GDP GROWTH: TRENDING IN Q1 2021

Flush with hundreds of billions of federal stimulus dollars, consumers delivered a positive jolt to the U.S. economy in the first quarter as the Commerce Department reported that GDP came in at a 6.4% seasonal adjusted annual rate. “This signals the economy is off and running and it will be a boom-like year,” said Mark Zandi, chief economist at Moody’s Analytics. “Obviously, the American consumer is powering the train and businesses are investing strongly.”

Although some economists expected the quarterly estimate to show fractionally more growth, it was the second-largest increase since 2003 and brings the U.S. economy to within 1% of its peak reached in late 2019.

The first-quarter gain also reflects increases in nonresidential and residential fixed investments and local, state and federal government aid to business and spending on vaccine distribution. The rate
of fully vaccinated persons in the U.S. is nearing 40%. As a result of widespread vaccinations and economic stimulus, the U.S. is ahead in the global recovery in contrast to the 2008-09 recession when China and Brazil led the way. Consumers, who account for 68.2% of the economy, boosted their spending by 10.7% in Q1, compared with a 2.3% increase in Q4.

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