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.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.

TLS 1.2 Encrypted
Equal Housing Lender